"Poverty is no disgrace, but it's also no great honour." - Yiddish Proverb

SavingAdvice.com Blog

Bridging the gap between saving money and investing


Join Now or Login

Taxes

What Happens If You Don’t File Taxes?

By Leave a Comment

what happens if you dont file taxes

Tax day is April 15, 2019. If you don’t file your taxes, or get your return postmarked by that date, you might face some serious consequences. This is true even if accidentally don’t file. If you are wondering what happens if you don’t file your federal tax return by the deadline, here’s what you need to know.

Failure-to-File Fees

If you don’t file your taxes, you will have to deal with failure-to-file fees. Essentially, you are stuck with a costly financial penalty.

The standard failure-to-file penalty rate is 5 percent of your unpaid taxes for every month that you don’t file. This starts accruing once you miss the 11:59 pm April 15 deadline. Although there is a cap of 25 percent, it will add up quickly.

Failure-to-Pay Fees

If you don’t file your taxes and owe an IRS tax debt, you also get stuck with failure-to-pay fees. This penalty is on top of the failure-to-file fees, increasing your tax debt even more.

The standard failure-to-pay fee is one-half of 1 percent every month. These fees also start accruing once you miss the 11:59 pm April 15 deadline. There is no cap on this penalty, so it will keep adding up over time, increasing your IRS tax debt.

IRS Notifications

Once the IRS notices that you didn’t file, they will send a notification letter. It lets you know that you will be paying penalties and provides guidance on how to square things away.

In some cases, the IRS may even create your return for you, using information they collect from your employer, banks, investment accounts, and similar entities. However, the IRS doesn’t consider whether or not you qualify for certain deductions, so your tax bill may be much larger than if you just file on your own.

If you don’t respond to the IRS notifications, then the agency might take more drastic steps. This can include seizing your financial assets, putting a lien against your home, or garnishing your wages. Plus, all of the penalties are increasing your tax debt during this time, so you’ll still have to pay them even if the IRS takes these measures.

Criminal Charges

It is important to note that the IRS does not jail people for owing taxes. If you file your taxes and have an IRS tax bill, you won’t go to prison for the debt.

However, failing to file could land you in jail. Willfully not filing your return is a misdemeanor while tax evasion is a felony. The IRS does have a high burden of proof to show that you intentionally didn’t file, so jail time isn’t really common. It is technically possible though, especially if they can prove that you made the decision not to file on purpose.

How the IRS Catches People Who Don’t File Their Taxes

The IRS is a large organization and handles millions and millions of tax returns. In just one week in March, over 84 million returns were received. Many people would assume that the IRS isn’t going to notice a single missing return, but that isn’t necessarily the case.

One of the things the IRS has one its side is information. For example, if you work for a company, that employer sends the IRS a copy of your Form W-2. Even if you don’t file personally, the IRS knows you had income. Banks and investment companies submit copies of your Form 1099 to the IRS as well, for recording purposes.

While the IRS might not catch your failure-to-file immediately, they will in the future. They will know you didn’t file, and calculate the penalties based on the deadline of April 15, 2019, not when they happened to notice.

What to Do If You Can’t File Your Taxes On Time

Even if you can’t pay the taxes you owe immediately, it is crucial that you file your federal tax return by 11:59 pm on April 15. There are options to help people who can’t pay all that they owe right away, including payment plans and Offers in Compromise.

If you simply need more time, then make sure to file for an extension before the filing deadline. While this won’t help you avoid failure-to-pay fees, it does prevent any failure-to-file fees from accruing as long as you file before the extension deadline of October 15, 2019.

Have you ever forgotten to file your taxes? Share your thoughts in the comments below.

Read More:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

What’s the Best Way to Settle Your IRS Tax Bill?

By Leave a Comment

Each year, millions of Americans discover they owe money to the IRS. For the 2018 tax year, one estimate indicated that around 30 million people – 21 percent of all US tax filers – will end up with an IRS tax bill this year. If you are one of those 30 million, addressing the situation is a must. Otherwise, you could accrue penalties. As well as increase the size of your tax debt.

What You Need to Do

First and foremost, regardless of whether you can afford to pay what you owe, you need to file your tax return. Failing to file on time could leave you facing some large penalties. Many of the penalties may be much bigger than just being unable to pay.

