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Interest-free Loans


Wow, I bet that title grabbed your attention! With that in mind, I want to take you back to a set of questions I suggested you ask your significant other last week. The first one is, “Do we get a big tax return?” If the answer to that is yes, then you are participating in interest-free loans. YOU ARE LOANING THE GOVERNMENT MONEY AT ZERO PERCENT INTEREST. Were you aware of that?

So, if this is you, then we move on to the second question, “Should we change our W-4s to get more with each paycheck?” and the only answer to that is MOST DEFINITELY. If you have lots of debt (or even if you don’t) and are getting a huge refund annually, you need that money every month. Shoot, if you don't have any debt to pay with it, then invest it! What many people do not understand is that it is actually better to owe the government a little bit of money on April 15 than it is to get a huge refund.

Claiming the correct amount of exemptions on your W-4 can be a guessing game. It is best to talk with your human resources or payroll person to find out exactly how to fill out your W-4. You want extra in each paycheck that, if added up, would come really close to the amount your refund.

If, on the other hand, you like loaning people money at zero interest and waiting almost a year to get paid back, then can I borrow 10 grand?

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