Tax Refund?
May 5, 2024 09:13:44 #
What's all this discussion about a tax refund? I have never had one. I don't understand why people overpay the government every year just to get it back the net year.
May 5, 2024 09:16:38 #
May 5, 2024 09:20:29 #
It's a guessing game to have funds withheld as to not get hit with an underpayment penalty and come close to balancing out. It depends on one's NET tax bracket after deductions.
May 5, 2024 09:45:39 #
I am not sure if I had to pay a penalty for underpayment or not. I filed my tax using turbo tax and pay the IRS whatever turbo tax told me to.
May 5, 2024 09:59:08 #
It all depends on how your income is structured. If you have a salary, your taxes are withheld and paid as you go. If you have other income you either pay for that quarterly or you increase your salary withholding to cover it. If your other income is not regular or you can't forecast it, increased withholding could be too much or too little.
My accountant told me that as long as I come within a few percent of last year's tax due, you won't get a penalty if you owe more this year. The question is how much is a few percent?
I have never worried about it. I increase my withholding to cover my forecast estimate. Sometimes I owe. Sometimes I get a refund. If there are penalties they have been small so they don't make a big difference. But then my income and taxes are not large.
My accountant told me that as long as I come within a few percent of last year's tax due, you won't get a penalty if you owe more this year. The question is how much is a few percent?
I have never worried about it. I increase my withholding to cover my forecast estimate. Sometimes I owe. Sometimes I get a refund. If there are penalties they have been small so they don't make a big difference. But then my income and taxes are not large.
May 5, 2024 10:00:13 #
jaymatt wrote:
What's all this discussion about a tax refund? I have never had one. I don't understand why people overpay the government every year just to get it back the net year.
If the govt. owes you money back...you're doing it wrong.
May 5, 2024 10:07:45 #
May 5, 2024 10:12:55 #
Canisdirus wrote:
If the govt. owes you money back...you're doing it wrong.
For you, yes.
For others, maybe not.
Or does your opinion trump my opinion?
May 5, 2024 10:38:17 #
Longshadow wrote:
For you, yes.
For others, maybe not.
Or does your opinion trump my opinion?
For others, maybe not.
Or does your opinion trump my opinion?
Simple...you aren't gaining anything by doing that.
You keep your money with yourself...and grow it far past what the govt. gives you...which is zero.
Far better to owe than not.
May 5, 2024 10:49:08 #
Canisdirus wrote:
Simple...you aren't gaining anything by doing that.
You keep your money with yourself...and grow it far past what the govt. gives you...which is zero.
Far better to owe than not.
You keep your money with yourself...and grow it far past what the govt. gives you...which is zero.
Far better to owe than not.
We're not loosing anything either, other than maybe 50¢ in interest over the year.
Which I'm not really concerned about.
Again, your opinion.
May 5, 2024 10:51:14 #
Longshadow wrote:
We're not loosing anything either, other than maybe 50¢ in interest over the year.
Which I'm not really concerned about.
Again, your opinion.
Which I'm not really concerned about.
Again, your opinion.
If you owe you get to keep the money for the year and perhaps you can earn some interest on it but you will have to pay the tax on the interest you earn. It makes litte difference.
May 5, 2024 10:52:43 #
It’s all about comfort level. For years, my goal was a zero sum game at the fed and state level. Not an easy quest and quite honestly not worth the trouble. Then, after the house was paid for and various taxes and insurances became a first quarter of the year outgo. I decided another tactic was easier to manage. I knowingly overpay our withholding from retirement pensions and from annual IRA RMDs. And when I do my taxes, I know most refund $$$$ will be going right out the door after I get the money. Given lousy deposit interest earn-able, it really doesn’t make much of a difference.
May 5, 2024 10:57:15 #
BebuLamar wrote:
If you owe you get to keep the money for the year and perhaps you can earn some interest on it but you will have to pay the tax on the interest you earn. It makes little difference.
Especially with interest rates the way they are.
Keep it and not use it (save it for taxes) and maybe get 50¢ in interest, or send it and not be able to use it and not get 50¢ in interest. Unless one is talking about thousands ans thousands of dollars, doesn't matter to me.
I'm not worried about the 50¢.
May 5, 2024 11:05:13 #
Canisdirus wrote:
If the govt. owes you money back...you're doing it wrong.
May 5, 2024 11:12:45 #
Longshadow wrote:
...I'm not worried about the 50¢.
My accountant rounds all the numbers to the closest dollar anyway.
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