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Getting A Tax Refund ? You’re A Sucker

by @ 9:20 am on April 7, 2010. Filed under Economics, Personal Finance

Since it’s tax season again, it’s time for me to say it once again —tax refunds are for suckers.

It’s somewhat incomprehensible to me that there are people out there who don’t realize a very simple fact — getting a tax refund means you’ve spend the last 12 months giving an interest-free loan to the government. You overpaid them, and the money you’re getting today is money you could’ve had months ago.

Wouldn’t it be better if you had that money back in July rather than getting it ten months later ? One would think most people would figure that out, but somehow everyone has bought into the IRS’s refund scam.

The bigger your refund, the bigger fool you are.

So remember. If you’re paying taxes this April, you’re doing good (and do it at the last minute, there’s no reason for the government to get your money any earlier than its supposed to). If you’re paying, you’ve just lost a sucker’s bet. Adjust your withholding, or pay estimated taxes, and keep your money in your own pocket.

13 Responses to “Getting A Tax Refund ? You’re A Sucker”

  1. I’d love to make the necessary changes to stop being a sucker, but I don’t know how. Instead of insulting everyone, tell us how to (legally) stick it to Uncle Sam.

  2. Shaun Kenney says:

    Of course, even if I take 99 exemptions, I still pay taxes. And I still get a refund every year.

    Sucks… but that’s the way the system works.

  3. Paul L. says:

    The interest-free loan is worth it to avoid the PITA of writing a check.
    Plus it makes me morally superior to most progressives who believe that tax rates are too low and should be raised as I am paying more than my “fair” share of taxes.

  4. jb says:

    I have some side work that leaves it to me to pay the taxes. Since I don’t know how much I’ll earn year to year, and I don’t want to risk getting stuck with a big tax bill in April, I have them withhold a bit more.

    So yes, I may be giving Uncle Sam an interest-free loan, but that’s far less painful to me than worrying all year about having a huge tax bill in April. It’s well worth the $15-$30 in interest they generate off of me.

    If it was a several hundred or a thousand dollars in interest I was walking away from, I’d reconsider my plan.

  5. Vast Variety says:

    I would rather get a refund than have to pay in. I don’t mind giving them an interest free loan if it means I don’t have to send them money in April when I’m likely not to have it to send in, especially since I have a rental property income along side of my full-time job.

  6. Matt says:

    The comments above make it pretty obvious why there is a withholding option to begin with. It is easy for people and it makes paying taxes much less painful, therefore much less unpopular. If everyone had to pay money quarterly or yearly I’d guess that more people would be pissed about paying income taxes and they would probably be lower because of that.

  7. ej says:


    if you want to hold more in your check claim an extra exemption on your W2… however make sure you dont claim too many… there are tax penalties if they wilhold less than 90 percent of what you owe. Depending on your deductions, you may be able to claim 2 extra exemptions. I claim one extra and only get a minimal refund each year (but i keep more money durring the year)

  8. [...] Doug Mataconis explains tax returns: Since it’s tax season again, it’s time for me to say it once again —tax refunds are for suckers. [...]

  9. Let's Be Free says:

    Let’s see, should I dynamically figure out my taxes to the penny or should I spend my time managing investmetns and building our home business to generate real financial returns? As much psychic income as there might be in not allowing the US Treasury a tax free loan I’ll happily spend my time more productively. Its about value not principle or playing the rules to the hilt. The less time I waste on the small and innocuous the better I can do on the large and important.

    Also, if you screw up and get yourself in a penalty situation that’s one more factor that can add points to the score which can trigger a audit. I don’t think anyone who has a solid payment cushion is foolish. Not at all.

  10. Scott says:

    According to H&R Block, I was penalized for doing my taxes in one lump sum this month, and not quarterly over the past year. Might be a Pennsylvania thing, I don’t know. But it was like $60 bucks penalty. Or the lady could have been scamming me for not filing quarterly “with them”. I wish they taught us how to do taxes in High School.

  11. ZZMike says:


    But if anybody knows how to calculate their withholdings for a $0 back, $0 owed return, I nominate them for the Nobel Prize in Economics. I’d even go so far as $10 either way.

    Maybe if people had to pony up the $9,000 (or more) in one fell swoop come April, we’d be more serious about who we elect.

    So let’s just keep on letting the suckers think they’re getting “money from the gummint”.

  12. Hank says:

    I was considering keeping my withholding lower than it should be until I found out it’s a crime. If your withholding changes and you don’t update it, penalties will happen, and if it’s blatant enough you can get a $500-1000 fine from the IRS and possible jail time.
    see Legal Consequences of W-4 Resistance

  13. Frank N says:

    While Doug is doing his taxes every week to be sure he isn’t paying too much, I’m having sex with my wife… Like a sucker ;)

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