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Absolutely, I agree 100% One year I made a mistake on my taxes and my refund was $1000 more than it should have been. Six months later not only was I fined for

by grecy 9y ago

Absolutely, I agree 100% One year I made a mistake on my taxes and my refund was $1000 more than it should have been. Six months later not only was I fined for the mistake and forced to pay back the $1000, I had to pay interest on that $1000. (Canada) This year when the government owed me $6000 in overpaid taxes, why didn't they pay me interest on my money they were holding...?

justherefortart 9y ago
Because your taxes are your duty. In the US, if you don't file for a year and are owed, after the filing period they do pay interest. But not for the initial filing year. In fact, if you over pay too much, they (the IRS) can penalize you for that as well.
- gamblor956 9y ago
  Their is no penalty for overpaying your taxes unless you mean the implicit loss of the time value of the money overpaid. Anyone who's been "penalized" for overpaying their taxes was actually underpaying their taxes prior to their overpayment. People don't realize that taxes are generally due over the course of the year (usually quarterly), not all at once on April 15/16/17. The April deadline is just the due date for the final payment of your prior year's tax liability. If you were underpaying during the year, you could be penalized for that even if you overpaid in April the following year. This is why trying to game your withholding on your wages (i.e., minimal or underwithholding) is such a bad idea. Any gain (i.e., investing in stocks) is usually more than offset by the penalties and interest you pay if you end up being wrong about how much in taxes you owed. The stock market would have to have a very bullish year to see an upside, usually better than 10% growth--and the target just goes up as interest rates go up.
  - justherefortart 9y ago
    It must have been some quarterly business stuff that stuck in my head.
dylan604 9y ago
This is why so many people recommend having the least amount withheld from you paychecks. The logic is that it is better to owe on tax day, than to get back. If the money is in the gov't accounts, they get the benefit. If it is in your hands, you get the benefit. You just have to be disciplined enough to pay what you owe when it is due.

by grecy 9y ago

justherefortart 9y ago

Because your taxes are your duty. In the US, if you don't file for a year and are owed, after the filing period they do pay interest. But not for the initial filing year. In fact, if you over pay too much, they (the IRS) can penalize you for that as well.

gamblor956 9y ago
Their is no penalty for overpaying your taxes unless you mean the implicit loss of the time value of the money overpaid. Anyone who's been "penalized" for overpaying their taxes was actually underpaying their taxes prior to their overpayment. People don't realize that taxes are generally due over the course of the year (usually quarterly), not all at once on April 15/16/17. The April deadline is just the due date for the final payment of your prior year's tax liability. If you were underpaying during the year, you could be penalized for that even if you overpaid in April the following year. This is why trying to game your withholding on your wages (i.e., minimal or underwithholding) is such a bad idea. Any gain (i.e., investing in stocks) is usually more than offset by the penalties and interest you pay if you end up being wrong about how much in taxes you owed. The stock market would have to have a very bullish year to see an upside, usually better than 10% growth--and the target just goes up as interest rates go up.
- justherefortart 9y ago
  It must have been some quarterly business stuff that stuck in my head.

dylan604 9y ago

This is why so many people recommend having the least amount withheld from you paychecks. The logic is that it is better to owe on tax day, than to get back. If the money is in the gov't accounts, they get the benefit. If it is in your hands, you get the benefit. You just have to be disciplined enough to pay what you owe when it is due.