Jument:
FWIW IMHO you should always owe at the end of the year, as much as you can get away with. Whoever holds the money earns interest or investment income on it. Better that it's you than the IRS. Of course, if you owe a lot of money at the end of the year and you weren't expecting it, I guess that's much worse.

I, like most people, don't trust myself to squirrel away a roughly appropriate amount of money to pay my taxes at the end of the year. Owing anything on your taxes sucks, and the meager interest (taxable as income) I'd earn on the money over the year does not offset the convenience of the gov't making sure I don't accidentally spend money that I'll owe them later.

Kind of pathetic, but it avoids nasty May shockers.

JackieRabbit: An advisor showed me how increasing my contributions would not only lower my tax liability, but but also put an extra $220 in my paycheck each month because of this. Sweet.

Care to elaborate? Given the marginal nature of tax brackets I don't see how this can be.

I'm a huge procrastinator so I just e-filed today. A couple years ago I adjusted my withholdings so I'd take home more money throughout the year and would break even on taxes, if I didn't own a house and have student loan debt. Those net me a nice refund :-)

Also, I like having no state income tax.

I should be in the kitchen: I'm a huge procrastinator so I just e-filed today. A couple years ago I adjusted my withholdings so I'd take home more money throughout the year and would break even on taxes, if I didn't own a house and have student loan debt. Those net me a nice refund :-)

Also, I like having no state income tax.

I just bought a new car last month. I like having no state sales tax.

No Such Agency: Jument:
FWIW IMHO you should always owe at the end of the year, as much as you can get away with. Whoever holds the money earns interest or investment income on it. Better that it's you than the IRS. Of course, if you owe a lot of money at the end of the year and you weren't expecting it, I guess that's much worse.

I, like most people, don't trust myself to squirrel away a roughly appropriate amount of money to pay my taxes at the end of the year. Owing anything on your taxes sucks, and the meager interest (taxable as income) I'd earn on the money over the year does not offset the convenience of the gov't making sure I don't accidentally spend money that I'll owe them later.

Kind of pathetic, but it avoids nasty May shockers.

There are interest bearing ways that you can lock the money away for a year and have someone else keep the key.

Short Term CDs (new window)

Pincy: I should be in the kitchen: I'm a huge procrastinator so I just e-filed today. A couple years ago I adjusted my withholdings so I'd take home more money throughout the year and would break even on taxes, if I didn't own a house and have student loan debt. Those net me a nice refund :-)

Also, I like having no state income tax.

I just bought a new car last month. I like having no state sales tax.

I like a state sales tax, because I can write it off of my federal income tax.

No Such Agency: Jument:
FWIW IMHO you should always owe at the end of the year, as much as you can get away with. Whoever holds the money earns interest or investment income on it. Better that it's you than the IRS. Of course, if you owe a lot of money at the end of the year and you weren't expecting it, I guess that's much worse.

I, like most people, don't trust myself to squirrel away a roughly appropriate amount of money to pay my taxes at the end of the year. Owing anything on your taxes sucks, and the meager interest (taxable as income) I'd earn on the money over the year does not offset the convenience of the gov't making sure I don't accidentally spend money that I'll owe them later.

Kind of pathetic, but it avoids nasty May shockers.

Yes, that is kind of pathetic. You're basically paying the IRS to protect you from yourself. If that floats your boat, good for you. I would never do that. I would also never freeze my credit card in a block of ice or not have a credit card at all because I'm all growed up. :)

Rent Party: If you're getting a huge return, it's not helping you, it's hurting you.

While I understand the math no less than 100%, I prefer the return. I know for a fact I lose money. I really do. However, I think of it the same way as I think of paying the low balance bills before the high interest bills: it FEELS better. There is less mental reward for smart financial moves than there is for financial moves that look like game changers. Sad, but true.

I got about $350 back. It immediately went in the savings account so it will be there when I have to renew my car registration and smog check in July (which will roughly cost $350). My fella got kind of screwed (none of it his fault, he is an innocent bystander) but he's working it out.

