We often feel gratified after receiving a tax refund check. It can feel like a Christmas or birthday present. While it may feel like an exciting new gift, it certainly isn’t in reality. You paid the government that money when you did not owe it to them. It can be described as granting a loan to an organization that has far more resources than you do. The government actually profits more through the refund process than getting their money at the end. Tax season isn’t that magical time of year. While it seems nice to feel like you’re getting something instead of suffering through this painful month, a refund shouldn’t be the way to achieve joy in April.

Money You Could Have Used When You Needed It

The extra money you paid the government was yours all along. You could have used it to pay expenses that were immediate throughout the year. You maybe had a doctor’s bill you had to make a payment plan on. It would have been less of a hassle to have paid it all ahead of time. Why are you paying off a loan because you gave the government one?

Grow Your Money

As you have basically given the government an interest free loan, you no longer have that money to invest. It could have grown while it was in the hands of the government. If the money in the refund was not needed during the year, it still isn’t a Christmas present to get it later. It could have resulted in a larger amount of money in the end if you were able to hold onto it.

There Are Some Benefits to a Refund

While there are certainly a lot of reasons to see a refund in a negative light, it is better for some people. Those who are not responsible with money may prefer the refund option. In order to pay taxes at the end of the year, you have to have money to pay them. You should consider the refund option if you believe that you will not have enough money at the end of the year to pay your taxes. They won’t throw you in debtor’s prison if you can’t pay; however, you will have to make a payment plan with them. That can be a hassle.

Let Us Help

Tax services are better handled by Master Plan Tax Services. Our professionals have been helping people in the Flower Mound TX area with over 50 years of combined experience. We also offer bookkeeping, payroll, and IRS representation services. Consider letting Master Plan Tax Services help you if you live in the Flower Mound TX area.

Contact us today!