This tax season the IRS had issued more refunds than in previous year, with an average amount of $2, 792. Like previous years, some returns contain errors which means refunds are being suspended. This makes some taxpayers who are waiting for their refund angry, which leads to the question are tax refunds really a good thing?
Here are some arguments for and against tax refunds . . .
Pros of Tax Refunds
- Ease of Modern Times – Today it is easier than ever before to file your taxes and receive your refund. Electronic filing and direct deposit returns have made the process of tax returns pretty seamless for the IRS, and have the added benefit of convenience for taxpayers.
- Great for Those Who Struggle to Save – Life is unpredictable. What you may be able to afford today, may not be something you can pay for tomorrow. Furthermore, taxpayers who may have a hard time saving, may not trust themselves to set aside enough money to pay Uncle Sam during tax season. Tax withholding from your income is great for those who are worried they will not be able to afford taxes.
Cons of Tax Refunds
- Interest-Free May Not Be In Your Favor – The IRS has used your money as an interest-free loan all year long. Additionally, you were not able to earn interest on this money.
- Cannot Use Your Own Refund- You were unable to spend the refund, your money, from prior years. In addition to saving, you could have used your money on paying bills, buying a house, education, or travel.
- The Ball Is Not In Your Court – The worst part is you are defenseless against the IRS. This makes you susceptible to the whims of Congress and potentially the risks of the U.S. national debt.
An important aspect of taxes is to know your own spending and saving habits. Knowing this will help you have a better handle on your money and tax management practices.
Where Is My Refund If you have questions about your refund it is best to contact the IRS or use a tool to track your refund, such as Where’s My Refund. Another useful tool is the IRS2Go mobile app available for Android and iPhone. You can also reach the IRS by calling the toll-free number, (800) 829-1954 to find out the status of your refund or to get answers to any questions you might have.
Ask the Experts Tax debt is a serious problem for many Americans. IRS debt often takes many taxpayers by surprise. If you or someone you know owes the IRS money, it is best to reach out to a professional tax resolution attorney. The lawyers at U.S. Tax Shield are well versed in tax debt laws and can help your find a tax-payment plan that works best for you. Contact us today to learn more about the many options we have to help you clear your debt with the IRS.