This Looks Fun: Rent Party: If you're getting a huge return, it's not helping you, it's hurting you.

While I understand the math no less than 100%, I prefer the return. I know for a fact I lose money. I really do. However, I think of it the same way as I think of paying the low balance bills before the high interest bills: it FEELS better. There is less mental reward for smart financial moves than there is for financial moves that look like game changers. Sad, but true.

Two solutions that will provide better economic return *and* the mental reward....

Better Economic Return (new window)

Mental Reward...



Seriously. There is a much deeper satisfaction to watching savings grow than there is to a big check once a year that you could have had, anyway. Getting over the "how much is there in there now" curiosity and "I could just spend a little of it on a new guitar" phases is hard, but it's doable, particularly if you take advantage of something like CDs.

Did ours in Feb.

Fairly sizable refund.

/woot.

Rent Party: Pincy: I should be in the kitchen: I'm a huge procrastinator so I just e-filed today. A couple years ago I adjusted my withholdings so I'd take home more money throughout the year and would break even on taxes, if I didn't own a house and have student loan debt. Those net me a nice refund :-)

Also, I like having no state income tax.

I just bought a new car last month. I like having no state sales tax.

I like a state sales tax, because I can write it off of my federal income tax.

Ya, on that federal schedule A I fill out I get to include my state property taxes.

YixilTesiphon: JackieRabbit: An advisor showed me how increasing my contributions would not only lower my tax liability, but but also put an extra $220 in my paycheck each month because of this. Sweet.

Care to elaborate? Given the marginal nature of tax brackets I don't see how this can be.

This really has little to do with marginal brackets. 401(k) contributions are taken off the top of your reported income. They are exempt from taxation until they are distributed. So if you have an additional 5% of your salary withheld as 401(k) contributions, you can lower your tax withholding to compensate. Even if you don't, the amount withheld will be too much and you'll get it back at the end of the year.

Here's where tax brackets come into play. Say you got a raise and that put you just barely inside the next higher tax bracket. Your tax goes up accordingly, obliterating any net from your raise. Your net can actually go down (happened to me twice). But if you increase your 401(k) contributions (if you're not already at max) by whatever portion of your raise that puts you into the next bracket, you can avoid the additional tax liability. The other side of that coin is if you are near the top-end of your tax bracket and you take a non-qualified, taxable distribution from your 401(k). That can throw you into the next tax bracket and increase your liability. I had to do this in connection with a real-estate transaction a couple of years back. I hated to do it, but it had to be done. It didn't change my bracket, but it did end up costing me an additional $6K in taxes. But that's nothing. I knew a guy who did this without consulting an attorney or an accountant. It cost him $22K and he didn't need to take the distribution.

Jument:
Yes, that is kind of pathetic. You're basically paying the IRS to protect you from yourself. If that floats your boat, good for you. I would never do that. I would also never freeze my credit card in a block of ice or not have a credit card at all because I'm all growed up. :)

I said it was pathetic, what more do you want? I'm "growed up" enough to know my limitations and not having to make sure I deduct enough from each paycheck to cover my taxes means one less thing to deal with every month. RevCan provides the service of deducting my taxes correctly, and I "pay" them for it. I do my own taxes every April, so I'm not paying anyone for that service, which saves some money.

Rent Party:
Short Term CDs (new window)

If I did that, I'd just put it in a high-interest ING account.

JackieRabbit: Here's where tax brackets come into play. Say you got a raise and that put you just barely inside the next higher tax bracket. Your tax goes up accordingly, obliterating any net from your raise. Your net can actually go down (happened to me twice).

This is not how tax brackets work.

JackieRabbit:
Here's where tax brackets come into play. Say you got a raise and that put you just barely inside the next higher tax bracket. Your tax goes up accordingly, obliterating any net from your raise. Your net can actually go down (happened to me twice).

Want to know how I know you're full of shiat?

/ Tax brackets don't work that way.

