Gail Perry's prescription for tax return withdrawal

You filed your tax returns last week (or earlier, if you are efficient and organized, or happen to have a big refund coming your way), so now what? Are you trying to figure out how to cover that big check you just wrote? Are you wondering how long it will take to get your refund? Are you rethinking your apathetic performance as a voter in past elections?  Herewith are my guidelines for surviving tax return withdrawal.

Rethink your withholding

If you owed a ton of money with your tax return this year, and maybe even some penalties for underpaying your taxes, you can avoid writing big checks in the future by having more taxes withheld from your paycheck.

The idea behind withholding, originally termed “Pay as you go” when it was devised in 1943, is that you pay your taxes evenly throughout the year, offsetting the income you earn with the tax owed on that income, and when you file your tax return in April it will be merely a report of the income you earned and the related tax that you paid. With luck the tax you owe and the tax you paid will be a wash and you won’t have to write a check, nor will the government owe you a refund.

This wash scenario almost never happens, largely due to people changing jobs during the year so that their income is not earned steadily and the fact that taxable income gets reduced by deductions for money you spent to stop smoking, send your children to day camp, and other worthwhile causes. Our elected officials assume taxpayers around the country want to share your expense for these items and so the expenses are deductible.

Instead, people either owe extra money to the IRS (and possibly their state revenue agency) or end up getting a refund. You can change all that by adjusting your withholding so that the so-called proper amount is withheld. Increase your withholding by claiming fewer exemptions, or decrease your withholding by claiming more exemptions or higher deductions.

Make these changes on Form W-4 and give this form to the person in charge of payroll at your office. Your employer will have a copy of this form and might even help you figure it out. (ed. note: You can also down load a copy of this form right here at Fun with Taxes, in the Federal Tax forms page - click here). Any change you make in your withholding now will affect your take-home pay for the rest of 2000.

Where’s my refund?

If you are owed a refund of tax that you overpaid or that was over-withheld during 1999, and you filed your tax return close to the April 17^th deadline, you can expect to receive your refund check within four to six weeks, according to Carolyn Stump, communications manager for the IRS’s public affairs office.

Ms Stump went on to say that if you requested your refund be directly deposited in your bank account, you can expect the deposit to be made “within days of the IRS receiving your return.” To verify that your refund has been received by your bank, you must contact your bank or wait for a bank statement.

Uncle Sam has your money now

Money that is withheld from your paychecks during the year gets dispatched to the government on a regular basis, assuming your employer is keeping up his end of the tax chain by depositing the money on a timely basis. Money that you paid with your tax return also gets added to the government coffers.

You may recall news of the federal budget from earlier this spring. Each year the president’s advisors create a budget for federal expenditures; the House and Senate vote until somebody agrees on a budget that everyone can live with. Our elected officials try to provide something for everyone in our federal budget so that they can rely on your vote for reelection, that being the motivating force behind most federal spending.

My niece, a lawyer working in Washington, D.C., recently suggested that it would make sense to combine Election Day with the tax return filing deadline, so taxpayers would more closely associate the tax they pay with the people responsible for creating the tax.  I really like this idea. Each polling/tax-paying location could post a large chart of all the federal programs, how much they cost, and which candidates support which programs. Pay your taxes and vote for how your money should be used. Something tells me our senators and representatives won’t ever vote for this program.