3 Reasons To NOT Be Excited About Your Tax Refund

3.3.10

This time of year always sickens me. It is tax season. Sure, I am sickened by the amount of taxes I have to pay, but I am even more sickened by the attitude of folks when they receive their returns.

I get it. I do. It is fun to get a few hundred dollars in the mail. You can’t argue against that. But there are a lot of other things you CAN argue against. Today we are going to look at 3 reasons why you shouldn’t be excited about getting your tax return.

It is YOUR money! – It is not a gift. It is a return. It is your money! After months of the worst type of financial captivity, your money is returned to you. [Enter Point #2]
It is NOT accompanied by interest! - Why is this type of financial captivity is so bad? Because it doesn’t pay interest. In effect, it is the worst savings plan ever. What is the purpose of a savings account if they don’t pay you for the use of YOUR money?! The opportunity cost of putting that money in a moneymarket account equates to $100′s of dollars. That is $100′s that you miss out on.
YOU had to pay the costs associated with reclaiming your money! – Not only is your money tied up in an interest-free account, but you pay the fees associated with reclaiming it. You must perform the paperwork, hire the accountant, and have the money fight with your spouse. You! You lose out on $100′s in interest and then spend $100′s to ask for your money back.

As of 2006, the tax preparation industry in America had revenues of over $65 BILLION dollars. That is money that goes to tax professionals for the services they provide. I am certainly not mad at tax professionals, but I am a thinker. And something seems very obvious here. If we reformed our tax system to eliminate some of the red tape, we could save BUTT-LOADS of cash.

Before you get all jazzed about your tax refund, take a moment and ponder the ‘what-if’s’. What if you had kept your money all along? What if it had hundreds of dollars in interest with it? What if you hadn’t paid hundreds in accounting fees?

Doesn’t that sound nice?