A Higher Tax Refund Isn’t Better

Rena-Fi > Free Resources > Articles > Personal Finance > A Higher Tax Refund Isn’t Better

More isn’t always better.

I often find myself reminding clients that tax refunds are your wages, not gifts from the government. You didn’t get free money from the government. You gave it to them.

A return of taxes you already paid could occur for a few reasons.

  • You claimed too few allowances on your w-4 which resulted in too large a percentage of your income being withheld from your paychecks.

  • You didn’t account for deductions like IRA or HSA contributions which can lower your adjusted gross income (AGI) and taxable income.

  • You didn’t account for credits like the child tax credit, which directly reduce the dollars you owe in taxes.

By overpaying your taxes all year, you gave the government an interest-free loan. The larger the refund, the more money you could have put to better use sooner.

Pro-Tip: Track your tax averages as they vary year to year. If you notice a trend (a refund every year), consider adjusting your W-4.

Pro-Tip: If you adjust your W-4 for less allowances, be sure and adjust your budgeted paycheck towards your financial goals.

Brought to you by Rena-Fi, Inc. in conjunction with Camille Williams, a Certified Tax Preparer. Camille has been preparing taxes since 2011 and has worked for several large tax firms including Jackson Hewitt and Liberty Tax Service. Ms. Williams was compelled to start doing taxes as a way to offer a tax service that operated with integrity due to the sensitive information that tax preparers handle.

Leave a Reply

Your email address will not be published. Required fields are marked *

Categories

Upcoming Events

april, 2019

01apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

03apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

05apr1:00 pm2:00 pmOpen Hours1:00 pm - 2:00 pm Event Organized By: Richard Webster

07apr5:00 pm6:00 pmMastermind Series: America is Failing at Financial Literacy5:00 pm - 6:00 pm EST Webinar

08apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

10apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

12apr1:00 pm2:00 pmOpen Hours1:00 pm - 2:00 pm Event Organized By: Richard Webster

14apr5:00 pm6:00 pmMastermind Series: Education vs. Life Resume5:00 pm - 6:00 pm EST Webinar

15apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

17apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

18apr6:00 pm7:00 pmRena-Fi Round Table - Real Estate Readiness6:00 pm - 7:00 pm EST Rena-Fi Round Table

19apr1:00 pm2:00 pmOpen Hours1:00 pm - 2:00 pm Event Organized By: Richard Webster

21apralldayEaster Holiday(All Day: sunday)

22apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

24apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

26apr1:00 pm2:00 pmOpen Hours1:00 pm - 2:00 pm Event Organized By: Richard Webster

29apr10:00 am11:00 amOpen Hours10:00 am - 11:00 am Open Hours Event Organized By: Achsha Jones

X