Tax Season - Get A Little or Get A Lot

[Frezzato]

So tax season is here in the US and I asked around at work, curious as to how much everyone was getting back. It's no surprise that married people get thousands back, but the few single people I've met had at least two things in common:

They don't do their own taxes and
They also are getting thousands back

This struck me as very odd seeing how I've never gotten back more than $300 each year after filing taxes (myself). And it got me wondering that I've possibly been doing them wrong my entire life, which is probable, OR I've been doing them right. There's quite a lot of shady businesses where I live and seeing how the local sport is drunk driving/hit and run incidents, it's not a stretch to think that there are less than 100% honest tax preparers doing taxes for friends and family (and stretching the truth). But then I got to thinking that perhaps most folks WANT to get a large amount withheld so they can get a large payoff a year later.

My question is this - do you want to pay less taxes and have access to slightly more money every month throughout the year or do you prefer to get a large payoff after a year has passed, knowing you've given the government an interest-free loan for the previous 365 days?

 

[tippy2k2]

It depends on your definition of "right".

A lot of people like myself like putting the max for taxes and then getting a big refund. I see it as half savings account and half not having to worry about it.

However, the "official" smart play is to get that return to as close to 0 as possible. Too little and you're giving yourself a headache as you have to pay but too much and you're getting nothing from your money. It's sitting in the government not collecting interest or making you money through an investment.

 

[Fappy]

I got around 3.3k back IIRC. I used an accountant, but he honestly didn't get me much more than I could've gotten myself. I was unemployed for nearly 6 months last year, however, so my refund is probably a good bit higher than it normally would be.

 

[Frezzato]

snip

Yeah, I like the idea of a deferred payoff, but I keep forgetting that when I set up at a new workplace, which is dumb, I know.

I got around 3.3k back IIRC. I used an accountant, but he honestly didn't get me much more than I could've gotten myself. I was unemployed for nearly 6 months last year, however, so my refund is probably a good bit higher than it normally would be.

But...how??? That settles it. Next year I go to an accountant, but like a real one, not a family "friend" that so many people seem to consult down here.

 

[Fappy]

snip

Yeah, I like the idea of a deferred payoff, but I keep forgetting that when I set up at a new workplace, which is dumb, I know.

I got around 3.3k back IIRC. I used an accountant, but he honestly didn't get me much more than I could've gotten myself. I was unemployed for nearly 6 months last year, however, so my refund is probably a good bit higher than it normally would be.

But...how??? That settles it. Next year I go to an accountant, but like a real one, not a family "friend" that so many people seem to consult down here.

Like I said, I was unemployed for half the year. I think it put me in a lower tax bracket for the year or something. Fuck if I know lol.

 

[DrownedAmmet]

It depends on your definition of "right".

A lot of people like myself like putting the max for taxes and then getting a big refund. I see it as half savings account and half not having to worry about it.

However, the "official" smart play is to get that return to as close to 0 as possible. Too little and you're giving yourself a headache as you have to pay but too much and you're getting nothing from your money. It's sitting in the government not collecting interest or making you money through an investment.

I do the same thing, I like getting a bunch of "free" money at the beginning of each year, makes me more likely to buy myself something nice for myself, which is something I hardly ever do, hence why I am currently sporting one of those fancy GPS fitness tracker watches

To the OP, talk to your payroll guy where you work and tell him you want more taken out for taxes, all it is is a matter of how much of your money gets set aside versus how much you actually need to pay

 

[MysticSlayer]

None of my income was taxed, so...

 

[Elfgore]

About 1K here when it all came together. Used Turbotax for it. I ain't complaining, got me a nice computer monitor, a new mattress, and a new phone.

Better than I got last year when my old job didn't take out school taxes and my new job forgot to charge me federal taxes for three months.

 

[WolfThomas]

As a rule as others are saying you don't want to get a large refund solely by paying too much tax. That's lost earning potential from that money, even if you just consider interest. If you really want some sort of savings account...get a savings account. Something long term that you deduct money into and don't touch. That way you'll get interest and have it incase of an emergency.

But you do want to get money back on tax deductions, which is an area people really don't claim enough. Anything you have to buy related to your job should be tax deductible. That means you get a bit of that cash back at the end of the year.

