Is loving a big tax refund actually smart, or a financial red flag?

[LaFemmeFatale_1]

I love it!

Was so happy yesterday!

I got two years of tax refund, because I didn’t apply last year. And almost danced with happiness. I know it’s not a good thing to get a big tax refund because it means you overpaid. But I got my medical bills tax refunds back too, because of my broken leg in 2024.

Updates

4 mo

I love how AI changes my question in a way that criticizes me hahah

[Kaneki05]

Well due to inflation that's a bad thing as you delayed money you could've already in a savings account or invested or even just spending it before things go up.
It does feel great to get a lump of cash all at once but in reality it lost you money.
I know myself my savings account was higher interest back then, plus what I invest into was cheaper so such examples show why it'd been better not to screwed up like that.

Thus why you only go over slightly. I'd say it's sign of using finances efficiently... most people don't so you can take solace in that I suppose but it's also why some get further than most.

[Kaneki05]

Not using finances efficiently*

[exitseven]

I usually owe money at the end of the year. I have the bare minimum deducted from my pay and usually pay 3 or 4 thousand dollars at the end of the year. This year with the new Trump tax cuts I got a nice $1960 refund.

Having too much deducted from you pay is not s red flag. Some people do this because it is the only way they can save any money. However if you should die I would rather die owing the government money.

[exitseven]

Thanks for the MHO😎

[midnightmoon05]

You filed under US? Or a different country?

in the US someone said it’s against the law to not file.

since you just did… it’s good.
I am terrible with these tax stuff… so I just let my accountant do the work… we get back some but not much.

From my limited understanding…it’s better that we own than getting refunds… because it means we pay too much tax and they will give back… but they were holding our money for the year…

or we can have the money in hour hands and invested.

[LaFemmeFatale_1]

Not in the US. Where I live it’s okay to file in 3 years.

[Chazmatazz269]

It’s not ideal. You’re losing money when you get big tax returns. Breaking even is ideal, but nearly impossible. So the best move is to figure out your exemptions so that you can put more money in the bank with every check and then pay as little as possible at tax time. This way you’re earning interest on that money. The IRS doesn’t pay you a single penny of interest for holding onto it. F*ck them. Make them wait for their cut and earn some interest on it for yourself.

[slatyb]

You are lending money to the government interest-free. It's a sign that you should modify your W-4 to reduce the tax withheld. Probably you should increase your withholding exemptions from one to two. Then save or invest the money not being withheld. You need to have a cash reserve for emergencies, and when you have saved that much, start investing.

[bolverk]

If I were you I would put that tax refund in a high interest savings account and leave it there while I checked with the IRS that the tax refund is valid.
It is better to double check and find out that is for real, than spending the refund and then have the IRS demanding its return.

[nolabels]

Yes, the G@G AI has got to go.

I like to keep my tax withholding at a point where I'll owe some bucks come filing time, but not so much that the feds come looking me up.

[NathanDavis]

that AI is after you... lmfao

[LaFemmeFatale_1]

🤣🤣🤣

[Ariesman81]

Letting the government use your money interest free for a whole year is no bueno.

[888theGreat]

1) Its your money , you didn't get or win anything

2) Gov stole more than you owed and that is why you get some back

3) They are using your money to kill children

[Still-alive]

Well im loving mine lol

[Still-alive]

you can turn off the ai title suggestions before you post the question by the way

[LaFemmeFatale_1]

I forget sometimes

[beefcakebradybatson]

Yes. Most Americans can't comprehend true friendship. (America lads;the ladies generally have many girlfriends.)

[In_Trance]

It's stupid.
Somebody else investing your money for the year, making a ROI and then giving you only the principal back

[Jeff51]

We file single zero. We get some back

[LazloValenka]

I agree with you about the ai.

[Grond21]

It is a sign of government cheating, in my opinion