Federal Income Tax Refund - is it always a sign of poor tax planning?

Financial columnists and other experts consider a tax refund a sign of poor planning. Their argument is that you have made an interest-free loan to the US Treasury.

While that may be true - is that always a bad thing? Suppose you draw your paycheck as a Goverment employee - such as an active duty Marine, Border Patrol agent, or Customs Inspector? Or, how about a contractor that sells services to the government (and therefore is dependent on the government having funds to pay you).

My point is that if your own financial self-interest is depending on payments from government agencies all year long, then filing a tax return that shows a refund due might not automatically be seen as "negative".

Any other comments - ?

I have to agree with them. I have had one refund in about 15 years. I always plan my tax payments and withholdings carefully to avoid having to pay any penalties or interest, but shoot for the largest possible tax debt at filing time.

My record so far was well into 5 figures, WITHOUT paying a dime in penalties or interest. I made thousands of extra dollars leaving that money in an investment account until April 17th (last year) when the IRS snatched it from my checking account per my instructions. Not only did I get a nice return on that tax money by holding on to it as long as possible, the government also got some extra tax dollars from me on that income. Everyone wins with CAREFUL planning.

It does require that you pay close attention to your tax situation all year but anyone can do it with careful planning. If I get a refund, it tells me that I screwed up BADLY.

Absolutely! They go straight into the bank or one of my investment accounts and work for me until the law says I have to give it to the IRS. TFTP. Report It