Value for Your Money
Monday was the first day you could file your 2025 federal income taxes. They’re due, as usual, on April 15…but you could not even file until this past Monday.
Of course, folks have until January 31 to mail you your W-2 or 1099 statements…in short, the stuff you use to file your taxes doesn’t have to even be mailed until this weekend, but I suppose there are some folks who had what they needed and were able to file already.
Then again, all the IRS forms have yet to be finalized and approved for use. It often takes weeks into the filing period before all the changes and tweaks are made.
I like to get in there somewhat early, to run the numbers and see what the pain level will be. But I’ll wait for other braver souls to field test everything before I get too deep into it.
Some folks like to file as soon as possible so they can get their hands on their refunds right away; after all, it’s free money from the government.
Well, not really. If you get a tax refund, it typically means you overpaid on withholding or estimated payments during the year…so you let the government use your money, and they don’t even pay you interest on it. If you look at a big tax refund each year as a savings plan…you’ve sort of got the whole thing backwards.
And despite politicians who like you to know what a huge tax cut they gave you last year in the reconciliation bill…not so fast. Yes, the bill created the largest tax cuts in history, on a permanent basis—but that’s only compared to what the cost would have been had the 2017 tax cuts expired at the end of last year. Yes, the reconciliation bill made them permanent, which was good…and yes, it warded off huge tax increases…but if you are thinking you will have a huge savings as opposed to last year, you may be disappointed. Might be a little better overall, and certainly better than the worst case scenario…but again, not a huge windfall.
All that aside, given how bloated the federal government is, given all the wasteful spending on dubious programs…how good do you feel about giving this federal government any of your hard-earned money this year?