 

[Eclipse Dragon]

I always get around $600 or so, it almost never strays too far from that point.
I work full time[footnote]40 hours a week[/footnote], claim 0[footnote]so the max gets taken out of my paycheck[/footnote], I'm also unmarried and in the middle class bracket[footnote]which makes health insurance frustratingly expensive[/footnote].
At least I don't end up owing, so that's a relief.
I use an accountant.

Thanks to a stint of bad health in which I ended up almost drowning in my own medical bills however, I should get some nice deductions next year

None of my income was taxed, so...

It's pretty bad that even when I went to an agent to change my medical insurance, he said the best way to make money in this country is to work for yourself and keep as much money away from Uncle Sam as possible. Though he did add the caveat of working maybe 25 or so hours a week, so it looks like you're making something on paper, but not enough to get you into higher brackets.

 

[Nielas]

. Anything you have to buy related to your job should be tax deductible. That means you get a bit of that cash back at the end of the year.

Careful with that. If you are self employed or a contract worker, you can deduct a lot for work expenses. If you are on salary or wages you should really consult your local tax code before claiming work expenses since the eligibility rules are different. Plus for many things only a certain percentage can be claimed if it is deemed to be both a work and personal expense.

 

[Ryotknife]

Usually I get a tax return from federal which cancels out the money i owe to state. I rarely go positive, and when i do its a few hundred dollars. I have yet to owe money to federal, but state charges me hundreds of dollars no matter how little I make. I made around 5k one year and still owed state 400 dollars.

Your returns are going to be based on what state you live in. NY extorts as much money as possible and doesnt give a damn how little you make. Western NY has some of the highest property taxes in the country, and we are among the poorest too.

 

[brahm]

getting nothing this year, back taxes

 

[Remus]

$46. I think 30 from Fed, 16 from state. Yea, I don't have kids or anything that would calculate into a higher refund and none of my income was flatly added to the refund, which is a stupid premise tbh. I needed every dollar. For the people in my family that do have a home and are barely holding on with a deathlike grip, my income meant we could have Christmas, and Thanksgiving last year.

If you make as little as I did, there should be additional brackets in the AHA to account for people who work 40 a week and still cannot pay their own living expenses. Now the year prior I had only made about $4500 from my new job so did fall under the AHA and got the low income tax benefit, which netted over $500. Again, this benefit should be bracketed. With my income, I did however fall under the tax benefit on the healthcare website - it deducted $296 from healthcare expenses so I could get good insurance for around $45 with no deductable - immediate payout on health expenses if you're not keeping up. But I snuck above the bar for my refund so no joy.

 

[WolfThomas]

. Anything you have to buy related to your job should be tax deductible. That means you get a bit of that cash back at the end of the year.

Careful with that. If you are self employed or a contract worker, you can deduct a lot for work expenses. If you are on salary or wages you should really consult your local tax code before claiming work expenses since the eligibility rules are different. Plus for many things only a certain percentage can be claimed if it is deemed to be both a work and personal expense.

Well yeah obviously subject to whatever the local rules are. I have an accountant and I'm sort of a contractor/sort of. So he tells me what I can claim and then I do. And paying him is less than the money I save through all the magic he does. Which is all legal and above board but takes advantages of different tax rates, trusts etc.

 

[sneakypenguin]

I think this year we paid 1,100. Just didn't have them take out enough from our checks. Also didn't help that I didn't claim the 10% I give to charity or put as much into my retirement as last few years.

Also I'm pretty sure there is a marriage penalty . If you file our incomes separately I get money back. I guess our combined income puts us in a high tax bracket.

 

[Shoggoth2588]

I had to pay the government $300 this year...I'm still trying to recover from that emotionally...It's the first time I've owed and I'm sure it won't be the last but it does hurt to hear about people getting back thousands...not that I've ever gotten back thousand, let alone thousands. I use turbotax to file for myself and...I dunno, I think I'm already mentally blocking out how I did it. I kinda just followed along with the program which, up until this year, has resulted in a refund.

 

[lechat]

Australian so my tax stuff is different but I agree that if your money is sitting in the government coffer then it is being wasted, Having said that I expect to get at least a few grand back back based on the fact that I clock up a large amount of overtime and have a fair amount of deductions.
If there was something I could do to keep that money in my hands for the year to work against my mortgage or sit in a high interest account I would do it but unfortunately the way the Australian tax system works I have to pay it to the government for 12 months and get it back once I do a bunch of paper work.