The normal failure-to-file penalty is 5 percent of your unpaid taxes every month. Although it may not exceed 25 percent, it can add up quickly. Plus, you also have to pay the failure-to-pay penalty on top of the failure-to-file penalty.

In comparison, the failure-to-pay penalty is one-half of 1 percent of your unpaid taxes each month after the filing deadline of April 15. While that still increases your debt, it is a much smaller penalty. By filing on time, even if you can’t pay, you limit the amount of the penalty fees you will owe.

How to Pay Your IRS Tax Bill Immediately

If you can afford to pay your IRS tax bill right away, then you have a few options. For paying the balance in full, you can either submit payment through the IRS website, over the phone, or mail a check or money order.

To pay online, you have to create an IRS account at the IRS website. Once you do, you will be able to see your tax year and go through a simple process to submit your payment. You’ll receive a confirmation when the payment processes, and there are options to pay using a checking or savings account for free. If you choose to pay with a debit or credit card, the payment processor (not the IRS) usually charges a convenience fee.

For paying over the phone, you will need to use a credit or debit card and could have to pay a convenience fee as well. If you mail a check or money order, there is no convenience fee.

However, you do have to send additional forms to make sure your payment is applied to your IRS tax bill. If you filed your taxes online, the required forms usually appear in your final tax return documents. You also need to make sure you send everything to the right address based on your state of residence. If you can’t find instruction in your tax return, you can refer to the IRS website to make sure you handle it properly.

How to Get a Payment Plan with the IRS

If you can’t afford to pay your IRS tax bill immediately, you can try to set up a payment plan. One of the easiest options for starting the process by creating an IRS account online and applying for a payment plan. However, if you file your taxes online, you may also be able to request a payment plan through your tax software, though this isn’t always available.

Setting up a payment plan for 120 days or less lets you avoid any setup fees, though you will accrue interest at the failure-to-pay rate. If you need more than 120 days, you will need to pay a setup fee (unless you are eligible for a low-income waiver).

If you use direct debit for your payment plan, your setup fee is reduced, but not eliminated. Plus, you don’t have to worry about whether your payments will be on time, which can be a great stress reliever. However, non-direct debit options are also available.

Anyone who has questions about the options should contact the IRS directly. An employee can explain the various programs in detail and make sure you can find an option that works best for you.

How to Settle Your IRS Tax Bill

If you owe a large sum to the IRS, you may be able to settle the debt for less than you owe. Known as an Offer in Compromise (OIC), you essentially work with the IRS to settle your IRS tax debt for a smaller amount.

It’s important to note that not everyone qualifies for an OIC. If you could pay the amount in-full upfront or with a payment plan, your request will likely be denied. However, if you have filed all of your present and past returns, and made any required estimated payments or deposits during the current tax year, the process may work for you.

Typically, for an OIC, you have to offer an amount that is equal to or above what the IRS deems is your Reasonable Collection Potential (RCP). This is a measure that estimates your ability to pay, assessing everything from your income to various assets (such as real estate, vehicles, bank accounts, and other property) to decide how much they think you can manage.

The amount you offer can either be a lump sum or based on a payment plan. However, if you opt for the latter, you do need to be able to make the first proposed payment immediately. Remember, the IRS can say no. However, if what you owe is unmanageable, it is worth contacting the IRS and exploring the option.

It’s important to note that the OIC process is exactly what the IRS debt service companies do if you work with them. However, they will charge you a fee for something that you can handle yourself, so don’t default to that approach thinking it will save you more.

Have you ever settled a tax bill? Share your experience in the comments below.

Read More:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

When Is the Last Day to File Your Taxes?

By 1 Comment

last day to file your taxes
This is the time of year we also start thinking about making sure our taxes are filed. This year, the Internal Revenue Service (IRS) is giving two states a little more time. Here’s the last day to file your taxes in 2019.

When Is the Last Day to File Your Taxes This Year?

Usually, the deadline to file your taxes as an individual is April 15 each year, and this year it’s no different. However, this year, residents in two states, Maine and Massachusetts, have until April 17 to file. This is because Patriots’ Day is an official holiday in both states, commemorating Revolutionary War battles, which falls on April 15 this year. Usually, this meant an extra day to file taxes. But this year, Emancipation Day, the holiday honoring the end of slavery in the District of Columbia, is on April 16. Because this is a legal holiday in D.C., the IRS can’t require residents of Maine and Massachusetts to file their tax returns on the 16th.

