5 Reasons You Do Not Want a State Tax RefundPublished:
Instead of worrying about how much you’re going to get from your state tax office this tax season, you should be worried if you actually want one! In fact, there are many reasons why you do not want a state tax refund.
1. You May Not Get One Anyway
In years past, although taxpayers calculated their tax refund status, certain states weren’t able to pay them. This was because of the economy. Some states were having monetary issues and simply could not pay out money from any tax refund status.
If you’re concerned about your tax refund check, keep in mind that you may not get one anyway! Though the economy is getting better, the chance still exists the money from your tax refund status might just not be there when you need it. Try to withhold just enough from your earnings to cover your state tax expenses, so you don’t have to worry about your refund status in April.
2. You Overspend
One of the biggest problems about getting a big check from you state tax office is the opportunity to blow it. Often, the best thing to do with the windfall from your tax refund status is to put it in a savings account or use it to pay off debt. Unfortunately, what the majority of us do is spend it on the fun stuff we want. All of a sudden, your refund is long gone and you’re stuck waiting for next year.
3. Too Much Debt
A large amount of debt can also affect what money you get from your refund status. If the debt is large enough, you might never see any of your refund. Collection agencies can grab the money from your refund status for bills like student loans or alimony.
Of course the best way to avoid this is to pay your debts on time! If this isn’t an option, there is no reason to get a state tax refund. The state tax office will hand over the money from your tax refund status to whichever agency is asking for it.
4. You Were Sued
Not all collection agencies can take the money from your tax refund status. Some of these companies, like credit card companies, will simply sue you in court. During the settlement, they may request that you pay them with the money from your refund status.
Again, in this case the only reason to get a state tax refund is to pay back your debts. Which may be a good thing, but if you had the money throughout the year, you may have had an easier time paying bills. Don’t just rely on the money from your tax refund status.
5. You Withheld Enough
Congratulations! You don’t owe anything on your taxes and you aren’t owed anything from the state tax office. Your refund status says you’re totally even. This may not seem like a cause for celebration, but actually breaking totally even is the best way to go.
Why? Because that means you calculated your tax withholding correctly. Technically, owing taxes or getting money on your refund status means you didn’t withhold enough taxes or held back too much. Getting it just right means you’ll have more money through the rest of the year and won’t rely on the money from your tax refund status so much during tax season.