Tuesday, January 17, 2012

Tax Refunds in the News

Last week I came across this little article on the Channel3000 web site.  The headline reports that the amount of a federal income tax refund was down in 2011.  The word "slips" gives this fact a negative connotation.  Why is this a bad thing?

When I hear that the amount of income tax refunds is down, I interpret that as more people paid the proper amount of taxes through the year and did not send extra money to the IRS.  When you overpay during the year the IRS has your money, interest free.  Sure, interest rates are not what they used to be.  But if you had that money in hand you could apply it towards debt you may have, and there is certainly an interest rate associated there.

Now maybe the amount is down because people are earning less, but this fact is not stated or proven in the article.  Without knowing the reason, I'll just remind you that the frugal approach would be to get to the end of the year and not owe the IRS and not have them owe you.

If you are curious about the status of your refund check you can go to www.irs.gov and look under the "where's my refund".

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