If you expect a tax refund this year, that means you gave an interest-free loan to the U.S. government last year. Unless you intend to be so generous, you should ask your employer to reduce the amount withheld from your paycheck by filing a new W-4 Form with additional allowances.
USA Today reports on Americans paying too much too early, and what it costs us:
Americans are enjoying their biggest tax refunds ever — and it’s costing them billions of dollars.
Taxpayers overpaid their federal income taxes by a record 29% in both and , according to a USA Today analysis of Internal Revenue Service data.
That has pushed refunds above $200 billion a year. Final figures aren’t in for , but the average refund so far is $2,423, up 4% from last year.…
The extra withholding gives the government an interest-free loan worth more than $10 billion a year, equal to about $100 per tax return.
“The deficit is a little smaller because of this voluntary tax,” says Leonard Burman, co-director of the Tax Policy Center in Washington.
You don’t need to help them take your money. As the Wall Street Journal enthuses, federal tax revenue is coming in hand-over-fist so far this year:
In , overall revenue continued to surge, growing at an overall rate of 10.3%, or an $81 billion increase from the year ago period, to $871 billion. That builds on the astonishing 15%, or $274 billion, revenue increase for , which various fiscal wisemen assured us would fall off dramatically. Apparently not.
’s double-digit increase is roughly triple the rate of inflation, reflecting strong gains in business profits and individual wages and bonuses — both signs of a vibrant underlying economy. Corporate income taxes are up 30% , while individual income tax payments have climbed by 10.3% .…
If you’re wondering why the alleged fiscal conservatives at the Journal are crowing about the magnificent swelling of the government coffers, well, it makes for another good occasion to call for cuts in capital gains taxes, doesn’t it?