~~Weekly Newsletter – HOW ARE WE DOING?
Weekly Newsletter: We just finished our taxes, most of us, and discovered whether we owed or were owed or if we broke even. If you broke even, then you are probably doing pretty good managing your taxes and your money. If you owed taxes, then it’s back to the drawing board for you. If you got a big, fat refund, then it might also be back to the drawing board for you as well. I am not asking you to turn down money; I am simply suggesting you don’t give it away.
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- Also Read: What Does the Federal Retirement Process Look Like?
Waiting for a yearly tax refund as some kind of big gift from the Internal Revenue Service (IRS) is as much of a myth as flying horses. A gift cannot be a gift when it is already yours. There is no lesson given that says – Avoid a Tax Refund. You see the mere word REFUND indicates that something is being given back to you that is already yours. The taxes you overpaid during the year are being refunded to you just as you doled them out. But it is really not the same money, it is actually less because the value of the money you gave to the IRS is not the same value as what they are returning to you in the form of a refund.
Sometimes tax refunds are great if your deductions and other contributions are such that a refund is warranted. Otherwise, it might be a good idea if you are getting big refunds to pay a visit to your Human Resources Office and ask your payroll specialist to review your withholdings with you to avoid not having enough taxes withheld and having too much withheld.
If you get a tax refund of $3,000, why not right-size your withholdings and place those funds in an instrument where you can earn interest and make your money work for you. The IRS does not need your money, but you do. You need it for the safety and security of your family.
If you owe the IRS, you are charged interest plus penalties. The only reason it would make sense to let the IRS keep your money all year would be if the IRS paid you interest and a penalty fee for holding your money. It will never happen. The economy is not healthy for most Americans; therefore it is not a good idea to throw your hard earned money out of the window. It is not even a good idea to throw your money out of the window when the economy is robust.
Manage your money by managing your taxes well. Living well in retirement means taking care of your resources now so that your resources outlast you. This concludes our weekly newsletter.
P. S. Always Remember to Share What You Know.
Dianna Tafazoli
