I’ve made it a very minor hobby to question the advice in Michelle Singletary’s The Color of Money personal finance column in the Washington Post. Yet, I can find only one quibble in yesterday’s column. The rest is very good, sensible advice. But, still, this is just strange.
I’ll confess: I filed my tax return on April 15. This year the time just seemed to come up so fast.
That shouldn’t be a confession. That’s a sign of intelligence. Barring the unexpected large refund due to a life change, no one should file taxes before the deadline. I say, regardless of the payment or refund involved, overwhelm the system at the last minute.
As a practical matter, I owed a minor penalty on the tax due when I mailed my forms on Tuesday. Even though IRS rules incorrectly considered the penalty legitimate, in spite of the unusual timings of my income and estimated tax payments for the year, I was happy to pay it in light of what I received in its place. I earned all of the interest on that not-inconsiderable sum over the course of 2007. After factoring in the taxes owed on that interest, I still came out ahead. And I got the bonus of sticking with the principle.
I won’t advance this argument, but perhaps the IRS should charge a higher penalty. Since it doesn’t, paying early would’ve been irrational. When choosing between irrational and selfish, choose selfish.
When I did my own taxes I always filed early. To me, the peace of mind was worth the lost interest.
Now that we have an accountant who does our taxes, we file late. We get an extension.