Other IRS tax filing dates you should know:

  • January 15: Those who are self-employed and file quarterly, or file quarterly for another reason, will need to have their forms postmarked for January 15.
  • April 15: This will be the big due date for multiple forms. Not only are individual tax returns due for the 2018 year, but the forms to request an extension are due at this time as well.
  • April 18: This is the first month for the self-employed or quarterly filers, and they will need to have their paperwork in by the 18th.
  • June 15: The 15th of June is the due date for the second quarter of estimated tax payments. Again, this applies to those self-employed or filing quarterly.
  • September 17: The third quarter income needs to be filed and mailed by September 17. Then, the fourth quarter estimates will not be due until January 2019.
  • October 15: Should you have to get an extension, you will need to have the forms filled out and dated for the 15th.

Things to Keep in Mind

If you have not reviewed whether or not you should hold more or less from your refund, 2019 might be your year to do a checkup. The IRS recommends taxpayers to do a mid-year withholding check-up to make sure the appropriate amount is taken out for your situation. This helps prevent a potential hold on your refund and prevents your tax rates from going up due to major life changes such as marriage or divorce.

With finances, you should try to always plan ahead. Your taxes are not exempt from this effort. In fact, not only is it wise to do a withholding checkup, but you should think about the best ways to use your refund. Using it to pay off old debt or placing it directly into a retirement fund are two efficient ways to use your check.

The last day to file your taxes is right around the corner. You can avoid hiccups by being as prepared as possible now.

Have you filed your taxes yet? Share with us in the comments below.

Read More:

Here Are Your Top 10 Tax Questions Answered

By Leave a Comment

tax questions

If you’re like most people, you have a lot of tax questions. Sure, you know how to do the basic things when it comes to your taxes. But, you want to maximize your refund without making any mistakes. Therefore, a lot of questions come up. With tax time fast approaching, we wanted to make sure you have the answers to your top 10 tax questions.

Tax Questions and Answers

It makes sense to have questions when it comes to filing, especially if you’re wondering things like why your refund is smaller. Here are some of the most common tax questions and answers.

1. Do I Have To File Taxes?

If you earned money in the United States in 2018 then chances are that you have to file taxes. However, there are some exceptions. They depend upon several factors including:

  • Age
  • Dependency status
  • Filing status
  • Gross income

If you are 65 or older, then it affects the income requirement for filing. For example, if your filing status is “single” and you are under 65 then you must file taxes if your gross income was $12,000 or more. However, if you are over 65, then you can make up to $13,600 before you are required to file.

tax filing requirements

The above chart is from IRS Publication 501. It shows you the basics of whether or not you need to file 2018 taxes. However, there are exceptions. For example, if you received $400 or more from self-employment or any amount at all from a Health Savings Account, then you need to file. Therefore, if you are considering not filing, you should review this publication in its entirety to make sure that’s okay. After all, if you are supposed to file but don’t then you might get charged penalty fees.

2. Should I Claim a Dependent on Taxes?

One of the biggest recent tax changes was the elimination of personal exemptions for dependents. In other words, you used to get a certain amount of deduction per child or another dependent. However, that’s no longer the case. Nevertheless, if you have dependents, then you might still benefit from claiming them.

For example, although you no longer get a deduction for children who are dependents, you can still get the Child Tax Credit. In fact, more people qualify for this credit than before. Here are the details:

  • You have at least one child who was age 16 or younger in 2018.
  • The child has a valid SSN.
  • You earned at least $2500 in income in 2018.
  • As a single taxpayer, you earned $200,000 or less.
  • As a joint filing married taxpayer, you earned $400,000 or less.

You can get $2000 per child from this credit.

3. Do I Qualify for the Earned Income Tax Credit?

If you are a low-income or mid-income earner then you likely qualify for the Earned Income Tax Credit. As long as you earned at least $1 in income, then you might qualify. You must either be single or married filing jointly to receive this credit. You cannot have received investment income exceeding $3500. Furthermore, you can’t have received foreign income. With that in mind, you may qualify for the EITC if you meet the following criteria:

  • You have 0 children and earned less than $15,270 (single) or $20,950 (married, filing jointly)
  • You have 1 child and earned less than $40,320 (single) or $46,010 (married, filing jointly)
  • You have 2 children and earned less than $45,802 (single) or $51,492 (married, filing jointly)
  • You have 3+ children and earned less than $49,194 (single) or $54,884 (married, filing jointly)

4. I’m In School. Can I Claim an Education Credit?

There are two education credits available: the American Opportunity Credit and the Lifetime Learning Credit. Furthermore, there is the Tuition and Fees Deduction. (Deductions reduce your amount of taxed income whereas credits give you direct money back.)

