Every year, when I prepare my tax returns, I consider adjusting my W-4 and G-4 withholdings (federal and state) to seek the holy grail of tax break-even. Unfortunately, I canít predict my income nor the changes in the tax code with complete accuracy. If I canít break even, my goal is to end up owing a small sum, hopefully less than $200. If we owe more, my wife will pout for weeks.
I risk doing time in the dog-house to avoid making an interest-free loan to the government. Iíve learned that some people donít view taxes my way (incredible as that may sound!). So long as taxes come out of the paycheck, they become a given that somehow seems painless to some folks. Others, like me, consider what their take home could be if it werenít for taxes.
Many people lack the fiscal discipline to save money. They use the IRS and the Georgia Department of Revenue as their "Christmas Club fund", so to speak. Many forms of commercial enterprise take advantage of this tendency. "Use your refund! Use your refund!" some shout at us from the television screen. "All you need is a W-2, weíll give you credit based on your anticipated refund!" Electronic filing services will give you cash now, which is your refund signed over to the service less their processing fee.
Some people are so blissfully happy in this ignorant approach to refunds, Iíve decided to capitalize on it and enable people to enjoy more refunds. Iím starting a refund service to "help" these people with their savings.
Most refund-lovers crave convenience. The taxes they love to get back in the form of a refund check are withheld from their paychecks. To duplicate this convenience, Iíll offer bank drafting so that people can have money automatically taken from their bank accounts and transferred to mine. No pain whatsoever.
Every year between January and April, Iíll accept applications from participants to withdraw their payments. To add to the excitement and suspense these refund-lovers love, Iíll take six to eight weeks to process their applications. Iíll need that time to liquidate the investments in which Iíve been earning interest. What the heck, anticipation is half their fun, so Iíll earn a little more interest while they wait.
After the certificates of deposit mature and the mutual funds have a favorable redemption price, Iíll cash in. Then Iíll get official-looking checks made of cardboard with maybe a few computer punch holes thrown in for effect. These checks will thrill the refund-lovers when they receive their money back. Iíll enjoy the earnings Iíve made with their money. This will truly be a win-win situation.
To those who like gimmicks and want to feel theyíre cutting in front of other refund filers, Iíll offer an on-line service. They can send in their filing information via electronic mail and Iíll send their refund in just two weeks. I wonít be able to earn as much on these peopleís money since Iíll have to keep it in more liquid investments. Accordingly, Iíll be forced to assess a small fee for electronic filing. To duplicate the thrill of instant refunds now being offered, Iíll issue instant wire transfers and, of course, there will be a more substantial fee for this service.
On the bright side, these fees will be absolutely painless since people wonít have to pay for it directly with a check or cash. As a service to my customers, Iíll deduct these fees from their refund checks or wire transfers at no extra charge.
This lucrative service has one major threat. If word gets out that people can do their own savings easily and conveniently using bank drafts and they can earn interest to boot, the whole concept will fall apart. Fortunately, there are a lot of chumps----er, I mean customers----out there who wonít put much thought into it.
Copyright ”1996 Steve Scroggins - All rights