Turning Next Year’s Tax Refund into Cash in Your Pocket Now
Many taxpayers like to receive an income tax refund each year. But before you give Uncle Sam an interest-free loan, consider your other options. 415 Group Principal Kathy Krohn, CPA, shares her insight:
“Some people like to receive a large tax refund at the end of the year, while others like to pay the minimum amount necessary to avoid penalties. Everyone does it for different reasons, so it really depends on the individual’s comfort level.
It’s good to review your withholdings each year when you file your tax return or after any major life changes, such as getting married, having a child, changing jobs or buying a house.
If you decide to make an adjustment, you can alter your scheduled estimated tax payments or change your payroll withholding amounts. But be cautious when completing your Form W-4 - these forms can be misleading. If you follow the form, it may talk you into additional exemptions where you don’t need them. You need to understand the terms and what they mean.
When in doubt, give us a call. At 415 Group, we can run projections, so you have a better idea of where you’re going to be at the end of the year based on current income and projected income.”