Each of these credits has its own requirements. For example, you need to be at least a half-time student in the first four years of college to qualify for the American Opportunity Credit. In contrast, the Lifetime Learning Credit is available to students at any stage of higher education who took at least one course in 2018.

Therefore, if you’re a student, and you haven’t maxed out your credits, yet, then you might qualify for a credit or deduction. Review IRS form 8863 and Publication 970 for more details.

5. Should I Take the Standard Tax Deduction?

You have the choice to take a standard tax deduction or to itemize your taxes. If you’re filing as single or married (filing separately) then the standard deduction for 2018 is $12,000. It’s twice that if you’re married, filing jointly. It’s $18,000 if you’re filing as head of household. Therefore, if your itemized amount is less than that, then you’ll want to take the standard deduction.

Of course, the only way to determine that is to itemize and see the numbers. Tax software generally makes that process fairly quick and easy. However, if you’re not using tax software, and you want a quick guesstimate about whether or not to take the standard deduction, then one way is to check your mortgage interest deduction. Look at Form 1098, which is the Mortgage Interest Statement you should have received. If that amount is close to or higher than the standard tax deduction, then you should itemize for the biggest refund.

6. I Used to File 1040 EZ or 1040 A. What Should I Do This Year?

There used to be three forms of the 1040 tax form, including the two mentioned. However, the rules have changed. Now you will just use form 1040. It’s the same form for everyone. It’s been redesigned to streamline the process.

7. Do I Need to File Any Schedules with My 1040?

As mentioned above, everyone will file their taxes using Form 1040. However, if you meet certain circumstances, then you may need to file one or more of the following schedules in addition to that form.

Schedule 1

You may need to use this schedule if you have income in addition to your regular wages. For example, if you received alimony, rental income, or gambling winnings over a certain amount then you may need to use this form.

Likewise, you may need to use this form if you made certain payments that affected your income. If you paid alimony, student loan interest, or deductible moving expenses then you use this form.

Schedule 2

You need to file this if you owe the alternative minimum tax or the excess advance premium tax credit repayment

Schedule 3

You may be able to get certain credits using this form. They include the foreign tax credit, education credit, and home energy credits.

Schedule 4

You may owe additional taxes in certain instances, in which case you will add this schedule. For example, you’ll use it if you owe a self-employment tax or a retirement plan tax.

Schedule 5

You need to file this if you plan to claim a refundable tax credit except for certain ones including the earned income tax credit. You also need to file this if you are making a tax payment related to getting a tax extension.

Schedule 6

If you have a foreign address then you need to use this schedule. You also need to use it if you want to allow a third party to discuss your taxes with the IRS.

The above situations are some, but not all, of the reasons to use each of those schedules. Review your taxes in depth to determine if you require any of these.

8. Are Social Security Benefits or Pension Taxable?

Social Security benefits are taxable. It’s calculated based on your combined income which is your adjusted gross income plus half of your social security benefits plus any nontaxable interest. If that number is at least $25,000 (single) / $32,000 (married, filing jointly), then you owe taxes on your Social Security benefits. The exact amount varies depending on your income.

If you have a pension, then it is likely to be taxable, too. There are some exceptions. For example, certain military pensions are partially or entirely non-taxable. If you received a 1099 for your pension then it will tell you the exact amount that is taxable for 2018. Check that for your personal information.

If you made a withdrawal from your retirement plan, then that is probably taxable. For example, if you took money out of a 401(k) or an IRA in 2018 then you’re probably going to owe taxes on it. However, you only owe for the withdrawal. If you earned interest on those same accounts but did not make a withdrawal then you do not owe taxes on it at this time.

9. When Will I Get My Tax Refund?

It typically takes 1-2 weeks for you to receive your tax refund. If you get direct deposit, which is the quickest option, then it should arrive in your account in approximately that amount of time after you file. If you request a check instead, then it should be mailed by then, and it will take another 3-7 days before it arrives in your mailbox.

However, the closer you file to the April 15th deadline, the more likely it is that you’ll experience a delay. Moreover, if you have applied for either the Earned Income Tax Credit or the Child Tax Credit, then your refund may take a little longer. The IRS apparently reviews those two things more carefully than other tax form details.

10. How Can I Get More Tax Answers?

One of the best places to ask your tax questions is through the Interactive Tax Assistant Search on the IRS.gov website. You aren’t connected to a live person, so you won’t get answers to detailed, rare-scenario questions. However, you can find answers to all of the most common tax questions through this tool. You’ll be able to enter your own specific information to get an answer that is right for you, rather than just a confusing general answer.

What are your biggest tax questions?

Read More:

Get the Facts: Don’t Let These Tax Myths Fool You

By Leave a Comment

 

tax myths

There are a lot of tax myths circulating around this year. Some of them are related to 2018 tax changes; others are just rumors that the blogs have picked up and reported as facts. Still, others relate to persistent questions that the IRS frequently faces.

If you get too wrapped up in tax myths, you can easily get overwhelmed. However, you don’t have to let this happen to you. For the most part, you can go about filing your taxes just as you normally would. Here’s a breakdown of three tax myths you should know about.

1. Tax Myths: Phone Calls and the IRS

There are several different tax myths when it comes to speaking with the IRS by phone.

Fact: The IRS May Call You, But Be Wary

The first myth is that the IRS never calls you. This myth came about because there are a lot of unfortunate scams out there. If someone contacts you via email, phone, or even in person, claiming to be an IRS representative, then you should definitely be wary of a scam. Oftentimes, scammers do exactly this. They do so to get your information and/or your money. Don’t give it to them.

However, it’s a myth that the IRS will never call. In fact, they do call people. They also visit people in their homes. There are three common situations that might trigger the IRS to call or visit you at your home or business:

  • You have an overdue tax bill
  • Your tax return is delinquent
  • There is a delinquent employment tax payment
  • To tour business as part of a criminal investigation or an audit

Here’s What You Need to Know

Based on an April 2017 Fact Sheet from IRS.gov:

  • The IRS almost always contacts you by snail mail first, usually multiple times.
  • The representative carries two forms of IRS ID. You have the right to see them.
  • In fact, you can request the phone number to verify the ID and the person has to give it to you.
  • They will never demand immediate payment, even if you owe money to the IRS.
  • They will advise you of your rights as a taxpayer.
  • A real representative will never make any threats.

In almost every instance that an IRS representative might call you, it won’t be a surprise, because you’ll have received several notices in the mail. You are always notified in advance of audits and delinquencies. After a long period of unpaid taxes, during which you’ll have received many notices, the IRS can pass your debt off to a private tax collector. You’ll be notified about that in writing.

So, the myth is that IRS calls are always a scam. The truth is that the IRS may call you, but only under certain conditions, and you have a lot of recourse to make sure they really are who they say they are.

Fact: You Can Call the IRS

Another related tax myth is that you can’t call the IRS. This is a bit of a fuzzy one. The truth is that you can indeed call the IRS. You can even sometimes talk to a real live person. However, the reason that this myth persists is that calling the IRS is often a waste of time.

If you want to call the IRS, they have different numbers depending on whether you’re calling about an individual, business, or special taxes (such as excise taxes). You’ll need to look up the correct number then call during their advertised hours of availability, which are typically 7-7 M-F. Wait times can be very long, especially at the peak of tax season.

It’s important to understand that if you’re calling about your own refund, it takes time to get an answer. Don’t bother calling if it’s been less than three weeks since you filed an electronic return or six weeks since filing a paper return. If you have IRS questions, your best bet is to search the IRS.gov website. However, if you do need to talk to a person on the phone, it is possible to do so.

2. Tax Myths: 2018 Tax Refunds Will Be Slow to Come

There have been reports all over the Internet that tax refunds will take forever to arrive this year. People are reporting this for a number of reasons. The recent government shutdown concerned some people. Others said that adapting to the new tax changes will slow the IRS down. However, the IRS reports that this isn’t true at all.

The IRS says that 90% of refunds are sent within ten days of receipt by the IRS.

