the government borrows our money for a year?

Question

when we get our income taxes back why dont they have to pay interest on it....after all they are borrowing your money?

Answer 1

Technically they aren't borrowing it -- we're letting them have it. You choose how much money is withheld from your pay check when you fill out your W-4. If you don't want to give the government an interest-free loan then claim as many dependents as you can and get as much money back as possible every time you get paid. You may end up owing the IRS at the end of the year, but at least you didn't give Uncle Sam an interest-free loan.

Answer 2

You control how much money is taken out of your paycheck for income taxes. In fact, you don't even have to have anything taken out. Just claim 13 exemptions on your W-4. Of course, this does not get you off the hook. You will need to pay quarterly. If you don't, and you owe too much (over $500 I believe), you will need to pay penalties and interest.

In a nutshell, the government determines how much you owe and you determine how you will pay it.

Answer 3

That is not right. You can eliminate that by declaring more dependents and paying a little at tax time. Most people would spend the money though and not have anything left for the tax man.

Answer 4

So you're saying people that owe money at the end of the year should have to pay interest as well?

Let's call it a wash.

If you're really worried about interest, we pay somewhere around $400 billion of interest on the debt each year. Maybe we should work on that.

Answer 5

When you have to pay in at a tax time, you are just repaying the interest free loan. Just like when you get a tax refund, the Gov is paying a interest free loan.

Answer 6

I claim married with 9 dependents to have as little money taken in withholding as possible. Then I wait till April 15th to pay my taxes. BUT you have to save the money to pay the taxes.

Good Luck

Answer 7

Great question. They should pay interest.