For the first time and probably the last, I’m going to get a bit “political” in this post. With tax season upon us, I’m reminded of something that just drives me crazy every year: People walking around bragging about their big tax refund. Here are just a few of my reasons for thinking this is dumb:

1. It’s YOUR money you goof ball! – Somehow people think that they’ve ‘beat the system’ when they get a big refund…but in essence they are just getting back the overage that the government took from their pay during the previous year. Simply put, you were supposed to pay $1,000 in income taxes but you had $2,500 withheld from your pay during the year so you get a refund of $1,500…it’s YOUR money!
2. You are giving the US government an INTEREST-FREE loan! – According to almost any bank’s lending standards, our government could not qualify for a mortgage. The US government owes way more money than it can repay and is overextended in ways that most of our minds can’t even wrap around. If you walked into any bank with a financial condition similar to our government, they would laugh you out of the office and tell you to never come back. So instead, the government gets its loan from you and pays you ZERO interest. If they banks won’t do it, then why should you?
3. These over-inflated refunds just cover up poor money management. – I can hear it now…”Forced Savings”. “It’s a great way to force myself to “save” money.” I disagree. I have an acquaintance who recently got a 5-figure tax refund (yes that’s $XX,XXX). This particular person has several kids and only one spouse works. They don’t own OR rent as someone else pays for their living arrangements. They have 7 people living in a 3 bedroom home. Their phones are constantly being cut off as well as other utilities and they can’t keep gas in their cars (yes, 3 cars). So, naturally, when I heard they had received such a large refund I was excited for them and hoped that they might put a deposit on a bigger place to live or buy some of the necessities that they lacked. But what did they do with the money, you ask? They bought a tanning bed!!! Oh yeah, and an ample supply of dvd’s and video games.

Some people are really terrified of owing the IRS money at the end of the year and I can understand how scary the IRS can be. I am not recommending you don’t have any income taxes withheld for the whole year and then end up owing a ton of money, but my goal is to break even or have a very small refund. If you need to have someone hold your money for a year so that you can spend it in bigger chunks next year, then choose a better steward than the US government. Maybe even someone that will pay you interest!

I’m simply saying you should talk to your tax person when you file your taxes this year and ask how you can keep more of your money in the future. And please remember, you can talk to your tax person during the year. Even if you use H&R Block or a similar chain, you can call throughout the year to make sure you are on track to break even or get a small refund. If you are having too much money withheld then you can adjust this with your payroll department at work.

Don’t take any of this as tax advice…I’m not a tax professional. Just saying.