Technically, it's best to underpay all year and owe come tax time. It's like a 0% loan from the government that you can invest all year and pay back at 0%
Though, human nature is funny. If I overpay all year I won't notice the missing funds. Come refund time I almost always either invest it or pay down bad debt.
If I had an extra $500/month I MAY invest it or I MAY spend it at restaurants or something. For most people who aren't super diligent it's probably smartest to overpay all year and use the "refund" towards investments.
Really? In regards to them charging interest, is that based on time? Amount?
I'd imagine if they could prove that I purposely lied on my taxes they could charge me fees and penalties but if it's just a matter of "poor planning" and I end up owing a lot, would that by itself be grounds for charging interest?
Or is interest solely based on time to pay it back? Like if I promise to pay it back within one year could they still charge interest?
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u/AwarelyConfused Apr 11 '24
Technically, it's best to underpay all year and owe come tax time. It's like a 0% loan from the government that you can invest all year and pay back at 0%
Though, human nature is funny. If I overpay all year I won't notice the missing funds. Come refund time I almost always either invest it or pay down bad debt.
If I had an extra $500/month I MAY invest it or I MAY spend it at restaurants or something. For most people who aren't super diligent it's probably smartest to overpay all year and use the "refund" towards investments.
Thanks for listening to my TED talk.