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How are you spending your Tax Refund?

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Moderator Emeritus

Re: How are you spending your Tax Refund?

Heh; I put some numbers into the IRS calculator and it suggested I was going to be underwitheld by 20k this year.

Thought about dressing it up for some number of seconds... nah Smiley Wink.



        
Message 41 of 64
Established Contributor

Re: How are you spending your Tax Refund?


@Revelate wrote:
Heh; I put some numbers into the IRS calculator and it suggested I was going to be underwitheld by 20k this year.

Make sure you pay estimated taxes -- you don't want to have to pay a penalty.

Message 42 of 64
Moderator Emeritus

Re: How are you spending your Tax Refund?


@tacpoly wrote:

@Revelate wrote:
Heh; I put some numbers into the IRS calculator and it suggested I was going to be underwitheld by 20k this year.

Make sure you pay estimated taxes -- you don't want to have to pay a penalty.


Hrm, let me go look into that.  Appreciate the heads up, need to really dig into that calculator and see where it's going so far off vs. 2 W2 gigs.

 

Edit; bleh, total 100% CF on my part.  Refiling W4's.

 

Yup, 20k / ~40 weeks = 500 per paycheck.




        
Message 43 of 64
Senior Contributor

Re: How are you spending your Tax Refund?


@Kforce wrote:

We are a couple of many on the forum who pay the government unfortunately. Smiley Indifferent

You are doing it correctly.

Why overpay and let the government use free money all year.

I try to be close,  plus or minus a few hundred.



I got too much back this year, and am trying to figure how I want to adjust my withholding.   The problem I am running into is that all the online calculators seem to want you to have pretty much the same income with every paycheck.   I don't have that, both DW and I are paid Biweekly and get paid commission once a month.   So we get one check for 80 hours and one check for 80 hours + commission.    The witholding on our commission payouts is a straight 25% for federal.  

 

As to what I did with my refund.   Some of it went to pay off some 0% deals that will be expiring soon and the rest was supposed to go into savings for future vacations.   In stead of going into saving we ended up needing to buy a car so it went to the down payment instead. 




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Message 44 of 64
Senior Contributor

Re: How are you spending your Tax Refund?

Refund? I don't pay taxes, only little people pay taxes! (A quote from Leona Helmsley, aka the "Queen of Mean" to a housekeeper who testified to that at Helmsley's tax fraud case, which she lost. You don't mess with the IRS, and from my experience from an audit many years ago, they have absolutely no sense of humor.)

 

Actually I don't pay federal income taxes, I'm semi retired with Social Security and continue to work part time for the local county because I enjoy it. So my taxable income isn't high enough to make my SocSec. taxable. I do have state income tax withheld even though I claim 3 exemptions on my W-4 while single to try to avoid having tax withheld because I think letting the government have your money all year for free is the worst savings plan ever. So I filed as soon as I had all my W-2 and 1099s (from bank bonuses), and got my state tax refund this week, already in my savings account.

 


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Message 45 of 64
Valued Contributor

Re: How are you spending your Tax Refund?

Thank god I got money back this year, I looked at estimated tax returns and it was all over the place. Got 3k back, stuffed that in savings and now wondering where I should move all the cash (in savings) I'll probably invest it or do something. For those that aren't getting refunds or owe, I have been there. It sucks. I remember back in 2016, I owed 6K, and prior to that, when I had businesses, I always owed. But it is what it is.


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Message 46 of 64
Regular Contributor

Re: How are you spending your Tax Refund?

I read that the IRS is waiving penaties for TY 2018. Please verify that as I don't remember the source. 

 

Early in 2018 after learning details of my *tax cut* I sent some number to the CPA for projections. He started me on quarterly estimated payments to avoid underpayment. My medical for 2018 was unusually high. There was a small credit that he applied to current year.

 

My income doesn't justify a tax accountant now. He's been doing the work for decades and is a source of excellent information. I don't want to navigate tax law on my own so I continue with him. The peace or mind is well worth the few extra dollars for me. 

Message 47 of 64
Senior Contributor

Re: How are you spending your Tax Refund?

Not quite "waiving penaties for TY 2018", but lowering the under payment amount to be subject to a penalty:

https://www.irs.gov/newsroom/irs-waives-penalty-for-many-whose-tax-withholding-and-estimated-tax-pay...

 

January 16, 2019

WASHINGTON — The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

The waiver computation announced today will be integrated into commercially-available tax software and reflected in the forthcoming revision of Form 2210 and instructions.


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Message 48 of 64
Moderator Emeritus

Re: How are you spending your Tax Refund?


@DaveInAZ wrote:

Not quite "waiving penaties for TY 2018", but lowering the under payment amount to be subject to a penalty:

https://www.irs.gov/newsroom/irs-waives-penalty-for-many-whose-tax-withholding-and-estimated-tax-pay...

 

January 16, 2019

WASHINGTON — The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

The waiver computation announced today will be integrated into commercially-available tax software and reflected in the forthcoming revision of Form 2210 and instructions.


It's utterly lame they still have yet to update the W4 form.




        
Message 49 of 64
Contributor

Re: How are you spending your Tax Refund?

Put all of it onto our cc. Tired of debt.
Message 50 of 64
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