Day 2 - Educate Us - Tax Refunds

Day 2, Thursday: Educate us on something you know a lot about or are good at. Take any approach you'd like (serious and educational or funny and sarcastic)

Since I'm a tax nerd (see the girl in the glasses?), let's talk briefly about tax refunds.  But first, a disclaimer.  I am not giving you tax advice.  I do not claim to be any smarter than anyone else.  I will not do your tax returns for you.  Turbo Tax is good enough for me and it's good enough for you.   Now, read this carefully: 

Getting a big tax refund is not a good thing

I realize I've just blown a few minds, but it's true.  If you get a big tax refund every year from your tax return, you need to change something (most likely, contact your employer and adjust your withholding in your paycheck).  Most people don't like giving their hard earned cash to the government in any circumstance, but how about loaning a chunk of it to them interest free?  Wouldn't you rather have that money throughout the year to do with as you please rather than waiting till April 15th-ish for it?  

Now, having said all of that, I realize that people handle money differently.  If having your withholding a little high is your "saving" mechanism since you wouldn't otherwise save money, I think that's acceptable.  Many people fund vacations and home improvement projects this way.  However, don't do this if you don't need to.  It might take a little work to figure out, but it's worth it to be in control of your own money.  

The IRS, of all places, has a withholding calculator on their website that you can use.  Check it out!