To Declare or Not to Declare

I simply cannot be the first person to ever plan the coming year's vacation plans or major purchases around whatever refund is due from the IRS. Retailers all lie in wait between early February and late April for those unsuspecting souls wandering around with thousands of dollars in loose change just itching to be put towards a new car, television or cruise to Mexico. Those with more frugal goals in mind line up all that plastic aching for paying and cut huge debts piled up from the year or years before. The blessing in disguise is that many of us enjoy, nee rely upon these early year windfalls thanks to tax breaks and deductions.

I don't own my own business or home or have children so my deductions are not worth calculating. I have the single man's curse when it comes to tax filing but here comes the advice of some friends of mine who have what they call the "Sane Man's" strategy when it comes to taxes. Stop giving money to the government, they shout! What fool gives away money interest free in the hopes one day of getting at least some of it back?

Me. Once upon a time I filed having claimed three dependents in my household and paid dearly for it come April. My stomach fell through my shoes when I completed my return in January and saw how much money I had to come up with by mid-April. Then I changed my filing status to just one person, myself, and made it through fairly clean but still up and down from one year to the next depending on who was in the White House and who was rewriting the income tax code. Some years I owed, others I managed to get a refund of a few shillings. Tiring of this unpredictability I decided simply to file zero dependents and hope for the best.

Hope for the best?? Some of you are no doubt rolling your eyes but here is my thought process in a nutshell - I get a refund, and a respectable one at that. I overpay each pay period betting on the good odds of getting something back so long as the Feds don't do anything monumentally crazy. My friends still needed convincing so I ran them through a typical month of pay and suffering.

Let's say a refund for a single man like me comes in at $2400. That's exactly $200 per month over the 12 months of the tax filing year. Yes $200 more each month can be put to good use but the likelihood is very strong that that same $200 would have gone to something frivolous, forgotten nearly as quickly as it was spent on things like higher quality restaurants, movies, concert tickets, new clothes, the "comforts" of life that make things bearable from one pay period to the next. Come April that money is gone, there is no refund and quite possibly there is an amount due.

Maybe a few outstanding bills got paid with that $200 each month, maybe the car repair that was seriously threatening the ability to get to work was finally taken care of. Certainly not everyone tries to live the highest possible life on an extra $200 each month? Maybe, maybe not. Even in this economy most of us would simply have sighed with relief that we wouldn't have to go without Starbucks or that we'd be able to pay our smart phone bill.

The best single thing about my strategy is that it gives me something to look forward to, the possibility of a tax refund. I've done stupid things with my refund, same as anyone else. I've done smart things, too, like paying off bills. This year.....I won't tell!

Gotta go.