Bird in Hand – Tax Refund 2007?
Each year, my goal is to obtain a tax refund in the neighborhood of $500. Any more, I am giving Uncle Sam an interest free loan. Any less, I risk having an unhappy surprise.
Through trial and error, I have figured out the correct number of exemptions for a normal year. This year, I changed jobs and “took” some deferred income from my prior employer. As a result, I know I am going to get a huge refund.
With a wedding to plan and pay for, I have been trying to figure out exactly how much it will be. Using the tax estimator on TaxCut.com and other sites, the estimate varies by up to 3 thousand dollars. Since this year’s version of TaxCut is not available, I used last year’s version and got the largest estimate yet.
Despite the good news, I learned the hard way a bird in hand is worth two in the bush when it comes to taxes. A few years ago, I expected a refund of $2,000 and spent it. Much to my horror, I discovered an error in the returned and ended up paying $1,000. A $3,000 swing to the negative is not good.
As for this year, I will keep the refund in mind; but, I will not “spend” it until it is my ING Direct account earning interest.
If it comes in as expected, I am planning on paying down the balance of my non-subsidized student loan.