Sherri Gastelum the CEO of Platinum Tax Defenders Gives 5 Tips on Why Overly Large Refunds May Not Be Good For Taxpayers
Sherri Gastelum: Obtaining a large refund isn’t necessarily a good thing, according to a US News article. Platinum Tax Defenders gives 5 tips to taxpayers on why large refunds may not be ideal.
Los Angeles, California (PRWEB) April 27, 2013
Big refunds may seem like the ideal goal for April 15th, but a recent article on US News say it may not be best for taxpayer interests. On March 22, 2013, US News ran a report quoting experts, as to why the average American refund may be too big: “Tax Season Math: Debt + Refund = Mistake”. Platinum Tax Defenders encourages taxpayers to review their last three years of tax returns along with other tips, and suggests that taxpayers overwhelmed with the responsibility of preparation may want to contact a tax resolution firm for help.
One of the main reasons for overly large refunds, given by US News, comes down to fear. Fear of having to owe at the end of the year causes people to have too much in taxes set aside. Conversely, says Platinum Tax Defenders, fear also makes people avoid taxes. This leads to tax procrastination, so that they tend to miss out on available credits or even bigger refunds.
Second, fear can lead to a backlog of back taxes. This may seem to be non-related, since back taxes cost more in interest and penalties than are ever incurred even when a balance is due on current year taxes. However, said Danielle Kurtzleben of US News, a tax refund means that too much money has been given in an “interest-free loans to the federal government”. If taxpayers had access to those necessary funds during the year, the money could have been used for investments, which would create interest or dividends rather than costing interest.
Third, a $2,800 refund means that taxpayers are often spending too much on taxes and not enough on paying down debt, which is what most refunds go toward. On average, Americans received $2,800 back from their taxes, and around 80% indicated that this money was already earmarked for either credit card debt or savings — 40% to each. (According to a CNN Money survey from 2011, “How Do Americans Spend Their Tax Refunds?”, Americans plan on spending their refund more than three times as much on debt as on either vacations or major purchases. ) This means that taxpayers paid higher interest rates on debt all year, or didn’t have access to necessary funds so that debt wouldn’t have had to be incurred.
Fourth, the CNN Money survey showed a seeming lack of self-trust in the taxpayer to save up or pay down debt during the year. 25% of Americans have a credit card debt that outweighs both savings and emergency funds, according to a quoted Bankrate survey (“February 2013 Financial Security Index Charts”). Those making $30,000 had more debt than savings in just under 60% of those surveyed, while over 30% of those making $75,000 annually were in the same situation.
Fifth, almost 30% of refund allocation was marked out for “everyday expenses”. This means that, with proper planning, bills could have been paid on time or without extra stress. Platinum Tax Defenders says that taxpayers who need help in tax planning or with tax relief services can save themselves both time and effort during the next tax season. It would be a shame to go through the pain of tax season only to realize later that the refund could have been larger, or that more money could have been available for paying necessary bills. In some cases, since the IRS gives credits for real estate improvements and energy-efficient installations, houses and properties could have been made more comfortable or even sold faster.
Platinum Tax Defenders helps taxpayers to determine how to deal with the IRS, especially with back taxes or in crafting payment plans for large tax bills. The free consultations with skilled team members range from 30 to 45 minutes long. The team includes a CPA, a tax attorney, and a former IRS agent — all qualified professionals.
For more information on Platinum Tax Defenders and to get help from Sherri Gastelum or their other tax experts, call 1-877-668-1807 or send an email to email@example.com.
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