What are you doing with your Tax Return?

[Anonymous]

Filed my taxes tonight. I am actually getting enough to complete both of my financial goals for 2016, which was increasing my emergency fund to a larger amount and pay down my student loan by a lot. Bam! So excited!

[Anonymous]

Congratulations! I am impatiently waiting for my school to send out the final form I need to file.

[Anonymous]

Paying off credit card debt! Some of it, at least. My cards will see a lot of use this week because I'm forced to buy a different car. I recently sold a lemon and have been without any car for almost a month. New job starts on Thursday- definitely will need a vehicle! 

That being said until my next paycheck I will be living off of my credit ( frugally might I add).

[Anonymous]

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@azguy13 wrote:

If you are getting a tax return, what do you plan on doing with it? Personally, I am going to be paying off debt. If you owe taxes, you can donate to my soon-to-be non-profit for a nice tax deduction. 

My non-profit is called the "I will take your donations because I want more stuff Foundation."

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LOL azguy13!

I'm expecting a nice refund but will be saving most of it for my 2017 wedding expenses for my lovely future wife

[Anonymous]

Going to use my refund to take my kids to Disney and then pay some CC's. Hoping I can tweak my tax allowances this year to balance out for next year's return. I'd like my money now vs later

[KiaBec]

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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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Wow I didn't even know that could be done!!!

[KiaBec]

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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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I totally get it and this its a great idea!!! I will definitely look into this for myself!

[KiaBec]

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@azguy13 wrote:

If you are getting a tax return, what do you plan on doing with it? Personally, I am going to be paying off debt. If you owe taxes, you can donate to my soon-to-be non-profit for a nice tax deduction. 

My non-profit is called the "I will take your donations because I want more stuff Foundation."

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I'll be paying off small bills. It took me the last 7yrs to clean up my CR. All derogatories are off. I have no debts except one consolidated student loan (consolidated since '08), which is now in deferment since I'm back in school. And I only have 1 cc, I'm too affraid to apply for another one and i know I have to. My 1 cc is in good standing. But, again I do have small bills to pay. Another thing, I'm single with no dependants so I'm probably not getting much back. We'll see.... I haven't filled as yet, doing that this weekend.

[Anonymous]

Here's what I do not get when people claim less to have more taxes taken out just to get a bigger refund at the end. Essentially what you're doing is giving the goverment an interest free loan throughout the course of the year. Instead, claim more, have less taken out and put the difference in some sort of investment account, something like a cd or even just a savings account. This way you earn interest on that money.

Over the past 13 years I have never received a refund from the goverment but by my calculations as well as my CPA's I come out ahead.

[tacpoly]

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@KiaBec wrote:

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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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I totally get it and this its a great idea!!! I will definitely look into this for myself!

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There are better ways to save than giving the money to the government for a year and not earning any interest on it.  Have you tried doing a direct deposit / automatic deduction into a completely separate savings account?  The people I know who have trouble saving don't have trouble when the money is taken out of their paycheck before they even see it.  This way you at least earn a small amount of interest and if there is a true emergency you wouldn't have to wait to file taxes to get it.