It is true that if you already filed your taxes early this year then you might have seen some delay in your refund. In particular, people who received the Earned Income Tax Credit and/or Additional Child Tax Credit had some delays. However, those delays don’t apply to people filing closer to the April 15th deadline.

As with all other years, you’ll receive your tax refund most quickly if you file electronically and also accept a direct deposit return. If you file by mail and/or request a physical check, then it naturally takes longer. All people who file by April 15th should receive their returns no later than May 24, 2019.

3. Tax Myths: Confusion over Tax Transcripts

You can request a tax transcript free online from the IRS. It has all of the major information that you need about all of the federal tax returns you have filed in the past. People typically request these when they need that information to qualify for a loan but haven’t kept their own records.

So, what’s the myth? Apparently, a lot of people presume that requesting a transcript will give them information about the status of their refund. That’s not true. In other words, if you’ve filed your taxes, and you want to know when you’ll get your refund, your tax transcript isn’t going to help you. It doesn’t have any information about the timing of the refund or even the amount you will get.

The IRS has an online tool called Where’s My Refund if you do want that information.

Have you heard any new tax myths this year? Share with us in the comments below.

Read More:

Why Is My Tax Refund Smaller This Year?

By Leave a Comment

why is my refund so low

With the 2019 tax filing season underway, one thing has become abundantly clear; the average tax refund is smaller. The newest round of tax reform rule changes are hitting some people right in the bank account, and leaving many filers surprised. However, tax filers themselves can also be responsible for part of the drop. If you have filed and are now wondering “why is my refund so low,” here are some potential reasons.

The Tax Cuts and Jobs Act

In 2018, the Tax Cuts and Jobs Act took effect. The IRS adjusted all of the tax withholding tables which determine how much is withheld for income taxes from employee paychecks. Plus, certain itemized deduction options were changed or eliminated, and the standard also shifted.

Ultimately, the legislation was a massive overhaul of the tax code, and most weren’t sure exactly what their refund would look like until they filed. Since the new withholding tables caused many workers to have less withheld from their paychecks, something that benefited them throughout the year, their refunds ended up smaller.

Additionally, some deductions were limited or eliminated. For instance, the state and local tax deduction was capped at $10,000 for the 2018 tax year. As a result, those who spent more in state and local taxes couldn’t deduct any amount over the $10,000 limit.

Unreimbursed employee business expenses used to be deductible. But, after the Tax Cuts and Jobs Act, that isn’t an option. Changes to the child tax credits also negatively impacted some households.

Not Updating Your W-4

Withholding tables aren’t the only thing that determines the amount withheld for income taxes. What you list on your W-4 also plays a role.

When you claim exemptions, you are reducing the amount that is withheld based on a specific formula. Depending on how you completed your last W-4, it may not have been appropriate for your situation once the new laws came into effect.

For example, those who received substantial pay increases might not have adjusted their W-4’s to compensate for the additional pay and how the tax code updates impacted their tax rate. As a result, they underpaid, leaving them owing taxes instead of receiving refunds.

Similarly, if you previously had a dependent child reflected on your W-4, but that child didn’t qualify as a dependent this year, you might not have contributed enough in taxes. Unless you actively update your W-4, your employer won’t know that your situation has changed, so they can only update your withholding if you complete a new form and submit it to your payroll department.

Precisely why your tax refund is smaller depends on your unique circumstances. However, any of the factors above could have played a role. If you want a clearer picture based on your situation, speaking with a tax professional might be a smart move.

A Smaller Refund Isn’t Necessarily a Bad Thing

While many people count on their refunds for making large purchases, paying off debt, or similar activities, getting a smaller refund isn’t inherently a bad thing. When you get money back from the IRS, that means you overpaid. When your refund is more modest, you are getting more of your income in each paycheck, giving you the ability to relax your budget, increase your savings, or otherwise benefit from the additional cash.

Ideally, you want to try and break even when you file your taxes. When you don’t owe the IRS, and they don’t owe you, you maintain proper control over the portion of your income that doesn’t have to go to taxes.

When you over-withhold, you are missing out on an opportunity. The IRS doesn’t pay interest on the money you send, even when you give them too much. If that money were in your savings account instead, for example, you’d earn interest during the year, which is a much smarter financial way to go than getting a refund check from the IRS.

Was your tax refund smaller this year? Share your thoughts in the comments below.

Read More:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.