What do you do with your tax return?

asp40

Wed, Mar 25 2015, 9:06 am

Every year is different (we do not always get a refund) Usually put it into savings as use it for tuition, home repairs, emergency fund, etc . . . We have never used it for something "fun"

tigerwife

Wed, Mar 25 2015, 9:08 am

I'm redoing four years of taxes (yes, I know that sounds ridiculous) and I hope to be making a lot back in returns. It'll probably go towards our 'buy-a-house' fund. OTOH, I'm quick to spend on extras randomly, so putting away extra money that was not part of budget makes sense to me. It's not like I've been holding back from splurging on myself till now.

amother

Puce

Wed, Mar 25 2015, 9:15 am

It looks like I'm getting back more than 10k this year bh. Thing is I have lots of student loans (one in particular that I'd love to just get rid of because it's a variable interest rate and seems to never make a dent in principle when I make large payments) but I would love to save for a car (right now lease because didn't have the money to put down to buy) and don't have near enough for a downpayment yet either. Bh manage to get most of what I want when I want it (though we don't end up saving a lot on a regular basis). I also don't know how much longer my job will be around so I don't know if it's smart to actually spend it.

imasoftov

Wed, Mar 25 2015, 9:24 am

I think you mean tax refund, not tax return. A tax return is the form you send the IRS and your state tax authority detailing your income, deductions, etc. That might result in your receiving a refund ...

TwinsMommy

Wed, Mar 25 2015, 9:28 am

Why are people getting $10,000 refunds? Why not just increase withholdings on w4 and avoid the interest free loan to the govt?

supty

Wed, Mar 25 2015, 9:36 am

TwinsMommy wrote:

Why are people getting $10,000 refunds? Why not just increase withholdings on w4 and avoid the interest free loan to the govt?

Yes! If you're getting paid on a w-2 and you're getting $10,000 refunds you should DEFINITELY adjust your w-9 for this year and you can be netting much more per month!!

amother

Puce

Wed, Mar 25 2015, 12:03 pm

I'm paid on a 1099 so pay quarterly taxes. It was estimated based on my income last year but I made less this year and had a baby and other deductible expenses. I now have the choice to adjust again for coming year but would rather withhold more (well keep set aside for taxes just in case) than have an unpleasant surprise come tax season next year. So far this year I've made a lot more than this time last year but I'm going to be taking HUGE pay cut in coming months due to less available work and prefer no unpleasant surprises so....

amother

Puce

Thu, Mar 26 2015, 12:49 am

So much for that. Accountant screwed up so now I really have to figure out which is most important because I'm not getting back nearly that much (if anything? dunno yet).

m in Israel

Thu, Mar 26 2015, 4:02 am

We try very hard not to get any tax refunds at all -- I really do not feel like giving Uncle Sam interest free loans. . .
Most years we are successful and actually owe a bit of tax when all is said and done. . .although we have gotten some tax refunds, in which case we didn't view it any differently as the rest of our income -- we spend/saved according to what we do with all the income we get.

amother

Cobalt

Thu, Mar 26 2015, 7:26 am

I prefer to get a 10k refund and give the government an interest free loan rather than net more bimonthly due to my sheer lack of discipline when it comes to saving. Granted, I do put away a decent amount each year but somehow I think I would save a few thousand less if I didn't use tax refunds for this purpose.

Half of our refund is going to a new sheitel and camp, and the other half directly to our high yield savings account.

MrsMarmite

Thu, Mar 26 2015, 7:51 am

We pay off a chunk of debt and use the rest to pay for day camp in the summer.
I would much rather get a few thousand at once than a little bit extra every week - if we got it weekly, it would be gone on regular bills and I'd feel like I never even saw it.
by the way, we didn't have medical insurance for a few months last year and just found out we're getting fined on our taxes b/c of obamacare. not very happy. anyone else have that?

m in Israel

Thu, Mar 26 2015, 8:04 am

It is possible to set up automatic transfers from your checking account into savings or investment accounts. If the issue is a lack of discipline, set up something like that to go out on the same day that you get your paycheck. The end result will be the same as withholding taxes -- there will be less money in your account -- and the "tax" money will begin working for you immediately. By the end of the year your "tax refund" will be sitting in your own savings account with an extra year of interest in addition.

m in Israel

Thu, Mar 26 2015, 8:06 am

MrsMarmite wrote:

If you have debt that alone is a reason to not give out loans to other entities! Why don't you make an automatic payment towards your debt scheduled to come out of your account when you deposit your salary, instead of having that money going go the government?

amother

Coral

Thu, Mar 26 2015, 8:36 am

Some people get a large refund because they are not earning enough on the books, so they can't take bigger paycheck all year as there isn't one....

My accountant summed it up for me, the Gov't awards those who don't work or cheat.

Many who receive $10,000 refunds are because of EIC, combine that with child tax credits and the standard deductions any family filing a small amount of income is getting a HUGE check.

Not all who get that are cheating, some legitimately make very little and the 'refund' is not a refund but a gift from uncle Sam.

It's the not on the books earners that are working regular jobs, not paying taxes and getting huge bonus checks every April that are the issue.....

m in Israel

Thu, Mar 26 2015, 8:39 am

amother wrote:

Good point. Obviously if your "refund" is not a refund at all but government credits, then that is a different story.