Last year may have been our best ever. Maybe $600 in returns. Would like to widdle that down just a bit lower.
I am going to adjust our W-4 situation here. The optimal tax situation from a financial point of view is, of course, to owe as close to the maximum that you can without having to pay a penalty. Plan for the tax liability each April and invest an equivalent amount as early in the year as possible...
With Savings accounts returning .01 percent annual interest and US savings bonds returning next to nothing I wouldn't worry so much about the small amount of money you are talking about. I got back 4000 dollars last year but I am expecting less this year. I have had to pay 5000 dollars before and let me tell you I prefer getting money back.
It is this exact type of short sighted thinking that keeps poor people poor and unwise investors behind. It isn't so much the rate you are getting on an investment as much as it is the spread on the time value of money. Most CDs pay at least ½% which is 50 times your quoted .01%. There are many other ways to invest as well, such as the stock market that could easily pay a lot more.
Another thing many people miss with any tax refund they get is that they go out right away and blow it all as if it were free money. Which, of course, is the absolute worst thing you can do. A much wiser (and true investment) would be to pay off as much debt as possible starting with the highest interest bearing debt and working your way down. (I wish I was disciplined enough to do this.)
