Monday, 9 February 2009 08:13
by
Chris
According to Forbes.com the average federal tax refund this year is $2,371. It is exciting to receive your W-2 each year, complete you tax return and see how large the refund will be each year. Many individuals intentionally pay in the maximum amount of taxes each year, for the sole purpose of ensuring they will receive a large tax refund.
If you think about it though, that is just giving Uncle Sam an interest free loan for a year. You send your money to the US Treasury throughout the year, they hold on to it and use it all year long, then give it back to you without interest. For me, the better option is to adjust your withholding amount and set up a systematic savings plan where you will actually earn interest throughout the year. That way you will have access to your money at anytime during the year, and you will actually earn interest on those funds as well. FORUM has several savings options for you such as the Weekly 5 or CommonCents accounts. Both of these accounts will allow you to setup an automatic transfer on a monthly basis from your checking account. The Weekly 5 will allow you to direct a portion of your Direct Deposit, directly into the account each payday. That way instead of taking extra out from your paycheck and sending to the US Treasury, you will be sending it directly into your savings account, paying you interest and giving you the control. See your employer to adjust your withholding amount(W-4), then stop in any FORUM branch to start your savings plan.