Come April 15th, or before are you getting a refund or do you have to pay?
If you are are rejoicing over you super-big refund of free government money...not so fast. All you are getting back is the principle from a no interest loan that you gave Uncle Sam.
Think of it this way, They pay you nothing extra if they give it back, not even a "Thank You Nice Lady!" Or...the charge you more then 10% if you are plus penalties! They will take everything you own to get at it.Pretty good business if you can get it!
With that sort of brute force behind you it is understandable that you would rather be safe than sorry. Or maybe it is just that you have a hard time saving and this is a great way to force you to do it.
Totally understandable. The real idea is not to recieve a lot or pay alot. It is to have the maximum available to you with out causing pain.
This is the time of the year when you should review your wthholdings. Here is a great calculator to look at this as well as some "what if" situations with your 401k. Now is the time to fix it now so you are getting your whole amount all year!
If you are havig a hard time budgeting savings, then see if your company does Direct Deposit, if so you are usually able to direct it to be paid into multiple accounts. Just pick an amout you want to save, divide it by how many times you are paid, then have that amount sent to a high-interest saving site such as E*Trade or ING. You will then get the same amount Plus Interest!
You'll get a smaller return next year, but you'll give yourself a raise!
Tuesday, February 12, 2008
(Picture from Freakingnews.com)