It won’t be long until we are thinking about filing our income taxes and for three-quarters of the United States, anxiously awaiting our refunds. That is correct, over 75% of U.S. tax filers actually get a refund, and the average tax refund in the United States is roughly $3000. I have, as a financial planner, some issue with the idea of giving the Government an interest free loan every year. Despite the interest earnings, there is also a problem with access. In the best case, you will wait each year until May to use your own money. In the worst case, you will be one of the millions of people that pays the equivalent of 500% annualized fees and interest or more in one of the many tax refund advance programs.
Many people appreciate the “forced savings” of their tax return believing that they lack the discipline to set this money aside throughout the year. But, I’ve been thinking about this differently after an article I read on Facebook. I use ARK’s Facebook page heavily (www.facebook.com/arkwm) to post articles that I think are interesting and to communicate with present and future clients of ARK Wealth Management. Recently, I found an article which claimed that the 2014 tax refunds won’t be paid this year until October of 2015. It didn’t seem so ridiculous.