No More Free Lending Money To IRS

We just filed our taxes this week and we are glad to see a big refund. However, while it feels good to get a refund during tax season, it's not really a smart thing to do because that means we are lending  money to the IRS for free. And we won't even get the refund on time! So I figured, why not put that extra money to a high-yield savings account and make it work for us?

So here's what we are doing moving forward:

• We are reducing tax withholding with payroll so that we won't overpay our taxes.
• That extra income that we are getting every month, we are putting that into a high-yield savings account that makes at least 3% annually. A Kasasa Cash account is currently a one good way of doing this since most of the savings account earn nothing. We are doing a direct deposit so we won't even see that extra money. It still feels like overpaying our taxes to ensure that we won't owe taxes at the end of the year, but that over-payment goes to a savings account instead and is making 3% in interest. That is $30 for every $1,000.
• Only key is, we better make sure we won't touch that money! That is exclusively tax money! We know  that that requires self-discipline.

So next tax season, we won't be expecting a refund from the IRS. We won't be waiting for the IRS to update their tax system so we can file our return and get our refund! But we will have enough money in the bank to cover the taxes. And that extra? We can withdraw it anytime plus interest.

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