Yes, I’m Getting a Tax Refund (and 4 Reasons I Don’t Care)

Yes, I'm Getting a Tax Refund - picture of checkbook, money, and government refund check

This article may contain references to some of our advertising partners. Should you click on these links, we may be compensated. For more about our advertising policies, read our full disclosure statement here.

Brace yourselves; I have an announcement. Not surprisingly, I managed to completely fail at paying quarterly estimated taxes again. And just like last year, I paid in more than necessary and am set to get a sizable refund.

But just like last year, I don’t really care. It’s just another day in the life of an overachiever. {Relax, I’m being sarcastic} Not only am I a workaholic, but I tend to over-plan, overanalyze, and overprepare. That means that, when I think I owe X number of dollars, I just round that shit up.

Part of the reason I do this is because I don’t have a lot of free time to ponder these sorts of things, but the rest of my excuse is centered around the fact that we owed $1,200 at tax time once….and I hated it.

But…Isn’t Giving the Government a Tax-Free Loan Pretty Stupid?

I know what you’re thinking: a) I should just break out some snazzy software program that would tell me how much I owe, or b) I should just figure out how much I overpaid as a percentage and pay that much less in 2015, or c) I should be really, really mad at myself.

The thing is, our taxes have become insanely complicated. Not only do we have three separate businesses now, but we also have rental properties, different tax-advantaged investments to plan for, and a fluctuating income that is hard for most people to grasp.

4 Reasons I Don’t Mind Getting a Tax Refund

So, instead of freaking out because I gave the government an interest-free loan, I have resumed not caring. The only difference is, I plan to pay in around 10% less each quarter than I paid in 2014. That way, I should still get a refund, though it won’t be quite as big. Here are four reasons I can still live with myself:

My Savings Earn Practically Nothing

Most of my extra dough sits in my business account until I stash it away in retirement accounts and various investments. And even though I have this super-duper special high interest savings account, it still only earns around 1%. Even if I were getting a $5,000 tax refund, I would have only earned an extra $50 had I let that money sit in my account all year long. That’s pretty sad, and quite frankly barely worth my time to pursue.

I Am a Rockstar at Saving for Retirement

Of course, $50 is still $50, right? And if I weren’t saving so heavily for retirement and my kid’s college, it might mean a world of difference. However, I maxed out my SEP IRA and Roth IRA last year, along with putting some cash in other boring things like index funds. Earning an extra $50 wouldn’t have done much for me.

I’m Not Going to Blow It

Part of the problem with tax refunds is that people get this idea that they are “free money.” It’s as if they think tax time is one giant birthday party where we all get points we can trade in for a flat screen TV, hot tub, or weekend getaway to Cancun. Oh, how I wish. Unfortunately, that isn’t the case, and I’m well aware that I’m just getting my own stupid money back in the first place. Sadly, since my next quarterly tax payment is due April 15th, I will basically just send my refund back in a few short weeks.  Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee….

I Have Other Things to Feel Guilty About

I was talking with a friend about our tax refunds the other day when she asked, “Don’t you feel guilty?” “Guilty for what?” I asked. Then she launched into a whole thing about giving our greedy government a tax-free loan and all that. Let me answer that real quick. Of course I don’t feel guilty. After all, I have real things to feel guilty about, like the fact that I live in the richest country in the world and was born to fairly affluent parents who truly had my best interest in mind. Or the fact that I can walk into a grocery store any buy any type of food I want while other people die because they don’t have access to food or water elsewhere on the globe. Do I feel guilty for getting a tax refund? No. Let me rephrase that. Hell no.

Getting a Tax Refund Isn’t the End of the World

Getting a tax refund isn’t ideal, but it certainly isn’t the end of the world either. I know people who have trouble saving so they treat their tax refund as their savings account for the entire year, and that’s okay. If it is truly the only way you can save, then it’s certainly better than nothing. The key is, what will you do with it? Are you saving to build an emergency fund, or will you run out and buy the next entertainment center, smartphone, or four-wheeler you see?

Where you are at financially also makes a difference. For example, if you are carrying high interest debt or barely meeting your monthly obligations, you should try to keep your refund as small as possible. When you’re in debt, the extra money you get back at the end of the year would be much better off going towards debt repayment. So keep that in mind going forward. And as always, make sure every decision you make is an informed one.

Are you okay with getting a tax refund? How much are you getting back this year? What do you plan to do with it?

