The Joy of Overpaying the Tax Man
Earlier this year, I found a pleasant surprise: I overpaid my 2007 taxes by several thousand dollars. I was still in the three-year window to file an amended return, did so, and received a refund within weeks.
Another surprise: The IRS paid interest on the overpaid funds during the entire four years. The interest rate works out to around 4% a year -- far higher than what I could have received in a money market fund, and way better than the stock market over that period.
I don't know whether to be happy or sad that overpaying my taxes turned out being one of the best investments I've made in recent years. Maybe I'll do it more often.