Having three kids gets me excited to do taxes. I always finish as soon as I can, so I can get my yearly federal bonus. This year it came to $3039.
If I bought a house in October, will I be getting a statement from the mortgage company that lists the interest I paid for the year? If so, I'm still waiting for this last document to do my taxes.
dullard
Elite Member
- May 21, 2001
- 26,189
- 4,855
- 126
Lets do a few simple examples. Suppose for 2005 I will owe $3600 in federal income taxes (that means by April 15, 2006 I'll have to have paid $3600 to the federal government). There are three ways to proceed:
1) Have $300 withheld each month throughout 2005. Then by December, I will have 12 * $300 = $3600 withheld. When I file my taxes, I will owe nothing and get no return. Everything will balance out.
2) Have more than $300 withheld each month. Lets say I have my boss withhold $500 a month. By the end of the year, I'd have 12 * $500 = $6000 withheld. When I file my federal income taxes, I'd get $6000 - $3600 = $1400 back in a refund since I overpaid. This is really stupid of me, since I don't want to let the government borrow $1400 with no interest being paid to me. I'd be able to spend my $1400 month by month throughout 2005 rather than waiting until sometime in 2006 for it. For some unexplained reason, many people enjoy this method.
3) The final method is to have less than $300 a month withheld. Lets say I have my boss withhold $0 a month. By the end of the year I'd have paid $0 in federal income taxes. When I file my taxes, I'd still owe $3600. So I'd write a $3600 check sometime around April 15, 2006. This method lets me use that $3600 during the year 2005 to do whatever I need. Of course, there are two drawbacks. (A) I have to find a way to get $3600 when I file my taxes and many people can't do this - they would have spent it all. (B) This is against the intent of the federal income tax law and can result in hefty penalties in some cases.
In all 3 cases, I pay $3600 in federal income tax. The difference lies in when I pay them.
I think I'll end up having to pay the IRS some of my scholarship money, since scholarships are taxable income over tuition/course expenses (room/board not included, etc) 
Originally posted by: mcvickj
I am. I always have the max taken out. That way I recieve a nice sized return. With some luck I'll have a 2100FP sitting on my desk in a few weeks.
YES. You and I think alike...MUAHAHAH....LOL
MrChad
Lifer
- Aug 22, 2001
- 13,507
- 3
- 81
Originally posted by: MSCoder610
I think I'll end up having to pay the IRS some of my scholarship money, since scholarships are taxable income over tuition/course expenses (room/board not included, etc)
Yes, taxes on scholarship "income" definitely suck. I owed quite a bit during my four years of college. Luckily my mom generously offered to foot the bill since I had a free ride to school.
iamwiz82
Lifer
- Jan 10, 2001
- 30,772
- 13
- 81
The tax snobs are out enforce today.
I prefer getting a nice little refund. Who gives a damn if I could have had 1/26th of it added to each paycheck when I know that would have been expendable anyways. And lets not forget the awesome return I would have gotten from a bank.
I prefer getting a nice little refund. Who gives a damn if I could have had 1/26th of it added to each paycheck when I know that would have been expendable anyways. And lets not forget the awesome return I would have gotten from a bank.
dullard
Elite Member
- May 21, 2001
- 26,189
- 4,855
- 126
Everyone knows their necessary information by December. I always have my taxes calculated by then. If you do your taxes electronically or by the phone you don't even have to wait for the W-2s. Or if you want to do it by mail, the minute the W-2s come, staple them on and mail it in.
JulesMaximus
No Lifer
- Jul 3, 2003
- 74,599
- 998
- 126
DrPizza
Administrator Elite Member Goat Whisperer
lmao... look at his nic!
I'm hoping for a nice chunk of change back... I have a few extra things to write off this year (3 semesters of tuition, donated a car, refi on a house...) I was initially hoping for about 5k back, but my wife says it looks more like 2-3k. (We got over 4k back last year)... Yeah, it's an interest free loan, but our incomes and deductions have been fluctuating so widely the past several years that I'd rather err on the positive side than the negative side.
spacejamz
Lifer
- Mar 31, 2003
- 10,993
- 1,742
- 126
we paid a bunch in mortgage interest and property taxes last year, so we should get some money back(last year was first year of homeowner ship)...
need to run the numbers on filing a joint return or file separately to see which gives a better return...
Yeah but I'm taking a tax training class and I know you need to send in your copy of your W-2s from the employer when you file for a return or taxes.
Originally posted by: MSCoder610
I think I'll end up having to pay the IRS some of my scholarship money, since scholarships are taxable income over tuition/course expenses (room/board not included, etc)
yes, and that pisses me off. I'm scraping to get by here, they refuse to give me a penny of financial aid beyond my "needs", and, well, apparently taxes aren't a "need":roll:
- Oct 30, 2000
- 42,589
- 5
- 0
Unless you have a large desparity between income and deductions, filing jointly will be the better way to go.
Filing seperately will also shaft you from some dedutions.
- Oct 30, 2000
- 42,589
- 5
- 0
Originally posted by: jagec
Originally posted by: MSCoder610
I think I'll end up having to pay the IRS some of my scholarship money, since scholarships are taxable income over tuition/course expenses (room/board not included, etc)
yes, and that pisses me off. I'm scraping to get by here, they refuse to give me a penny of financial aid beyond my "needs", and, well, apparently taxes aren't a "need":roll:
I made a post in the "tax questions" sticky, and was told that I don't have to pay taxes on money given to me for school
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