Tuesday, April 14, 2015
Bad advice faded
Reading some of the Tax Day stuff on the web .... One bit of standard advice never made a lot of sense, but it became utterly meaningless after the Goldman Coup.
The old advice: Try to minimize your refund so you aren't lending your money to the government without interest. This was a constant part of all tax advice.
Even when interest existed, this was a bad idea for most people. If you aren't sure, it's vastly better to overpay first. If you try to hit the zero-refund point, you're also moving closer to the risk of penalties and audits.
Let's say you have a refund of $3000, which is apparently typical. Before the Goldman Coup, you could get annual interest of 3% on 'liquid' deposits. Assuming equal paychecks and equal taxes per month, you'd miss the chance to get about 49 dollars. Not worth the risk, and it doesn't counterbalance the simple pleasure of a refund.
Advice given to ordinary people has to factor in both pleasure and pain. Corporations and rich fuckheads can pay accountants to eliminate the human part, but they aren't reading this type of advice anyway.
This anti-refund advice persisted for several years after the Goldman Coup, but it's finally faded out now. Good sign of realism among the advisers.
Sidenote: The supposedly typical $3000 seems high from my perspective. My refunds have been in the range of $300 for as long as I can remember. My income has varied from well above median to near-zero in the last 30 years, but the refund always seems to converge on $300. So I would have gained $5, and risked jail, by trying to hit the zero point before the Coup. Whoopie.
¶ 4:07 AM 
