Income Taxes!

[Awesomeness!!]

So, what are you guys gonna do with your income tax check? (Assuming you're not a freeloader and have a job, and or don't owe!). Usually I blow my money over time on stupid crap but this year I think me and the MS will just go to the Mall and blow it all in one single swoop. (We've been really blessed this year money wise). What about you guys?

[KSpan]

Put it in the bank and then figure out how to adjust my taxes so I don't get a refund next year.

[bigjohn]

Refund?  What's that?

[Panthro]

Credit cards and granite counter tops

[CarolinaNCSU]

A question since it's been alluded to in this thread...

 

 

I'm young (just turned 23), and have only ever worked part time. I've always gotten money back from taxes being single, young, etc. But, I've also seen people, like in this thread, say they don't want a refund. I assume because it means you're not paying as much throughout the year? What are the benefits or "what does it mean" in essence to not get a refund back? 

[Awesomeness!!]

A question since it's been alluded to in this thread...

I'm young (just turned 23), and have only ever worked part time. I've always gotten money back from taxes being single, young, etc. But, I've also seen people, like in this thread, say they don't want a refund. I assume because it means you're not paying as much throughout the year? What are the benefits or "what does it mean" in essence to not get a refund back?

In the long run you keep more of your money. A lot of people prefer it that way. Others like a big lump sum at the beginning of the year. Just depends on your preference. Personally, I like the lump sum.

[PanthersFanNY]

You don't get more money either way.

 

If you get a big refund, then you've basically just allowed the government to hold onto your money throughout the year. If you don't get a big refund, it just means you got a little more money in your paycheck throughout the year because less income tax is withheld from it.

[KSpan]

A question since it's been alluded to in this thread...

I'm young (just turned 23), and have only ever worked part time. I've always gotten money back from taxes being single, young, etc. But, I've also seen people, like in this thread, say they don't want a refund. I assume because it means you're not paying as much throughout the year? What are the benefits or "what does it mean" in essence to not get a refund back?

In practical terms, a tax refund is basically an interest-free loan that a taxpayer extends to the government. Since it is legally the taxpayer's money and the government pays nothing beyond the overage itself, there is an opportunity cost to the taxpayer since they could have been doing something 'productive' with that money throughout the year (invest it, pay down debt, etc.).

[pstall]

it's amazing the # of people who will call the lottery a poor man's tax then turn around and gloat about how big their refund check is. not saying thats you op, just an observation.

[Niner National]

Won't surprise me if I end up owing. 

[Panthro]

In practical terms, a tax refund is basically an interest-free loan that a taxpayer extends to the government. Since it is legally the taxpayer's money and the government pays nothing beyond the oberage itself, there is an opportunity cost to the taxpayer since they could have been doing something 'productive' with that money throughout the year (invest it, pay down debt, etc.).

Im quoting you but responding to the theory

While this is true in essence it does not take into account human nature. Not many people are going to invest that extra couple thousand and earn another 7-8% on it over the year. It also bases it on having that couple thousand from the beginning vs a couple hundred buck every month added to the kitty...so it's even less a return. Most people would likely spend it....so I see nothing wrong with carrying an overage balance if you do something productive with the money like invest in a roth ira or make a home/life improvement.

 

It's no different then having a 0% savings account or a piggy bank.

 

Now tell me the horrors of a piggy bank....omg bacon inflation

[Porn Shop Clerk]

I like making an interest free loan to the US Federal Government.

 

this is what it boils down to.  that money would better serve you collecting interest in a savings account.

[pstall]

Im quoting you but responding to the theory

While this is true in essence it does not take into account human nature. Not many people are going to invest that extra couple thousand and earn another 7-8% on it over the year. It also bases it on having that couple thousand from the beginning vs a couple hundred buck every month added to the kitty...so it's even less a return. Most people would likely spend it....so I see nothing wrong with carrying an overage balance if you do something productive with the money like invest in a roth ira or make a home/life improvement.

 

It's no different then having a 0% savings account or a piggy bank.

 

Now tell me the horrors of a piggy bank....omg bacon inflation

 

human nature also applies to congress that they will take YOUR overage and properly allocate it.

 

there is a real time impact of money on hand weekly or monthly to offset bills/food etc as opposed to being lulled into the forced savings aspect come refund time.

 

i see what you mean but this is why more people need to feel empowered to take control of their own finances and be proactive.

 

the flip side is assuming people will properly doing something with the refund when they get it. some might. some may not.

 

i sorta like trying to control my own destiny a little.

[h0llywood]

I owe between 3-7k every year so I don't look forward to April 15