Refund or Pay More Taxes, You Decide

by Ron Haynes

Note: This is a guest post from

irs_deadlineTake a good look at your most recent pay stub and note the box that identifies how much in taxes the government skimmed off the top of your pay. Those funds are supposed to be used for better roads, cleaner water, and of course to pay the salaries of the elected officials.

In the spring, when taxes are due, refunds are met with joyful dancing and unexpected windfall spending. Wouldn’t it be better to get more greenbacks each pay period rather than lump sum windfall at the end of tax season?

When you overpay your taxes each pay period, your money is used for ‘free’ by the government. It skims a percentage from each paycheck and if you don’t ask for it back, it keeps it. It is up to you to prove that you have paid the government too much by filing your tax return. Usually when money is borrowed, the lender gets paid an interest rate.


If the government owes people money from overpayment of taxes, it doesn’t have to pay interest. Ironically, if the tables are turned, the government certainly charges interest (and penalties and fees) on money owed to the Treasury should the taxpayer fail to pay by the deadline! Seems just a bit unfair, don’t you think?

Forced Saving

Sometimes it is easy to determine the withholding tax. A single person, for example, may receive one W-2 form and the government extracts (via your employer) a certain amount per pay period. This person typically gets a refund.

But this means the government was paid more money than necessary. This can be seen as some as a ‘forced saving’ routine. The government takes off more money than is necessary and after tax time everyone forgets about it because they are so happy they got a refund rather than having to pay more in taxes.

‘Forced savings’ at best puts more money in the hands of government officials to satisfy day to day operations. The worst of the forced savings is that the government has use of the money rather than the person that made the money.

Earn More Money

The money that the government takes in taxes every pay period is earning them money. Each year the government plans on millions of people paying too much on their taxes throughout the year. This money earns interest in the coffers of the government until they have to pay it back to individual tax payers.

Why not LEGALLY reduce the amount that the government takes each pay period and put it to your own good use? Rather than giving YOUR money for excess taxes, keep the funds, invest them and make more money with interest. Taxes will have to be paid on the interest, but rather than handing your excess cash over directly to the government, why not make some interest on it until tax time? It might make you a tidy sum … certainly more than you would make otherwise! It may be even more than what you were expecting with a tax refund.

This article is provided for, a site designed to help with tax debt.  If you are in need of IRS debt help, this site can help you figure out what your options are.

Technorati Tags: ,,,

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

Previous post:

Next post: