Losing IRS Refunds

Are you getting tired of having refunds every year applied towards your unpaid taxes? The solution is rather simple. If you are an employee, change your withholdings so that you are having less withheld. I always tell clients in this situation that the best you can do is own $1 on future tax returns. When you have refunds you are in essence making an interest free loan on the money to the government.

Secondly, if you are married and filing jointly, you can protect your refund by filing an Injured Spouse Allocation—form 8379. This will allow you to calculate how much of the refund was generated by you and you can have it paid to you rather than have it applied to a debt that is not yours. Too many taxpayers are filing married filing separate to protect the injured spouse’s refund. This is a very expensive way to protect a refund. Many deductions and credits are lost by filing married filing separately and the taxpayer would get more of a refund filing a joint return with the Injured Spouse Allocation.

Scott Allen E. A.

Tax Debt Advisors, Inc