Settling Up with Uncle Sam
March 3rd, 2011
I met with our accountant last night to do our taxes. I feel all grown up when uttering the words “our accountant.” Granted, we only see him once a year for all of about two hours and only because I am intimidated by the very concept of tax preparation, but there you have it.
Thanks to a number of factors including the arrival of Buggie and the fact that I made less money last year than the year before (ah, the joys of unpaid maternity leave), we’ll be getting a nice refund. Even without those additional factors we usually get at least some amount of money refunded.
I know that “the financial experts” out there say you should try to avoid this. That you should manage your witholdings in such a way as to avoid letting Uncle Sam hang on to any more of your money than necessary. And I get that. I do. But I’m not gonna lie: I love getting a tax refund.
We’re decent savers, but it’s alarmingly easy for “extra” money in your paycheck to magically disappear without your even noticing it. A new book here. An extra coffee there, and *poof* it’s gone. Getting it all in a chunk at the end of the year increases the likelihood that we’ll do something good with it.
For example, this year, part of our tax refund is going to help us finance a trip to Alaska to visit some of our very best friends. We saved like mad last year and the refund puts us “over the top.” The rest (the majority) is going into our emergency fund, which had been depleted somewhat recently thanks to Josh’s car needing new tires.
To me, that’s a nice balance of practicality and extravagance. What do you do with your tax refund? Save or spend?