With tax season upon us again, many people are wondering when they might expect to receive their tax refund.
Some people believe that getting a large tax refund is not as desirable as more accurate withholding throughout the year, as a large refund represents a loan paid back by the government interest-free. Optimally, a return should result in a payment owed of just less than would cause a penalty charge, which is 100% of the prior year’s tax (110% for high income individuals), 90% of the current year’s tax, or $1,000 for individuals who have direct withholding and do not pay estimated tax.
However, some people use the tax refund as a simple “savings plan” to get money back each year (even though it is excess money that they paid earlier in the year). Another argument is that it is better to get a tax refund rather than to owe money, because in the latter case one might find oneself without sufficient money in their checking account to make the necessary payment. When properly filled out, the Form W-4 will withhold approximately the correct amount of tax to eliminate a refund or amount owed, assuming the W-4 was filled out at the beginning of the tax year.
If you’re one of the lucky ones expecting to get a tax refund this year, here’s some news about when you can expect to get that tax refund after you file your taxes…
For more information on tax refunds and other tax related information, just click over to the Taxes Category under Vero Beach Real Estate Categories to the right.