Additional reading:

Similar Posts

Disclaimer: Comments, responses, and other user-generated content is not provided or commissioned by this site or our advertisers. Responses have not been reviewed, approved or otherwise endorsed by this website or our advertisers. It is not the responsibility of our advertisers or this website to ensure that all comments and/or questions are answered. Club Thrifty has partnered with CardRatings for our coverage of credit card products. Club Thrifty and CardRatings may receive a commission from card issuers.

79 Comments

  1. Ha ha ha… Love the attitude. I’d much rather get a refund than a tax bill. If you have multiple investments it’s impossible to be precise with your tax. No one can forecast the return on their investments to that degree. You’d have to do a deal with the devil for that kind of prescience! So, I always err on the side of caution. That being said, I also don’t over pay too much – I just round that shit up, too.

    Apologise to no-one! 🙂

  2. I’ve never understood the whole animosity towards paying too much into your taxes and receiving a refund at the end of the year. Though I’ve had to pay-in the last few years, even when I did get a refund check, it’s not like it was enough to really do anything with in terms of investing.

    1. Yes, exactly. I think most of the animosity goes toward people who don’t pay very much in but get huge refunds.

    1. I pay in around 30%. Theoretically, that should be about right. However, we made some year-end tax moves which decreased our tax bill by quite a bit.

  3. Great list. In this practically zero interest rate environment, there really isn’t much difference in giving the feds an interest free loan, versus getting basically nothing from the bank. I guess the only fear would be a situation where the feds freak out and decide not to give people their refunds, but we would be in a really bad place if that were to happen and have other things to worry about.

    1. Can you imagine? People would probably overthrow the government if that happened!

  4. I’m usually pretty okay with getting a tax refund. The interest-free loan thing isn’t my favorite, but then I do get a nice lump sum near the beginning of the year! This year I got between 3-4K which I just dumped into the house fund.

  5. I wish we were getting a refund back, lol. We ended up owing a little under $2,000 and getting about $100 back from our state. The silver lining is that we’re able to put about another $3,000 total in our SEPs to get them maxed out – so I won’t complain about that. I used to not like getting a refund but, at the end of the day, if you’re managing it wisely then that’s the important thing in my opinion.

    1. I think I could probably live with it if we owed money now. We didn’t make very much the year we owed $1,200, so it was quite dehumanizing! Now it wouldn’t be as big of a deal.

  6. In my perfect world my wife and I would be within $1,500 of what we owe for taxes. It’s much easier to be close to the pin if you don’t have freelance/small biz income, as we learned the hard way the the past two years. Because we paid in much more last year than we felt comfortable with ($7k) we were very adamant about tax planning this year. We are doing our taxes next Saturday and I’d be pretty surprised if we were off by more than $1,500 either direction. It would be great to get a refund, though I don’ t really care either way. If we get one it will be so small that the incremental investment/savings interest income we missed out on is essentially irrelevant.

    1. Yep! That’s how I feel. It’s pretty pointless either way.

  7. We try our best not to get back too big a refund but sometimes you really can’t do anything else to keep that from happening. My concern is more the government itself. I mean couldn’t you just see the government saying “Eh…no refunds this year” for whatever reason. Sounds like a conspiracy theory I know but in light of “executive actions” (not mentioning any names) and lack of push back (again not mentioning any names) it’s not as far fetched as you think.

    1. I don’t see the government doing that BUT you just never know.

  8. Ha, I’m totally with you 🙂 I understand the logic, and assuming it doesn’t get thrown aside for crap (aka free money), then it really doesn’t make much of a difference!

  9. We got a pretty large refund back this year. It was the first time that had happened, and I kind of felt like we won the lottery…except the part where we applied it all to our mortgage instead of blowing it on a big screen TV. 😉

  10. I’m not quite sure yet, but it sounds like we are going to be getting a refund again this year. Like you, our tax situationis really complicated since we have a few LLCs and two rental properties. We could try to do a better job at figuring out about how much we are going to owe in taxes, but it would take an enormous amount of time to educate ourselves on all those tax intricacies and figure it out. Last year we got a big refund and it was actually enough to fully fund both of our Roth IRAs for the year. This year’s tax refund, if we get one, will be going to the same place. I don’t feel the tiniest bit bad about it!

  11. We got a refund this year and we did a 50/50 split between savings and debt repayment. I’d much rather get a refund than have to pay!

  12. I don’t like giving the government my money, but a refund is much better than a bill. I can never quite get the numbers to come out right. This was the first year with the solo 401k and I messed up payroll and had to pay more FICA but will get a refund on income tax. Why they can’t just shift it over is beyond me, but that’s how the system works, I guess. I’m just applying it toward the next estimate as well.

