Finally ! A decent tax return!

[Schfifty Five]

Interesting, thanks for the info. Didn't realize that.

Unfortunately a lot of people don't know that info.

I mean if you think about it, assuming the 10%/$10,000 bracket as the other person posted, if someone made $10,000 and someone made $10,001, the $10,001 person would be getting royally F'ed if he had to pay a full 20% on his entire taxable income while the $10,000 was only getting taxed 10%.

 

[CPA]

It's true that your not getting any interest on the refund monies but how much would you have made in interest if you faithfully drove to your bank and deposited $35-45 a week for the whole year? I think your interest earnings would be so small that it wouldn't cover the gas to do so. I deliberately have enough taken out every week to ensure I get at least $1-2K every year and like the fact that I can look forward to this time of year for a cash boost!..

Don't drive, have it direct deposited.

So, you'd rather get $1-2K in April, than $1-2K throughout the previous year? I'm sorry that logic just doesn't make sense to me.

 

[Kelvrick]

It's true that your not getting any interest on the refund monies but how much would you have made in interest if you faithfully drove to your bank and deposited $35-45 a week for the whole year? I think your interest earnings would be so small that it wouldn't cover the gas to do so. I deliberately have enough taken out every week to ensure I get at least $1-2K every year and like the fact that I can look forward to this time of year for a cash boost!..

What kind of idiot drives to his bank just to deposit that small of an amount? Do you get paid cash? With a check? If with a check, I figure you're depositing it with a bank? You're there anyway so stop with the bullshit gas argument.

Otherwise, you get it direct deposited. I guess you can try to figure out how much it cost you in electricity to log into your website and transfer that money into your savings account but that would be about as smart as saying how you love to give interest free loans. If it works for you, I guess its better than spending that money and not having enough to pay the government at the end of the year.

How about thinking about it this way. Are you completely out of debt? Not only did you provide an interest free loan to the government for the year, you also paid the interest on that same amount at whatever apr your various debts accrue at.

I usually try to compensate for credits that I will earn at the end of the year as well.

 

[Qacer]

Finally got a few K back for a tax return, last few years I got barely a few hundred.

This was very unexpected, and mainly because my household income dropped and put me into a lower tax bracket (not by much)

Hmm... repair my deck? get a toilet in my basement? or a nice AR-15?


decisions decisions

It's better to get a low return as long as you are sure that you have made the maximum allowable deductions. A low return in this scenario would allow you to put more money in an interest earning account per paycheck.

 

[CPA]

OK, since we have some tax experts in here, I was always curious about this.

What would your general taxes be for a household that made $71k in 2008 vs.a household that made $68k, assuming generic deductions.

I remember hearing that AMT had something to do after a certain amount of household income, I thought was 70k household

AMT doesn't kick in on a specific income level, it kicks in if you don't pay in a minimum amount of tax based on your income level. The reason you may be thinking $70K, is that the AMT has been progressively hitting more and more middle income families because it has rarely been adjusted for cost of living. So, where it was supposed to affect a few hundred thousand of the richest people in the country, it is now affecting millions of middle income families.

 

[ebaycj]

I deliberately have enough taken out every week to ensure I get at least $1-2K every year and like the fact that I can look forward to this time of year for a cash boost!..

Agreed. It's not THAT much of a loss, and it's a "forced savings" to some degree.

I know it's bad finance practice but getting a fat bonus and a fat tax return in addition to the standard 2+1/6th of a paycheck in February is nice. This past year I got 7.75 standard paychecks worth, needless to say I'm in a different state of mind than in January.

 

[HannibalX]

I got a decent return this year but it was unrelated to income to a degree.

 

[HeXen]

I still havnt done my taxes yet. All my life i always got back $300-$390 and thats it, it never changes for some reason, long form, short or online. Thats barely a weeks paycheck so i could hardly care to be in a hurry to do it.

 

[BUTCH1]

What kind of idiot drives to his bank just to deposit that small of an amount? Do you get paid cash? With a check? If with a check, I figure you're depositing it with a bank? You're there anyway so stop with the bullshit gas argument.

Otherwise, you get it direct deposited. I guess you can try to figure out how much it cost you in electricity to log into your website and transfer that money into your savings account but that would be about as smart as saying how you love to give interest free loans. If it works for you, I guess its better than spending that money and not having enough to pay the government at the end of the year.

How about thinking about it this way. Are you completely out of debt? Not only did you provide an interest free loan to the government for the year, you also paid the interest on that same amount at whatever apr your various debts accrue at.

I usually try to compensate for credits that I will earn at the end of the year as well.

Fine, I'll dump the gas argument, point is savings accounts pay squat in interest anyway, if you started with $2K in a savings account @1.5% you would wind up with $2030 at the end of the year, whoope-ding-dong. and you wont even get that as you didn't start off with that much so you would probably wind up getting $8-15 in extra money vs getting a big refund check, I'll take the second option thank you..

 

[mugs]

Don't drive, have it direct deposited.

So, you'd rather get $1-2K in April, than $1-2K throughout the previous year? I'm sorry that logic just doesn't make sense to me.

I may have you confused with someone else, but I believe you and I have debated the merits of Dave Ramsey's financial advice for paying down credit card debt in the past. I don't like his snowball method because it is costs you more, but I understand that there is more to finances than just math - there's also psychology.

So while I don't think it's "good" to get a big tax refund, I think it can be good for some people. People who spend based on how much money they have coming in might have difficulty saving for big purchases or just putting money into long-term savings. If someone sets a goal of saving $200 per month, having an extra $100 a month coming in may just mean they spend an extra $100 a month.

It's not the way I'd handle my finances, but I don't think it's as bad as people make it out to be to get a big refund.

 

[nerp]

You dont want to get a few K back. That means you overpaid and gave Obama an interest free loan for the year. Well played!

Some of us have lots of money already so we don't give a shit.

 

[DrPizza]

Ditto the unexpected return this year. I got back a lot more than last year. I'm thinking it's time for a tractor. (Which will give me a write-off for next year's taxes.) I'd have to hire an accountant midyear to figure out what to change my withholding to, since it's not a matter of simple income vs. tax on that income. (Farm, rental property, kids in college, wife in college, etc.)