this post was submitted on 27 Nov 2023
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This is an actually useful answer for an otherwise crazy conversation. If you are poor, and have kids, you probably don't owe any money at the end of the year. Most poor people actually get money at the end of the year that they didn't even pay, from child tax credits, earned income credit, and the standard deductions. If you fall into that category then you are better off filing as exempt, so that you don't loan the government money interest free, just like you said. Those few extra bucks every week really matter when you're below the poverty line.
When we were poor, we looked at it as a sort of yearly savings account. We weren't so poor that we couldn't afford to have taxes taken out, so it worked out pretty well. Every time we got our refund check, we were able to do something like get the car fixed.
But you can save that money yourself, earn interest on it, and have access to it should you need it. I think it's the "have access to it" part that messes up most people. It's damned near impossible to save money when you're poor.
It's hard to save it when you have it in your pocket and interest is irrelevant if you spend it all within a year.