A friend of mine is getting a divorce and having trouble paying the bills. She mentioned that she should be getting about $6,000 from her tax refund this coming year, and is anxiously waiting for January to roll around so she can file. She said before the divorce she had normally used the money to buy antique furniture or go on trips with her husband. I asked her why she had any refund coming to her at all. She looked at me like she didn't get my question. I suggested she set up her W-4 withholdings so she didn't get any refund at all and perhaps even had to pay $100 or so in April so she could have use of her own money the whole year, instead of giving it to Uncle Sam to use, interest-free. She had honestly never thought of this. Wouldn't it be better for her to pay the right amount of taxes as she went throughout the year, rather than having too much taken out and not having it to earn interest or pay down debt (she's having to move out of her house because she's been so strapped all year). I have to ask why, since she has about $6,000 sitting where she can't get at it that she could really use RIGHT NOW. You can do a W-4 calculation on the IRS Web site to figure out if you have too much tax being withheld each paycheck.
Getting a Tax Refund is Silly
October 16th, 2007 at 01:52 pm