cancel
Showing results for 
Search instead for 
Did you mean: 

Do you plan to use all of your tax return to pay off DEBT?

Regular Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?

I'm using my refund to go to Germany to see my son and his familySmiley Very Happy.
Filed BK 07/07/15 Discharged 10/07/15
Starting scores 11/2015 EQ 567 TU 487 EX 531
Current scores 02/2017 EQ 649, TU 642, EX 651

Cap 1 QS 5000 Cap 1 QS 6500, PenFed Promise 2500, NFCU GoRewards 8000 NFCU CLOC 4000
In the garden until 2018
Message 11 of 49
Frequent Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?

paying off these prime cards!!!!!...Smiley Very Happy
Message 12 of 49
Regular Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?


rabalt wrote:

Nope. I usually don't let the feds use my money for the year.

I like to use it or save it myself. So I don't get so-called refunds. 


+1. I won't make interest-free loans to the government. Would rather pay a few hundred at filing time.
In addition to my Federal return, I have to file with 2 states. I try to work things out so that the refund from one state covers the check that I have to write to the other. 
 

 

Message 13 of 49
Senior Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?


JimB wrote:

rabalt wrote:

Nope. I usually don't let the feds use my money for the year.

I like to use it or save it myself. So I don't get so-called refunds. 


+1. I won't make interest-free loans to the government. Would rather pay a few hundred at filing time.
In addition to my Federal return, I have to file with 2 states. I try to work things out so that the refund from one state covers the check that I have to write to the other. 

I changed my exemptions about mid 09.  I'm getting "some" back, but have the same mindset...I get no interest free loans...why would I give one?  What I do get back will be split on 2 cards & the remaining goes in savings.



Starting Score: 02/2015 TU 709 - EQ 676 - EX 729
Current Score: 12/2017 TU 779 - EQ 779 - EX 782
Goal Score: 850

Bury me in the garden...last app 07.27.17

Message 14 of 49
Valued Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?


BungalowMo wrote:

JimB wrote:

rabalt wrote:

Nope. I usually don't let the feds use my money for the year.

I like to use it or save it myself. So I don't get so-called refunds. 


+1. I won't make interest-free loans to the government. Would rather pay a few hundred at filing time.
In addition to my Federal return, I have to file with 2 states. I try to work things out so that the refund from one state covers the check that I have to write to the other. 

I changed my exemptions about mid 09.  I'm getting "some" back, but have the same mindset...I get no interest free loans...why would I give one?  What I do get back will be split on 2 cards & the remaining goes in savings.


 

Me, too. Husband is self-employed, so we pay quarterly...and always still end up sending some in at the end. Also, we fund his SEP when we file, so tax time always takes a big chunk out of the budget.
Message 15 of 49
Established Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?

In agreement about not wanting the Fed to hold my money and have use of it all year.

 

I'm getting a minimal refund and it will go to debt repayment.  After all, I've been charged interest on that debt, and I could have used the money yesterday to NOT be charged interest, but the gov't was holding it.

 

In prior years we've owed instead of gotten a refund.  Getting a big refund means you've done something wrong.

_________________________________________________________
Too many accounts; too many debts; lots of open credit, and lots of utilized credit. Scores somewhere in the 600s - I have no earthly idea exactly what number, but not 700 like it was, briefly.
Message 16 of 49
Super Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?

My scenario for those who think they're giving the government a free loan.

 

Joe the taxpayer exemptions was 3 or more to lessen the amount taken out his pay check throughout the year.   Joe the taxpayer took that money and put it in a savings account earning  2 percent in interest.  Things happen throughout the year that prohibited Joe from putting money in his savings some months.  At the end of the year Joe the taxpayer had $2000 in savings and his tax bill is $3800.. Joe the taxpayer earned $40 in interest for the year off the $2000. Joe the taxpayer owes the government and have other debts that are due.

 

Jane the taxpayer exemptions was 0 and the maximum amount was taken out of her paycheck.  Jane the taxpayer paid a total of $2000 in federal taxes throughout the year.  At the end of the year Jane the taxpayer is due a refund.  With all the tax deductions and exemptions, Jane the taxpayer  is due a refund of $4000. With the refund, Jane the taxpayer is able to pay off her debts and not owe the government anything.  

 

Q: Who got the better deal for giving the government an interest free loan?  

A:  Jane the taxpayer

 

Just my opinion

 

 

Message 17 of 49
Established Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?

Nobody said owing a big tax bill is a good thing.

 

Many people don't put money in a savings account throughout the year - they need the money to pay bills and debts.

 

And while Jane was able to pay off her debts with her big payday, she most likely paid interest on those debts throughout the year while Sam was holding her money.

 

The idea is not to owe, or to avoid a minimal refund - I was just saying that getting a big refund probably means that withholdings were not set properly.  Then again, there are people who get huge refunds due to credits given out to very low income people.  Those people also seem to be getting shafted, in my opinion - they could have used that money throughout the year also instead of getting a huge chunk in January when Sam decides to give it to them.  Just an opinional (is that a word?) observation of mine.

_________________________________________________________
Too many accounts; too many debts; lots of open credit, and lots of utilized credit. Scores somewhere in the 600s - I have no earthly idea exactly what number, but not 700 like it was, briefly.
Message 18 of 49
Regular Contributor

Re: Do you plan to use all of your tax return to pay off DEBT?


DI wrote:

 

 <snip>

 

Q: Who got the better deal for giving the government an interest free loan?  

A:  Jane the taxpayer

 

Just my opinion 

 


Sorry, but I don't understand your point - even after reading your post 3 times. How can it be good for me to lend money at 0% interest instead of keeping that money in a savings account that earns, say, 2%? No matter how you slice it, 2 will always be greater than 0.
I've known people who have used tax withholding as a crude budget tool. They say they'd rather make do with smaller paychecks over the course of the year so they can get a big refund check. They're afraid that they'd only fritter away the extra money in their regular paychecks if they decreased their withholding.
But these are people who, by their own admission, are not financially sophisticated & have trouble handling money. I don't have that problem, so why should I let Uncle Sam hold my money until next year when I could be saving & investing it now?
In any case, I haven't revolved a CC balance since 1981, so I have no card debt to pay down with any refund that might come my way.
Message 19 of 49
Moderator Emeritus

Re: Do you plan to use all of your tax return to pay off DEBT?


armymom wrote:
I'm using my refund to go to Germany to see my son and his familySmiley Very Happy.

That is an EXCELLENT use of funds. Smiley Happy

 

I hope you have a wonderful time.

Message 20 of 49