Everyone loves to get a big refund check from the IRS, and already, millions of taxpayers are looking forward to their 2014 tax refund. But it's not really the smartest move to have a big refund coming your way.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about how tax refunds are actually a waste of your money. Dan notes that getting a refund means you had too much money withheld from your paycheck, giving the IRS an interest-free loan on your 2014 tax refund. He goes through what you need to do to change your withholding to make better use of your money, although noting that you have to have the discipline to save small amounts over time rather than spending the extra money that will show up in each paycheck. Dan concludes that it's not hard to figure out how to boost your take-home pay to essentially accelerate your tax refund for the 2014 tax year, but some will inevitably decide that the forced saving of high withholding is worth the loss of interest on that money.
Get smarter about your taxes for 2014
Interest-free loans to the IRS cost you money, but there are other ways you can pay less tax and get more money back at refund time. In our special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.