Here's the beautiful thing about our tax system. They say the objective is to owe a small tax each year. This indicates that you haven't overpaid the government throughout the year requiring them to refund you money. If they owe you a refund, they've been gaining interest on your money all year.
I can change my withholdings on my W-4 to limit how many taxes come out each paycheck. Last year, I followed the W-4 instructions exactly and had 10 deductions (one unemployed wife and two kids). This many deductions meant I paid $0 federal income tax all year. Even though I paid no federal income tax, we just computed our tax refund at $1562. I love it. I paid nothing all year long and they still send money back!
During 2007, I will have 13 deductions and still pay $0 federal income tax. Having kids and a mortgage are definately a big boost to my tax refund. Wohoo!
2 comments:
That's sweet. Comes at a good time with the baby coming huh? We are using our tax refund money to fix our house.
The part I like the best is that it makes me feel like my taxes go directly into your pockets. Takes some of the sting away.
Mark
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