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.