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4K TAX REFUND!

March 10th, 2009 at 05:39 pm

Did our taxes over the weekend. Got a nice $4k refund (federal), owed state $97. It's still not bad. It's perfect timing since we are ready to pay our property tax bill $1600 next week. We plan to keep save the rest of the money building our EF.

3 Responses to “4K TAX REFUND!”

  1. NJDebbie Says:

    / That's awesome. Some people say that we're giving the federal goverment an interest-free loan, but quiet frankly I don't care. I like getting money to fix the house or do something fun with it!

  2. tripods68 Says:

    Same here...i don't really buy the idea earning $4 or $10 interest on that excess refund instead of loaning to the government. It's just not worth it. I do like the idea of just having something back in return cuz its something we look forward too.

  3. disneysteve Says:

    Glad you are happy about the refund, but keep in mind that those of us who say refunds are a bad thing aren't necessarily concerned about the few dollars in interest that you pass up. I agree that it is pretty insignificant. What matters is what you could be doing with that money instead of lending it to Uncle Sam. It is a liquidity issue.

    You plan to use $2,400 to boost your EF. That means that all year, you've had an underfunded EF. What if you had needed that money for a car repair, a broken appliance, a medical bill? It wouldn't have been there.

    Even more important, what if someone is carrying other debt like credit card or car loan or student loan? By overpaying taxes, they are delaying the debt repayment and paying interest, possibly at substantial interest rates. It just doesn't make sense to me for someone to be paying 12 or 15 or 19% interest on a CC all year and then get excited about getting a refund of a couple thousand dollars. It would have been a lot better to pay an extra $200/month (average refund is in the mid-$2,000 range) to the credit card and save all the interest charges.

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