Why We’re So Irrational When It Comes to Tax Refunds

 

http://business.time.com/2013/03/18/why-were-so-irrational-when-it-comes-to-tax-refunds/?iid=biz-main-lead

Think about it: A tax refund is just that — a refund of your own hard-earned money. It’s not a gift or a stroke of good fortune. The problem is that most people don’t look at tax refunds this way.

Most Americans—a full 75%—receive refunds after filing their taxes. In other words, most Americans have too much money withheld from their paychecks. More than half of Americans—58%, to be exact—say they intentionally plan to receive a refund each year. Understandably, people do so to avoid an unexpected tax payment come April 15, with the idea that it’s better to withhold a bit more to be on the safe side. But the average tax refund will be over $2,800 this year — well beyond “a bit more.”

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