Would you rather have a large or small tax refund or even owe money?

Question

Before answering this question think about this. A large tax refund means that too much money is being taken out of your pay. Wouldn't it be smarter to change your withholding so you get the money with each pay check rather than the following year after filing taxes. I would even say that it is better to owe as much as possible, without reaching the penalty point. That way you would be able to save the money, earn interest which you keep, and then pay the principal next year to the IRS. That is my opinion. This is a survey to see what you think. The best argument either way will get the "best answer".

Answer 1

I agree with your opinion and reasoning. Very sound advice, especially for those who think getting a big refund is great.

Answer 2

This is how I do it. I have 2 children and barely make 12,000 a year working part time. I claim 4 depentdents so they don't take out as much throught the year from my paychecks, because I need as much as i can get through the year. This year only 17 dollars was held out on my fed. taxes. Now when I did my taxes last week I claimed held of household and with two children i filed for earned income credit bringing back 4500.00. Wich to me is a huge refund. So I have it both ways. Get as much as possible in my check throught the year and bring back a big refund. But everyones situation is different. If you have no dependents then you will not get as big as a refund.
I see you point for people who can not claim EIC.

Answer 3

Id rather come as close to even as possible. I'd actually prefer to owe a bit, but not enough to trigger any penalties. That way I've had the use of my own money through the year.

Answer 4

Do you want to give the government an interest free loan of YOUR money? I prefer a small refund.

Answer 5

I try to break even.

This year I messed up and it looks like will actually get a couple of hundred bucks back.

I have severely punished myself and it will never happen again.