Overpaying Taxes.....Again

This tax season, as in previous years, about 75% of individual taxpayers will receive a federal income-tax refund, with the average refund totaling around $3,000. From a purely economic standpoint, this makes no sense! If we hate paying taxes, then why do we consistently overpay them, collectively lending Uncle Sam some $300 billion every year interest free? The rational thing to do is to pay just enough taxes throughout the year to avoid owing a penalty at tax time, and then pay any balance due when you file your return. That way, you get an interest-free loan from Uncle Sam instead of Uncle Sam getting an interest-free loan from you.

Team PaycheckCityMay 22, 2012

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