    1. Party on, Kim! I wish they could shift it over too. We have paid in to state and gotten a refund from federal before.

  13. I’m with you, our taxes have become incredibly complicated and I think it’s near impossible to accurately calculate your taxes all year long. We had a big tax bill a few years ago and after experiencing that pain, I would much rather overpay than underpay where taxes are concerned.

  14. I got a refund this year (I tend to get one every year) and I was perfectly happy to get that money deposited into my account. Since I know some of my spending shenanigans who knows what I would have done with it if I had it throughout the year? Just joking! I just think people get way too worked up about this. I have bigger problems to worry about than getting a tax refund (which is always better than owing!) Enjoy your money.

  15. I so agree with your attitude on tax refunds Holly!

    We got a small refund this year (only because my work was drastically cut last year with Little Miss being born, otherwise we would have definitely owed), which was nice but at the same time didn’t feel like we won the lottery by any means. We know we aren’t going to do anything crazy/fun with it….it actually went straight into savings for us. So while that was slightly exciting, it was nothing to get all hyped up about.

  16. I love getting money back (unfortunately we are paying this year) and I love blowing it. We usually try to keep it low, like $500-$1000 dollars and I use it for house projects. Because it’s spring when it comes we often buy mulch, new landscaping or other outdoor projects we have going on.

  17. I’d rather get a small refund than have to owe – I’ve been in both worlds. In a perfect world, I’d break exactly even at tax time – and you know what? Taxes shouldn’t be so freaking complicated that such a goal shouldn’t be difficult to achieve. It just shouldn’t (psst, hey good for nothing government, you listening?)!!!!

    1. You are so right- it shouldn’t be so complicated! Geez! Reading some of the tax forms is enough to make my head explode!

  18. Uh yes, I am more than OK with it. 🙂 I still don’t know how this year is going to pan out. I had my tax appt, but still waiting for the results. I have a knot in my stomach.

  19. Since hubby hates saving I have always used our large tax refund for property taxes and pay off bills. Having 4 kids and making less than $50g makes for a huge refund. But kids grow up, move out, mom gets sweet raise at part time job…this year will be interesting and different. Love refund but now I need to maximize tax deductions and get used to paying property tax monthly. I plan to use our much smaller refund next year to into IRA.

  20. I was certain I’d have to pay in, but I just found out I’m getting a small refund! Yahoo! Now I can put the money I had saved up for 2014 taxes toward something else. (But don’t worry, I’m still saving a good chunk of my 2015 freelance income in case I have to pay in when I do my taxes next year.)

  21. I’m not sure if I will be getting anything back. I still have to do my taxes!

  22. I’m pretty sure I will get a refund this year, but I no longer see it as free money and I loved how you mentioned that it’s not the end of the world. I know I won’t always get a refund in the future. I wasn’t working for myself last year so my taxes were extremely easy to do this time around, but now that I’m freelancing part time a lot is going to change.

  23. I’m in the same boat. We always prefer to overpay rather than underpay, so we usually get a refund. This year was no different and we funneled our refund right back into our savings and investments. It honestly doesn’t really bother me at all either. I agree with you–there are plenty of other things to worry about!

    1. Definitely. If I ever come up with an extra 12 hours some day, I will figure out how to pay closer to what I really owe.

  24. Generally, I prefer people not getting massive tax refunds, largely because these are the same people who complain about a lack of funds during the year. I definitely feel differently when it’s someone like yourself, whose financial situation is more complicated and it can be really hard to make 100% accurate quarterly tax estimates. Salaried people with one W-2 don’t have quite the same argument but it is a personal choice. What matters most to me is what people do with that refund. Like you said, it’s not free money and I cringe when people use it as such or worse – create more debt with it. I’ll take my $3000 refund and use for a $5000 vacation. Ugh.

    1. Ha! Yes – THAT. Or I’ll take my $3,000 tax refund and put it down on a $20,000 truck. Weeeeeeeeeeeeeeeeeeeeeeeeeeee

  25. I managed to really overestimate. We’re getting around $930 back which may be a record. Part of it is that I can’t easily predict expenses. So last year, I barely tried. I calculated the cost of my Internet as an office expense and that was about it. FinCon (including travel and hotel) weren’t part of the equation. As for the rest… I have no idea.

    Like you said, we have other things to worry/feel guilty about. I definitely don’t mind a *little* padding, but I think I’ll try to keep the refund smaller next time. So this year I put in projected expenses for FinCon, average monthly expense checks I write myself, etc. Hopefully, we’ll be a little closer to the right number next year.