No Such Agency:
Rent Party:
Short Term CDs (new window)

If I did that, I'd just put it in a high-interest ING account.

If you put it in CDs, you can't get at the cash until the CD matures. You get the exact same effect as you do letting the government hold it (that is, I can't take it and spend it) but it still bears interest for you.

Did them today while at work. Paid $43 to feds, got $760 back from state. It only took 30 min so I don't know why I continuously procrastinate.

Rent Party: JackieRabbit:
Here's where tax brackets come into play. Say you got a raise and that put you just barely inside the next higher tax bracket. Your tax goes up accordingly, obliterating any net from your raise. Your net can actually go down (happened to me twice).

Want to know how I know you're full of shiat?

/ Tax brackets don't work that way.

I wonder why so many people have difficulty understanding that it is never possible to receive a wage increase that will lower your total take-home pay due to moving into a higher tax bracket. I really never thought it was that complicated of a concept.

Pincy, Rent Party, JackieRabbit:

No, unlike you idiots and the rest of the morons, I'll pay no tax. YOU pay YOUR taxes. I am a total leech, just like the American government. Difference is, you guys are morons and I have my money put away. Good luck, suckers!

Just got mine done because I hate taxes and love procrastinating. Owed the state of Arizona $49...but since I moved and went back to school, I'm getting $1550 back from the feds.

I am seriously happy.

pdieten: Rent Party: JackieRabbit:
Here's where tax brackets come into play. Say you got a raise and that put you just barely inside the next higher tax bracket. Your tax goes up accordingly, obliterating any net from your raise. Your net can actually go down (happened to me twice).

Want to know how I know you're full of shiat?

/ Tax brackets don't work that way.

I wonder why so many people have difficulty understanding that it is never possible to receive a wage increase that will lower your total take-home pay due to moving into a higher tax bracket. I really never thought it was that complicated of a concept.

Because people are morons, basically. I mean, look at the clown directly below your post. That dumbass can't differentiate between filing his return and paying his taxes. That means he's either unemployed, a criminal (same thing) or working under the table. All of which == "poor" so who gives a fark.

Rent Party: Seriously. There is a much deeper satisfaction for Rent Party but not for This Looks Fun to watching savings grow than there is to a big check once a year that you could have had, anyway. Getting over the "how much is there in there now" curiosity and "I could just spend a little of it on a new guitar" phases is hard, but it's doable, particularly if you take advantage of something like CDs.

When you understand the bold text I added to your post, you will know this is a pointless argument to have with me. I have a math heavy computer science degree. I know the facts. I prefer what I perceive as something more rewarding. It feels better to me. You have to accept that some people know under no uncertain terms that they are giving the government an interest free loan and getting lower-value money back (due to inflation), thereby losing money twice (via not investing and inflation). We know this and seriously don't care.

This Looks Fun: Rent Party: Seriously. There is a much deeper satisfaction for Rent Party but not for This Looks Fun to watching savings grow than there is to a big check once a year that you could have had, anyway. Getting over the "how much is there in there now" curiosity and "I could just spend a little of it on a new guitar" phases is hard, but it's doable, particularly if you take advantage of something like CDs.

When you understand the bold text I added to your post, you will know this is a pointless argument to have with me. I have a math heavy computer science degree. I know the facts. I prefer what I perceive as something more rewarding. It feels better to me. You have to accept that some people know under no uncertain terms that they are giving the government an interest free loan and getting lower-value money back (due to inflation), thereby losing money twice (via not investing and inflation). We know this and seriously don't care.

Well, I guess we can categorically say that your math heavy computer science degree didn't cure you of being emotionally driven and acting in an irrational manner.

Are you a woman?

Filed a couple weeks ago. HR Block online, not because I'm too stupid to figure out taxes the old-fashioned way - it's not that hard if you have income from wages from one job, no house and no kids - but because filing online is faster. I'd be fine doing it on paper, but electronically has advantages paper doesn't. Got refund (about $600) last week.

