Originally posted on http://digitaldiatribes.wordpress.com on February 11, 2007.
OK, so Tax Day isn’t the most likely day that comes to mind when we think of a day where we celebrate. For many, if not most people, the day that comes to mind is April 15. But for me, Tax Day occurs in early February. This year, that day was February 10.
I am going to admit something that most financial gurus would wave their finger at me and say “shame, shame” about. I do not withold everything I can during the course of the year. Now, to the astute finance wizard, this is a cardinal sin. I can already hear the tone, much like my mother reminding me to brush under my fingernails because that’s where the germs hang out, “<whiny geeky voice>But you’re giving the government an interest-free loan!</whiny geeky voice>”
All right, everyone. I am a math guy. I know all about interest. My wife can also tell you that I drive her insane with my grip on the checkbook, and my knowledge of where all of our dollars go. She loathes bill night, I’m sure, because with it comes questions like “What did you spend $22 on at Kohls? Pants for the kids? But the holes in their jeans aren’t even as big as the holes in my socks!” Anyway, my point here is that you can spare me the lecture on allowing the government to hold on to my money for a few months because I underwithhold. I realize the arguments.
Now comes the reality, however. There are a few reasons why I am not against this little financial maneuver, and I am convinced I come out ahead in the long run.
The first point is, you can talk to me when interest rates in short-term accounts increase to the point where it really actually matters. I mean, where not talking 12% rates here, my concerned friends. Am I missing out on some small amount? Sure I am. But that is more than offset by the dollars that would bleed away on random spending over the course of the year because we suddenly have less of a budgetary concern.
And that’s the second point. The critic will say “Well, just don’t spend that. Have a little will power.” Good one. Oh, I’d have the will power to not go buy a high-definition TV. Those things aren’t the problem. It’s the extra Pizza we’ll pick up for dinner or the extra CD you buy or the extra shirt you get because you have the disposable income on hand. And all those things add up. The way we do things now, we are forced to budget and spend wisely. We don’t always do a great job, but we do a heck of a lot better job than if we had the cash on hand to do more than we do today.
The final argument piggybacks off the second point. Because we are not throwing away $5 here or $10 there we get a nice refund. Inevitably, we need to catch up a little bit after Christmas, and the first money goes towards that. Then we have a couple luxury expenditures (our permanent campsite fee and Packer Season Tickets) for which we set money aside. And after that, we have enough to make some home improvement or additional mortgage payment, or some such thing that we likely would not have saved over the course of the year. If you want to call it a lack of will power, then so be it. We are forcing the will power by doing it this way, and it works out.
So, in that light, tax day is always an exciting affair. It’s not a question of whether or not we’ll get a refund, it’s a matter of the amount. And that’s where the celebration of family enters the picture.
We have six children. Now, during the course of the year, these little tykes cost me a pretty penny. They are worth every cent, of course, but they have the nerve to demand food three times a day, every day! And not only that, they want clothes. It never stops.
Well, tax day is their one day of vindication. All those dependents and child credits add up very nicely on that one day of the year where – instead of costing me money, they “make” me money! Once the taxes are done, a happy exclamation emanates from my lips, dancing ensues, and we openly wonder why everyone doesn’t catch on to this scheme of saving money on their taxes.
In all seriousness, we know there are more important reasons to welcome these beautiful lives into the world. But hey, this little side benefit doesn’t hurt matters!
And so, another year’s taxes are completed. They are e-filed, and I am told the refunds can be expected in less than 2 weeks.
Maybe I’ll even spring for a new shirt. I’ll probably wait on the socks, though.
