Gardening & Living in Grand Style
The pros and cons of getting a large tax refund...
by Michael Johnson
Utah State University Extension Agent, Grand County
Apr 06, 2017 | 1094 views | 0 0 comments | 158 158 recommendations | email to a friend | print
We are fast approaching the end of tax season and I am sure everyone will be happy to have this task finished. This was the ninth year that Utah State University Grand County Extension hosted a Volunteer Income Tax Assistance (VITA) site and we again were able to assist many of our fellow citizens.

Tax season is interesting because it brings out two very different feelings in people — dread or eagerness. Often the dread starts with just the basics of having to deal with taxes, but it certainly increases if someone thinks they owe money to the government. The eagerness comes to those who believe they are going to get money back. That raises the question time and again as to whether it’s better to position yourself to get a good tax refund or try to be as close to zero as possible. This article will discuss the pros and cons of receiving a large tax refund (understanding we each might term large differently). For the 2016 tax season it’s said that the average refund is about $2,800.

The pros of receiving a large tax refund really only relate to one point — that you get a chunk of money. For those who aren’t the best at saving money this is a chance to have some money to pay down a debt or to save, which is all good. Others use it to go on a wild spending spree, buying items that perhaps they don’t need. That’s OK, but from an economic standpoint not so good. Economists suggest that providing for more of a long-term benefit is better than the often temporary feeling of satisfaction found when splurging on something you have wanted but perhaps not needed.

As to the cons of receiving a large tax refund, let’s start with the most obvious — why did you loan the government your money since they didn’t pay you any interest on it? Some will say that the banks aren’t really paying interest so who cares. Admittedly, there is some truth to that, but could that money have helped you if you had gotten it during the year? For instance, did you have credit card debt that wasn’t paid off each month, resulting in you having to pay interest? What about student loan debt or any other debt that costs you interest that you could have been paying on or even paid off? If you had had that money and been paying off those items you would have saved money because you would have paid less interest.

While I won’t argue that the big check allowing you to buy something cool you really want is nice, consider what else could have been a better use of that money besides giving the government a loan for the year.

Let’s start with putting money in a retirement account, which is good. The stock market has seen increases for some years, which would mean a better increase than if the money were left in a savings account, and definitely better than letting it sit with the government. Another great use is an emergency fund — having a little to add each month could have helped you all year. Of course, you can still start that emergency fund or increase your retirement account by putting any refund check you get to that use. Finally, in the most basic of ways, if you had had that money in your paycheck each pay period perhaps it would have helped you be able to make ends meet a little bit better with less struggle and stress.

Getting a big refund check can be thrilling but it is opportunity lost because it’s money that could have done more if gotten sooner. Should you want to get more of your money quicker this coming year you can do so by changing your W-4 form with your employer. A couple of resources to help with this include the IRS withholding calculator found at, and W-4 information found at

Thought for the day: “If your biggest tax deduction was bail money, you might be a redneck.” —Jeff Foxworthy.

Previous articles are available at The Times-Independent website, Have an idea you’d like Mike to consider writing about? Want more information about these topics? Call the Utah State University Extension Grand County office at 435-259-7558 or email Mike Johnson at

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