Well, at this point, you've determined that you either:
1.) Owe something on your taxes,
2.) Are getting a tax refund, or
3.) Have completely forgot about doing your taxes (pssst - you've only got 10 days left)
Looking at that list of options, we're all hoping that #2 applies to us. While it's great to see that refund check coming back to us in the mail (or directly into our bank account if we use direct deposit), I'm here to rain on your parade (but just a little bit). If you want to know why that refund isn't all good news, read on.
When we owe the government money on our tax return, it simply means that we didn't have enough set aside during the year (usually through payroll taxes), and we owe the government the difference. That's why they insist on getting that money from you as soon as possible - you've held onto it longer than you should have, and it's money they want to use so they can save or spend it as they see fit (OK, mostly spend it...)
A refund works the same way, except that it means that the government has taken too much money out of your earnings during the year, and they've held onto it when it really should be yours to spend or save as you see fit. Your tax return, then, is essentially a request to the government for it to send your money back to you. You may be seeing things come together now, but essentially a tax refund is money that you lent the government all year, interest-free.
So if you get a $3,000 refund, that's great, but it also means you were $250 short every month on your income. The goal with taxes, as we've discussed before, is to neither owe anything nor get anything back. Some people like getting refunds as a "forced savings plan", but there's better ways to save and budget than letting the government get all the interest you could be earning.
So what if you're getting large refund every year? All you need to do is go to your employer and ask to fill out a new W-4. This form lets the government know about your tax situation so they know how much to take out of your taxes. Sometimes, as life situations change (and our W-4's don't), the gaps of what we owe and what we've paid start to widen, and we end up with large refunds. You can change your W-4 anytime you want, so there's no time like the present! If you're having trouble getting someone to give you a W-4, use this link (http://www.irs.gov/pub/irs-pdf/fw4.pdf) to get one downloaded from the IRS web site. You'll also want to find the same kind of form for your state taxes. In Charlotte, for instance, you'll want to fill out the NC-4 (http://www.dornc.com/downloads/nc-4.pdf).
If you insist on continuing to get a large refund every year, please read the entire article again as punishment. Then, use your refund to make sure your emergency savings are adequate, or to meet other financial goals. Resist the temptation to spend it all on something you may not really need and then wish you had it when you have a financial emergency later in the year.
Good luck! Here if you have any questions...