What To Do If You Think You Are Due A Tax Refund This Year

The federal government has been doing some amazing things the last few years in an effort to get the economy up and running again. Whether they’ve worked is a political hot potato that I am not even going to remotely touch in this article. What I am going to touch is what you should do if you think you have a refund coming your way this year.



Let’s consider a simple scenario. You don’t know me at all. What if I asked you for a loan of say $2,500 for a year. I’m a good bet, so you aren’t worried about me repaying you. You know I am good for it. Would you give me the loan? Being a decent person, you probably would. Still, you would be losing money since you couldn’t use that $2,500. Traditionally, you would ask me to give you some interest on the loan for the right to use the money. This makes sense and I would undoubtedly agree.



Now consider a simple question. What is a tax refund? Focus on the word "refund". It means that you’ve overpaid the taxes you owe the federal government. In essence, you have provided Congress with an interest free loan. Given their shoddy spending habits, does that really sound like a good idea? Probably not.



So, what should you do if you are expecting a tax refund this year? Don’t wait for April 15th to roll around. File for your refund early. The IRS allows you to file in the middle of January, but most people have to wait till early February for their W-2 and/or 1099 information to roll through the door. Still, this is much earlier than April. If you file in February, you can also expect to get the actual refund in your hot little hands very quickly since the IRS isn’t all that busy yet given the fact most taxpayers wait to file until April.



There is little reason to give the federal government an interest-free loan with your tax payments. File early and you can get your money back much quicker than waiting for April to roll around.



Richard A. Chapo writes for BusinessTaxRecovery.com where you can get help with a IRS bank levy problem.