Tax Tip: Why Refunds May Be a Good Idea
(NEW YORK) — About four out of five tax payers will get a refund after they file their 2012 returns. And that payout is often big, according to Bob Meighan of Turbo Tax.
“The average refund last year — $2700 — which when you think about it is the biggest financial pay day of the year for most people,” Meighan says.
This pot of money can be put to good use.
“For many Americans this is perhaps the best savings mechanism for them because if they take their refund and apply it toward their take-home pay to get more take-home pay each pay period they’re more likely to spend it,” Meighan explains.
Tax preparer Janice Hayman agrees that for many people a big refund can be very helpful.
“If you know yourself and you know you’re not going to save that extra $50 every paycheck then why not have it over withheld,” she says.
The lump sum can be put to good use if you’re not saving enough without it.
“It really does depend on the personality,” Hayman says.
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