Yeah. Most drivers don’t qualify as the threshold is super low. It’s good for low level poor people. Most can’t think of saving but there is definite value.
I did a breakdown for a coworker who was making the same as myself (same hours).
He was withholding $25 more than myself every week. In turn, I was taking the higher allowance, and taking that $25 into a 401k. We’d each get about the same take home pay. At the end of the year, he got back $1000 (which was all of his own extra withholding). I was able to turn that $1,000 into about $2,000, thanks to the retirement credit. Plus I got my withholding back.
This dude had a tax liability of $600. I got my $300 tax liability back.
the government basically matched what I put into my 401k.
At the end of the day, they believe they have $1,000 in free government refunds. I was able to make the refund work for myself throughout the whole year, and now have $2,000 saved away. It’s all about perspective I guess. But for many years, I had been able to nearly double my 401k thanks to the government. That’s a true refund in my eyes.
Now for the average driver, save, save, save. Lowering your tax liability can save you hundreds. Use any extra potential withholding refund $ and invest it.
Other than a few credits, and lowering your tax liability, there is no free $$$. Your $1500 refund is huge because you withheld too much.
I explain it everyday in my hub from about now to about April 15th. Sad stuff