So by now, if you’re in the U.S., you should have either finished your taxes or requested an extension. If you haven’t, stop reading this post and go get an extension!
Okay. So, those of you left, how were your taxes this year? Did you owe a lot of money? Did you get a lot of money back? Did you ultimately break even? There are differences of opinion as to what the best result is. Some people like to owe money – that way, their money has been with them the whole time, earning interest for them, not for the government. Some people like to get a huge refund – it’s like a savings account that you don’t have to think about (of course then the government is earning all that interest). And some prefer to get that final number as close to zero as possible – no need to pay anything but the government wasn’t getting any interest on their money either.
Personally, I like to get a small refund. It’s less about getting the money back and more about knowing that I have the padding so I don’t have a big payment come tax-time. It’s always a bit of a balancing act, and things will definitely change for me when I do my 2011 taxes, as I bought a house and will have a mortgage interest deduction. I’ve adjusted my withholdings slightly, but who knows.
What I do know is that I like to finish my taxes as early as humanly possible. I saw those lines outside the post office. I do not ever want to be in them, thank you very much.
What is your tax withholding policy? Love that huge refund? Consider it a game to try to get as close to zero as possible? Hold on to your money until the last second? And do you like your method?