What are you doing with your Tax Return?

[tacpoly]

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@youdontkillmoney wrote:

I always get about $13,000 in tax refunds each year because I label myself as single and wife as well so the most deduction is made to the gov; and I put in an extra $300 each pay period or $600 a month for Federal taxes and an extra $200 each pay period for State taxes or $400 a month, so I pay an extra $1,000 a month in taxes. I do this because I like getting a tax refund each year and it "forces" me to save and not spend what I don't have.

I will be using it as part of a downpayment for a mortgage this year.

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That's an odd way to save, specially as you are not getting any interest while the government has it.  Why not just make automatic deposits into your account?

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@Anonymous wrote:

Take my $5.00 and buy a pack of smokes.

Seriously though, in 2004, I got a $5.xx return.  FIVE. DOLLARS. No joke.

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My accountant and I used to tweak my witholdings or estimated taxes every year so that I owe or get back very little.  I tried not to give too much to the government prematurely, but also not to pay so little that I incurred a tax penalty. 

[azguy13]

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@tacpoly wrote:

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@youdontkillmoney wrote:

I always get about $13,000 in tax refunds each year because I label myself as single and wife as well so the most deduction is made to the gov; and I put in an extra $300 each pay period or $600 a month for Federal taxes and an extra $200 each pay period for State taxes or $400 a month, so I pay an extra $1,000 a month in taxes. I do this because I like getting a tax refund each year and it "forces" me to save and not spend what I don't have.

I will be using it as part of a downpayment for a mortgage this year.

---

That's an odd way to save, specially as you are not getting any interest while the government has it.  Why not just make automatic deposits into your account?

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@Anonymous wrote:

Take my $5.00 and buy a pack of smokes.

Seriously though, in 2004, I got a $5.xx return.  FIVE. DOLLARS. No joke.

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My accountant and I used to tweak my witholdings or estimated taxes every year so that I owe or get back very little.  I tried not to give too much to the government prematurely, but also not to pay so little that I incurred a tax penalty. 

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If you look at it from a savings point of view, that is the perfect way of doing it. You are giving the government the exact amount they should have and no more. Why give an interest-free loan to a government who would never do the same in return? This way, you keep all of your money throughout the year and can invest it or use it for whatever you like. 

[Callandra]

I should be getting something this year...I think I got like $500 back last year. I use Single - 1 for filing...don't know what I'll do. Probably buy some new clothes with half of it and save the other half. 

[youdontkillmoney]

I will be using it as part of a downpayment for a mortgage this year.

That's an odd way to save, specially as you are not getting any interest while the government has it.  Why not just make automatic deposits into your account?

^^^^^^^

I sometimes have no self control and therefore need to force myself to save by not having access to the cash. so I pay extra in taxes understanding theoretically I should not give the gov a free loan and save myself/invest etc.

I seem to be doing ok with the money in my paycheck so I dont need it, and its been working fine for the past few years, getting $13K each year back. Putting it in an IRA locks me out of it if I want to spend it for a home etx (though can make a one time withdraw of $10K).

Anyway, thanks for the advice everyone,.....you are all of course 100% correct. But I think of it as forced savings and not having to pay a surprise tax bill.

[Anonymous]

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@youdontkillmoney wrote:

I will be using it as part of a downpayment for a mortgage this year.

That's an odd way to save, specially as you are not getting any interest while the government has it.  Why not just make automatic deposits into your account?

^^^^^^^

I sometimes have no self control and therefore need to force myself to save by not having access to the cash. so I pay extra in taxes understanding theoretically I should not give the gov a free loan and save myself/invest etc.

I seem to be doing ok with the money in my paycheck so I dont need it, and its been working fine for the past few years, getting $13K each year back. Putting it in an IRA locks me out of it if I want to spend it for a home etx (though can make a one time withdraw of $10K).

Anyway, thanks for the advice everyone,.....you are all of course 100% correct. But I think of it as forced savings and not having to pay a surprise tax bill.

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Perhaps consider a Roth IRA, you can withdraw 100% of your contributions without penalty, at any time.  I just hate to see you shoving all that money off to the IRS.

[Anonymous]

Whatever I get, which won't be much, will either go into my emergency savings or towards my student loan bill. I haven't decided which. Maybe a little to both.

[bdhu2001]

If I get a refund, I'll bank it for emergencies or the new grandbaby expenses.  My first grandchild will be born in April. I'm hoping for self control so that I don't become an overspending grandma.

I've already purchased 2 strollers, car seats, and budgeted for the baby shower (the reason for 2 is 1 for my house and one for the parents).

[Anonymous]

I think you mean tax refund. A return is what you file.

I'll be using mine to pay down my utilization from the holiday's. Fun times. LOL

[thom02099]

Paying for the $4200 new hearing aids that I put on a credit card in December.  I knew I would get a big tax refund this filing year, so it gets paid off in February when my refund hits my bank account. 

Sidebar:  I think it's absolutely criminal that most health care plans don't cover hearing aids at all.  Mine provided a $750 coverage, which I guess is better than nothing.  One more reason to have universal, single payer health care....

[gamegrrl]

I will be putting it towards the $6,500 IRA that I'll be getting.

Without getting an IRA, my refund would be $1,400. If I DO get an IRA, my refund would be $2,900. So I'll get a $6,500 IRA and will only have to take $3,600 from my savings account.