  26. It’s always nice to get a chunk of cash. The main reason I dislike refunds is because it just reminds me of how inefficient the government is with our tax dollars.

    1. Yes, I agree with you. But they are inefficient whether we overpay or owe money at tax time.

  27. We owe for federal, but we are getting almost the same amount (minus a hundred dollars) back from state so I would have to say that it is a wash.

    1. Yes! Well, it sounds like you did way better than I did!

    1. NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO~
      I’m sorry.

  28. Unfortunately, we owe the government a few thousand dollars this year. It is actually better than I thought. Hopefully, the remedies we have taken will eliminate this stuff in the future. I wouldn’t mind a refund at this point.

    1. Ideally, I would like to break even and owe/receive less than $100. Of course, that is far easier said than done!

  29. I used to be a pretty bad saver. I use my refund to pay my property taxes. I have never bought into the whole free loan to the government BS. It works for me and that is all that counts. It still sucked to give up just about every last penny, but it felt good not to have to hit up savings to cover the taxes. To each their own.

    1. Yep, definitely! I am basically using our tax refund to pay some of my quarterly tax bill.

  30. Yes, i think of it in a positive way always. Like an unintended savings or a bonus.

  31. Sounds perfectly reasonable to me! I think the trouble is when people who are not really aware of their financial situation end up with large refunds that should have gone to paying down debt or increasing retirement savings during the year, and then even worse sometimes those refunds get blown on frivolous things. As for me, this year I’ve ended up with a small refund which goes right back into replenishing my emergency fund.

  32. Love the attitude. Many people get caught up with money over everything and completely discount both the time cost and emotional cost of stressing over every detail of every situation.

    Personally, I\’m used to receiving a high 4 figure refund despite massive exemptions, mainly due to high property tax and mortgage interest deductions. Now that we\’re married filing jointly it\’s the complete reverse. No exemptions but still end up owing several thousand each year.

    My saving grace? Since my tax payments during the year are more than the previous year\’s payment, I don\’t owe any penalty for underpayment. Assuming your income is growing, one way to reduce the likelihood of a refund is to only pay the same as your previous year tax payment for your estimated taxes. You likely end up owing more come April but it\’s a simple way to avoid a refund and a penalty.

  33. I started freelancing last year so I’m actually expect to owe taxes this year. I suppose this is a good problem since I ended up earning extra income.

  34. Well, I don’t like getting a refund just because I use my money to invest throughout the year. That being said, when your taxes are complicated like yours and mine, I would rather be on the refund side than what side I’m on. I won’t even mention how much I have to pay. It’s a good problem is you think about it, but still stings the budget a bit. My true feelings about those who get big refunds on a regular basis is they are doing it wrong. Most of those same people go out and blow their money right when they get it.

  35. I agree 1000%… much better to get a refund than to owe (we’ve been there, done that, and it was NOT pretty)! We donate to our church & the kids’ schools, and also still have student loan interest we can claim, so we usually have a sizeable refund, but that doesn’t really bother us. As a previous poster noted, it is much easier to say “no” once a year than 12x a year.

    We usually use the refund to pay other taxes owed (local quarterly taxes & state taxes), and often put the rest toward a major home project/repair. The list currently includes: replacing the roof & gutters, which are 30+ years old; or repairing/replacing our sinking patio, front steps & sidewalks (which are original to the house & 70 years old).

  36. I got a tax refund this year that was pretty sizeable too. I’m actually not a tax refund hater like a lot of PF folks. I just put it in savings or pay debt or do something responsible anyway. Love your reasonings!

    ps – first time I’ve been by the site in a while and I love the updates! Looks really good!!! 🙂

  37. Because I´m in sales, commissions are taxed as “luxury income” (yeah right), and so I get a pretty hefty refund each year. I put it all right back into savings or debt repayment. Gone are the days of using it to splurge!

  38. While I try to break even, I’d rather get some money back than owe money! Everyone’s situation is different and it’s tough to figure out how to break even. I just use the money for whatever my current personal finance goal is at the time and then it feels great to have made progress!

  39. Taxes are so frustrating! Especially when you have complicated tax situations, self employed etc. Our taxes are also complicated. I love how you have just changed your attitude about taxes. A reminder we all need!

  40. Getting a tax refund is cool. Various types of Taxes cut from your salary at current time. After tax filing, your accountant needs to know about it and get it refunded. Very Good Feeling to know about your attitude towards Taxes.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.