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I told my husband last night I was boycotting the blog this week. Ha! That lasted all of ten hours. I will, however, make this particular post short and sweet.
When we lived in Virginia, the first counselor in our bishopric (who was an accountant or a financial adviser or something) made the comment that you always want to owe the government come tax season. If you're getting a refund, you're not getting that money throughout the year when you really need it. Of course, if you just don't feel like paying, go see Debbie and she'll solve that pesky little problem for ya.
Does anyone know if this is true or have any opinions about it? Obviously, I could ask someone who does accounting-y financial-ish things for his or her job, but that takes time and foresight and time and possibly one more appointment in my already crazy life and, you know, time. And also, I'm afraid that if I go in to discuss tax issues, they'll convince me that I'm not smart enough to be doing my own taxes. I'm not gonna lie, people. Sitting down with all those forms, my trusty calculator, and a few freshly sharpened pencils gives me a bit of a buzz. Seriously.
Anyway, enlighten me please.
6 hours ago
18 comments:
I use Turbotax and do them myself. It's pretty easy. I would do the accountant thing, but I don't keep the greatest records in the world, so that's a problem.
Although, this year, we owe the Feds money, so maybe it's not as easy as I think.
It seems that lately the government is in the business of given us money. As far as taxes go I just do my yearly duty of typing out our mileage so we don't have to pay as much or so we get more back. May the force be with you in your quest for better answers.:)
The main reason you want to owe taxes is because any money the gov refunds you was like an interest free loan to them.
If you are getting a significant refund, you could have instead invested that money and made a little on it.
Or paid down debts and owed less interest.
Personally, I prefer to get a couple hundred dollar refund. That way, I don't have to worry about budgeting for a tax bill, but I am getting most of my money throughout the year.
I agree with Dave. Also, having our taxes withheld all year forces us to simplify and economize, which is a great habit anyway, and when the refund comes, we can use it to pay off some debt or blow it on things we need for the house. Or a little of both!
FIL has explained this to us a number of times (about the interest free loan we're giving the government) and although I "get it" - I just like having that nice lump sum every spring to pay for something that we need (or want)
I swore off of doing our taxes myself back in my Kansas days... innocent mistake... stupid audits... amazingly disproportionate penalties on a TINY dollar difference...
I like owing just a little, teeny, tiny bit. Of course, getting it right is tricky.
Thanks for the linky love. I think this tax avoidance business is going to really take off:)
We only paid 116 dollars into Federal this year...we try to pay as little as possible for that reason.
But, we're still getting like 1300 back because of child tax credits. So, it's not really a refund anyway.
I just do them myself with the Tax Cut program.
I'm no expert, but I disagree because unless you are setting aside money each month into savings that you will use to pay your taxes, you're only accumulating a debt. We have played with our witholdings number a lot and finally got it to where our refund is only small, but we owe nothing. I personally get panicky when I get an unexpected "bill," so I avoid it at all costs.
Well, Steph is right, and I didn't mention that detail.
Not only should you save each month what you need to pay in taxes, but the government expects you to pay estimated tax payments on a balance you think you will owe if you end up owing a certain amount.
That's why I like the withhold just enough to get a tiny refund theory.
And BTW, taxcut has a great online form you can use that gives you audit protection, e-filing, etc. No reason not to do your own taxes unless you have really complicated income, investments, business, etc.
Um, I'm really smart and I love getting money in April so probably getting lots of money in April is good. Oh, and I'm an expert, too. I'm smart, and I'm an expert.
all I know is that I can't believe you love doing your own taxes. I would have a panic attack. There are NUMBERS involved. EW.
Not gonna lie---I still have my dad's accountant do my taxes. I'm so spoiled.
Well, the govt invests the money and earns interest off your $$ all year...so on the one hand, sure, keeping the money for yourself means that you're able to use it and they aren't earning interest off it (ie, you could be earning interest off it).
IMO though, I don't mind paying the taxes and then getting the refund. Here is why
1--there are a lot of govt programs that I take advantage of (um, roads?! public education provides my DH's paycheck!) so I don't mind letting them borrow my money and earn something with it.
2--My budget is tight, so while I can always find a way to use a refund check, I can't always find a way to come up with cash, and just in case I were ever to end up owing, well, it would SUCK!!!
Now I agree with Dave about trying to figure out a way to just get a small refund--give them a little money but not too much, just in case, you know? But I have not figured out how to do that yet. Let me know if you find out!!!!! We're getting 4k this year, and I sure could have used that a few months ago!!
My husband's salary is largely commission, so we always try to hit it at a "small refund," but sometimes it's difficult to judge when his salary is so cyclical.
I use TaxAct on line and it's simple. And I LIKE getting money back every year. It's like a payoff. It's LOVELY!
I don't know if it's true about that, but I'll tell you that I liked getting a chunk back every spring. It became a savings account for me in a backwards way and when my big fat check came in, I'd go buy a computer or a sofa or a whole bunch of clothes. It worked for me but then I married a dude with a decent income and now we always owe. Grr.
Hey, not sure if you checked to get follow up comments, but I answered your questions in my comments.
BTW, is that the proper 'log etiquette' procedure? I'm new to this. Do readers usually expect answers to their comments in the comments to the same post?
Another thing to consider.
This year, Kansas had a serious budget crisis. At one point, they didn't have enough money to make payroll, and they were announcing that no income tax refunds would be issued because they didn't have the money.
That is a great reason to have only a tiny refund or owe just a little bit. They can't keep money they never got.
In other news, we miss hearing from you. I hope all is well.
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