This post will tax you....

So yesterday morning I downed my usual Sunday morning pot of coffee and did my taxes. My effective tax rate came out to 10.85%, which means that I pay a lower tax rate than Warren Buffett's secretary. It also means that I'm getting about $4500 back between federal and state taxes.

Some people who hear this will probably think that I'm an idiot for giving the government an interest-free loan, and that I should change my withholding so that less in taxes is taken out of my paycheck instead of getting a big refund at the end of the year. But there is a method to my madness. The way i figure, if I lower my withholding, I'll get about $50 a paycheck more. That's a nice amount of money, but it's small enough that I'd probably ramp up my consumption to eat it up - a few more pairs of sneakers, a few more drinks from Starbucks, a few more electronic gadgets. But instead, I get a couple grand in one lump sum, which I feel I need to save - so it goes into my savings account, to be put towards bigger things - most likely a new truck and some home renovations.

Yes, I realize there are other ways I could probably still achieve the same result, like decreasing withholding and automatically putting the additional amount in a separate account. But that requires work, and I didn't get to be a blogger with readership in the double digits by proactively doing stuff. This works for me, and requires me to do nothing, the job I was born to do.

And it's hard to get too worked up about the lost interest, since I think my savings account is earning around 0.5%. Half a percent of $4500 works out to around $22, and the actual lost interest is considerably less (since only 1/12 of the principle would earn interest for a whole year).

So I'll continue to smile when TurboTax rings up the green digits of how much I'm getting back. Sure, it's my money, but it's money I probably would have spent on something stupid otherwise.