No sweat.

rent party: NOT paying enough taxes. STFU and pay your 'Fair Share'. Deadbeat.

I got my ''you gonna get raped" sans lube completed a few weeks back... Check is in the mail. I love how I pay a higher tax rate than the President, yet make a mere fraction of what they did. Where's the liberal outrage? I hear no OWS protesters hollering about the President 1%er... Time for him to put his money where is mouth is or GTFO. I know who I am not voting for this fall.

sammyk: The thing is she is the younger hotter wife I traded the last one for.

I'd say a year's worth of anal on every payday should even the score.

Abe Vigoda's Ghost: Rent Party: Harmania: Owed the fed about $850, the state about $650. On income around $20K.

I told my girlfriend that if I can write those checks and still be a liberal, I must actually mean it.

You have an effective tax rate of 4%, given those numbers. You should be dancing in the streets after writing those checks.

You should also re-think your withholdings. Unless you like loaning out interest free money.

It was all fair pool. Part of the year I was paid by fellowship stipends - income, but not wages. Taxable, but not taxed in the checks. I socked 15% into savings each month. Could have shot for some kind of 6-mo. somethingorother, but I had other work to do. I also did a summer job in a reciprocal state, so I owed my home state taxes that weren't paid up-front to the state I worked in. Also had money in savings.

Like I said, fair pool all around. Still big numbers on checks for a graduate student.

Post office? who mails their returns anymore?

Every year I send my tax file in May. I'm always owed a refund, so I assume this is why it's never been a problem.

DrippinBalls: Pincy, Rent Party, JackieRabbit:

No, unlike you idiots and the rest of the morons, I'll pay no tax. YOU pay YOUR taxes. I am a total leech, just like the American government. Difference is, you guys are morons and I have my money put away. Good luck, suckers!

Isn't it fun to pretend you are a law-skirting vigilante on the Internets?

This year for the first time I filed for an extension. Had a very bad year last year and for the first time ever had a lot of unreimbursed medical bills (copayments) that would qualify me for medical deductions. I've never disclosed this on FARK but I was hospitalized three times last year for severe depression, including two deliberate prescription drug overdoses; one which landed me in the ICU with aspiration pneumonia for two weeks in a fairly unconscious state. Thank god I am much better now. On some good meds. Depression really sucks. Don't want to get that way again...

The good news is that there was no line at all at the Post Office (thanks, Psychiana, for getting us a first-class Post Office). We walked in and had our choice of two clerks right away.

The bad news: we were there to file extensions and pay estimated taxes for four states and the feds.

My accountant misspelled the word Treasury on the mailing label. "Tressury"...really? No spell check on that computer?

sammyk: The wife started a new job Feb 2011. She checked exempt on her W-4. 6k tax bill. This is immediately after I spent the last year getting our credit card debt down to zero.

So I ask you fellow farkers. What should her punishment be?

Not sure if anyone gave you a serious answer yet, but the truth is that you should thank her, presuming you two have shared finances.

For 11 months of her job the non-withheld 6k+ help you out. During this time you were able to remove your credit card debt. Credit card debt interest is ridiculously high. On the other hand, the IRS will allow you to open up an account with them and pay with installments at a much lower rate. So your wife's action has saved you a good deal of money.

I hope you buy her something nice with it.

sammyk: The wife started a new job Feb 2011. She checked exempt on her W-4. 6k tax bill. This is immediately after I spent the last year getting our credit card debt down to zero.

So I ask you fellow farkers. What should her punishment be?

Are you complaining that your wife didn't give the government an interest free loan?

I_C_Weener: The election, all elections, should be the day after Tax Day.

YES! Unfortunatly, the people on the fence aren't paying any taxes outside of payroll.

Rent Party: Well, I guess we can categorically say that your math heavy computer science degree didn't cure you of being emotionally driven and acting in an irrational manner.

Are you a woman?

"Categorically" doesn't mean what you think if you think that knowing my tax strategy means you can apply it as being "categorical." No, I am not a woman, but I also use words I understand.