Tax RefundsSome experts say that tax refunds are not really fair to the American population, but to many of us receiving that check every year is a great way to boost our savings account, take care of some debt that has been piling up, or even take a vacation. Why would it be unfair? Financial experts point out that the tax refund is like a loan that the government is paying back to you with no interest. You give the government money that is rightfully yours, they are able to use it for free, and then repay you with no interest. For most of us, however, we see the tax refund as a savings that we get back. What qualifies you for a tax refund? If the tax that you owe the government is less than the total amount of refundable tax credits that you are able to claim and the amount of the federal withholding that you already paid, the government will pay you back. This is possible because of a recent tax law that created a new ten percent bracket. Depending on the tax category that you fit into, the first six to twelve thousand dollars of your income will be taxed at ten instead of fifteen percent. While the government is using our money and then giving it back to us at a later date, because Americans are known to be consumers that are piling up debt, it may be helpful to many Americans. If they don’t have the money, they can’t spend it. For those of us that spend money when we don’t have it in the first place, it will be nice to get that money to pay off debt. If you are responsible with your money, it is a great bonus check every year that you can use for a variety of things—toys, savings, or vacations. |
