Growth Group | Accounting for Musicians

3 Reasons Why I Hate Tax Refunds

tax refunds hated by growth groupTax refunds, some treat them like an extra payday, others consider them a savings account. I hate tax refunds. I bet you are wondering why? The IRS announced no refunds! Plus, I’ll give you 3 other reasons why I hate income tax refunds:

1. No Interest on Tax Refunds

Neither the IRS or states pay interest on tax refunds, just for filing. After working for 12 months and receiving the refund of your taxes, sure, they’ll send you a check, interest-free! For example, let’s say you file your tax return April 15, now YOU have given the government a loan for over 16 months. The only problem with that loan you “voluntarily” gave Uncle Sam, they don’t give you any interest, just the same amount you loaned them. I hate tax refunds because they do not pay interest.

2. Unequal Treatment When You Owe Taxes

For many years, you’ve allowed the government to “borrow” your hard earned money without paying you interest (see #1). Now, you receive a surprise and owe taxes instead of getting a refund. Guess what? The government does not play fair, that 16 month “loan” they just gave you, yep expect to pay interest on that – guaranteed. Not only that, they’ll also tack on penalties for not filing your taxes on-time or for not paying when they demand it. Unfair, but those are the rules. I hate getting tax refunds because the government doesn’t treat you equally.

3. The Government is Broke

Budget deficits, trillion dollar spending, now 2013 government shutdown. Growth Group has advised our music artists and other entrepreneurs for years to allow us to do tax planning, for this reason. What happens when the government needs to give you an IOU instead of a tax refund check? (hey, I’m not giving them any ideas – just being realistic) No more “extra payday” or “pretend savings account.” You would then be stuck with a sheet of paper that says, “We’ll pay your tax refund, when we can afford it.” I hate refunds from tax returns because one day the government won’t have the money to pay you back.

You pay taxes in the US whether you are a DIY musician, individual or family, or entrepreneur. Link up with a tax professional for planning before this year is over to make sure the IRS doesn’t owe you a lump sum that they can’t pay back. Tax preparation isn’t about just filling out tax forms, over here at Growth Group, we work to make sure you are actually prepared for taxes. Believe it or not, we help our artists file taxes more often to help them save money.

Are you still getting large tax refunds? Would you consider hiring a professional tax person make sure you aren’t paying too much in taxes?