Most people love tax time for one thing: a big refund. Of course, there’s not much else to love about it. But things are a little different this year. Those big tax refunds people are used to getting are not showing up. So far, the average refund is down by 8 percent this tax season. So why the change?
The reality is most taxpayers have been receiving more income all year long, via larger paychecks. But many people haven’t really noticed. The truth is whether the money comes all in one chunk or little by little most taxpayers have seen their tax bill go down this year.
However, even if you do still get a large refund, the fact is you’re doing it wrong. In most cases, getting a large refund means you’ve overpaid the government all year and they’ve been using your money.
Ideally, it’s better to get a small refund, or no refund at all. That means you’ve had access to your money all year long.
It’s still early in the tax season and bigger refunds could still be coming. But if the early signs are any indication, many taxpayers will be disappointed at the size of their refunds. But remember, a small refund is not necessarily a bad thing.
The post Why You Shouldn’t Be Planning on a Big Refund first appeared on Advisors to the Ultra-Affluent – Groco.
