Copyright 2006 Steve Hoven
Tax time is just around the corner. Are you getting a big refund
this year? Well if you are, you are THROWING AWAY BIG MONEY!
CHANGE YOUR EXEMPTIONS ON YOUR W-4.
This is not the number of your dependents but the number of your
exemptions!
If you are getting a BIG tax refund every year, you may love
getting that check; however, you are actually giving the
Government your money interest- free for a year. This is not a
wise use of money .
The IRS stated, back in 2004, that the Average tax refund check
was almost $2,300!!! That is almost $200 per month ($200 X 12
Months) that is given to the IRS INTEREST FREE!!! If you are
getting a tax refund check of more than $300, you need to
consider changing your exemptions. Feel free to send me any of
your extra money. I will keep it for you until next year and NOT
pay you any interest.
For example, if you got a $600 Tax refund last year (or plan on
getting one this year), that is $50 a month extra in taxes that
you paid last year. You earned no interest on it. If you want
to, you can send me that $50 and I will keep it for you and a
year from now send you the $50 back. That $50 could save you
$100's of dollars in interest NOT paid if you applied it to your
Mortgage.
Consider a person who has a 30 year mortgage on a $150,000
mortgage x 6%. If he or she made just 1 extra payment of $300,
they would save over $1,400 in interest! Talk about return on
their money!! That $300 could easily be paid by saving $50 a
month for 6 months. $300 payments vs. $1,400 OF NOT HAVING TO
PAY IN FUTURE INTEREST. THAT IS OVER 460% RETURN ON YOUR
MONEY!!! It is hard to find a better return than that.
Change your Exemptions at your job. Exemptions and Dependents
are NOT THE SAME THING! The same person who is getting a $600
tax refund is earning No interest from the Government. However,
he or she could save $2-3,000 in interest on that same money!!
This is how the middle class person gets AHEAD by USING HIS/HER
MONEY CORRECTLY.
Try and make it so your tax refund is not more than a couple
hundred dollars at the most.
About the author:
Steve Hoven, has many years of experience in personal finance.
He has started a Newsletter on finance and is offering the 1st
issue FREE. Check it out at
http://www.biz4christians.com
