Today is tax day…or it would be if the IRS offices were open; they aren’t. And I read that the average tax refund is close to $2,500. That’s an amount that would equal a savings plan to put aside $200 a month, and how many people do that? Some congressman; I don’t remember the name, has proposed that tax refunds be automatically assigned to a 401(k) account if the taxpayer wishes. Sounds smart.
Back in the day, when I was a major tax payer…I would manipulate my deductions to generate a larger tax refund. That money was then used for a variety of purposes, including more than a few “luxury” items. I knew at the time how dumb it was to let the government hold that money for me; after all, they paid me no interest. But I also knew that I wouldn’t (or couldn’t) save the money, so the refund became my no-interest savings account that I plundered once a year. I can only imagine how much I might have now if I had put that refund aside each year.
The congressman’s proposal seems to make sense…so it’s bound to be dropped.
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