Pay only what you should in taxes. You should act like an adult, do your part, and not try to get out of your responsibilities. But why pay too much in taxes?
There are many reasons, or justifications, for doing something. First, someone might want to stay on good terms with the IRS. Why make people worry and pay attention. So what if I pay a little too much in taxes? I can at least sleep well tonight. First of all, it's not likely that the I.R.S. will give you the attention and appreciation you deserve when you're in trouble. It's best not to stay up too late waiting for the I.R.S. letter of congratulations. It's like when a bank called a customer in to talk about a late payment. The customer asked the banker how much he or she owed, and the banker said $1,000. The customer told the banker that the month before, he had $10,000 in the bank and didn't worry about it. This didn't help. Even though there was a lot of talking and arguing, the banker still asked for payment.
When you shop at Wal-Mart, do you pay $15 for something that costs $10? When paying taxes, it's the same. You could say that they are being forced to save. It's possible that if the IRS didn't hold the money in trust, you wouldn't have any savings. But there are two things to keep in mind. First, the fact that you are reading this article shows that you want to avoid paying more taxes and want to keep more of your money instead of giving it away. Also, at least a bank will give you interest, but the IRS won't give you anything, even though they kept your money for no reason. If it's a large amount of money, the interest rate can be quite high. If the money is in a bank account, it can also help your credit score. It is very unlikely that the IRS will send a report to the banking and credit industries saying that you overpaid your taxes, which would be a good thing for your credit score. If a financial expert looked at your tax payment surplus, they might think that you don't know how to handle your money well.
If you want to save money for the future, save it in a tried-and-true way that has been around for a long time. Just save a small amount every month in a bank or credit union account. You can also say "pay yourself first." Have your bank or other financial institution take a set amount out of your main bank account every month. It doesn't hurt. You won't spend money you don't have.
The power of interest that builds on itself is amazing. You'll be amazed at how this money will grow as you save it. Last but not least, you will be able to get to your money quickly in case of a family or car emergency. If you have a surplus in an IRS account, you will have to wait until the IRS processes your money before they send you a check.
If you own a business and have to pay your taxes every six months or every three months, this is even worse for your tax payments. Not only will the U.S. not get interest on the extra surplus payments, but the money may have been borrowed from a bank, credit union, or finance company. Talk about putting salt on a wound. Not only does the IRS not pay you interest on the extra taxes you paid, but you also have to pay interest on the money you borrowed.
In the end, we all need to pay our taxes. But it's not smart and can be downright stupid to pay too much tax. It doesn't help us financially or in any other way.
