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Why Humans Are Wired To Want A Big Tax Return

Keith Srakocic
Receiving a big tax return activates the brain's reward center; saving money all year does not.

Monday is the deadline to file taxes, and that means a tax return is in the future for some Pittsburghers. But people have mixed opinions on whether they actually want that big windfall.


“I’d rather get less held throughout the year,” said Andrew Terrick of Dormont. “I guess I’m just one of the lucky people, the refund doesn’t really matter that much to me.”


“I’d rather get a big tax return at the end,” said Chad Miller of Forest Hills. “I just put it in my savings account.”


Paying taxes and, for some people, getting a big tax return can be a pretty emotional experience, according to University of Pittsburgh business professor Nicole Coleman.

Credit Kathleen Davis / 90.5 WESA
90.5 WESA
University of Pittsburgh professor Nicole Coleman

“When it comes to our money, it’s ours. We worked hard for it and we want to be able to control our own money,” Coleman said. “When we talk about paying back taxes, people generally feel pretty negative emotions toward it. This is money that you worked for, and the government is taking a chunk of it.”


Receiving a windfall like a big tax return lights up the brain’s reward center, said Coleman. This is an area in the brain that responds anytime we experience something pleasurable, from eating chocolate to enjoying the sun on a spring day in Pittsburgh.


“Any of those things can light up your reward center which causes your brain to release dopamine, which makes you feel good and relax. It actually lowers your blood pressure,” Coleman said.


Coleman said we don’t get that same feeling when we put a little bit of money into a savings account each month. But for some people, doing the math is their tax strategy.


In downtown Pittsburgh earlier this month, Leslie Klapperich of Collier Township said she never gets a tax return, because she plans out her taxes each year.


“When you’re paying taxes, you’re actually giving the government a no-interest loan. So instead of making interest on your own money, you’re giving free money to the government,” Klapperich said. “So you should always plan out to not have a refund at the end. You should spend your money appropriately throughout the year.”


This is the right way to do it, according to Pitt’s Coleman.


“The economically prudent thing to do is to withhold less and put money in a savings account,” Coleman said. “Even though interest rates are low, there is interest that you will earn and you don’t get that from withholding.”


But, Coleman suggests people take a good, hard look at themselves and their financial behavior, because she said most people won’t do that.


“[Saving money] feels like a chore, and it feels like you’re deliberately reducing your take home pay,” she said.


Coleman said, for some, it makes better sense to maintain a higher withholding throughout the year and get a refund at the end of tax season.


“The problem of course is that we don’t treat the refund like savings,” Coleman explained. “So when we get this windfall we tend to spend more of it than we would if we were looking at the same balance in a savings account.”