Tax Day #ProTip: How to get bonus money from your income tax

#ProTip: Since it is Tax Day, today’s tip will feature how to get bonus money on your taxes. Many people take the tactic of paying in a little extra from each paycheck so they get a nice refund. Do not do this!

This is like giving the government an interesst free loan with your money! Why would you do that??? Pay attention, this is a little complex, but I am going to tell you how to get “free money” from the government, but it does take some work.

Instead of paying in extra, you should pay in as little as you can throughout the year.
* Take as many deductions as you can off your salary, so that you pay in less each month. Get it as low as possible.
* Then, you take that extra money and put it in an interest bearing account. Call it “tax-account”.
* Do not cheat! You have to take that extra tax-money each month/week and put it into the account.
* When taxes are due, take what you owe out of your tax-account and pay that.
* Then you have the extra interest left-over! It is like you are getting money for free!!! Basically, what happened is that the government gave you an interest-free loan and you invested that and get to keep the interest.

If you want to have more left over, just put in a little extra than you would owe each month, just like you have been doing for the government.

Let me give you an example. Say that you normally owe $10,000 in taxes. Usually, you pay in $12,000 from your salary, $1000 per month, so you get $2000 back at the end of the year.

Do it my way. Instead of giving that $1,000 per month to the government, only pay in $500 per month (for a total of $6000). Take that other $500 and put it into an interest bearing account. Say you make $300 in interest throughout the year. Then, at the end of the year, you have $6300 in the account. You pay the other $4000 to the IRS (total of $10,000). You end up with $2300, instead of $2000! It’s like a free $300 and all it takes is a little effort and discipline on your part.

The more you can keep from your monthly pay-in, the more interest you can make. Just make sure you do not snitch from your tax-account throughout the year! With your extra $$$ you can buy me a drink as a thank you.

Let me hear what you think! (All comments must be approved, so your comment will not appear right away)

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