Monday is Tax Day and while you might think getting a big return is worth bragging about, a greater New Orleans, CPA said it really isn’t. Catherine Roe with Cowart Roe said it means the government has been holding onto your money for the last year when it could have already been in your pocket.
“So, a lot of people expect that they get this big bonus check when they do their tax return and that it’s something special that they are getting, but the reality is you’re not getting anything special, you’re getting your money back,” said Roe.
Ideally, Roe said, you want to break even on your taxes, so you don’t owe any more and aren’t receiving money back that you’ve loaned the government for the last year.
“If you’re underpaying, then you have a risk of having penalties and interests. But if you just barely overpay then you have just put enough into the system to cover your taxes,” said Roe.
If you’re self-employed Roe said to talk to your accountant to see if you need to change your estimated taxes and if you work for a company talk to your human resources department about adjusting what’s taken out of your check on your W-9.
“It’s a good idea to periodically review that, especially if you’re having a big overpayment, more so if you’re having a great underpayment too. A lot of people have that situation come up, so it’s a good idea to look at that,” said Roe.
Roe said when you have big life changes like the birth of a child, marriage, or divorce you want to review the amount taken out of your paycheck. And if you work multiple jobs, she said it can be complicated to determine how much tax should be withheld.
