Or the other way to look at is the opportunity cost. I would rather have that money sitting somewhere collecting 5% interest than waiting to get it back in my tax return. I don’t know how many times I’ve had to explain that concept to people….
Not to defend the other position …
But, why do you think you need to wait for a tax return to have the benefit of lower taxes. You should simply set your withholding (or quarterly payments if you are not a W-2 employee) such that you pay approximately what you owe.
Paying too much and getting a refund later is giving Uncle Sam a tax-free loan. Like you said, I would rather have that money collecting 5% interest somewhere. One shouldn;t wait for their tax refund to benefit from lower taxes, regardless of the tax strategy deployed, whether it’s real estate, moving a few-hundred K into tax-free Munis, or whatever. I don’t know how many times I’ve had to explain that concept to people…
