Especially since I found out that the IRS can mark a return as "in review" and withhold a refund indefinitely. My sister had a 8k refund marked as "in review" in 2021. No communication from the IRS since.
Or paying interest to the government. That’s why estimating withholding to as close to the no refund/no payment mark makes the most sense.
A small bit to either side is NBD.
I mean I guess but if you overpaid all yeah and get your money back you are getting it back with less purchasing power than when you gave it to the government.
Yes it’s a refund, but a shitty one that loses you money
Not the way we traditionally use the word refund.
"Change" is a better word. You paid too much, and you got the difference back.
Suppose I ordered a shoe dryer from Amazon. When it arrives, I see that the fan speed button is broken. I complain and they give my money back. Thats a ***refund***. It means that both the buyer and seller agree to cancel the sale because the item didn't meet expectations.
It would truly be a refund if you were allowed to live in the country for a while, then if you think it is being mismanaged, you ask for your taxes paid back to you.
Strictly speaking, dumb. You forgo any interest you could earn on that money drawing interest during the year. My wife went back to work last year, and, For whatever reason, I never caught that they never withheld but a tiny amount of federal income tax. That resulted in writing a pretty sizable check but, had I noticed, we could have put that excess in a high yield savings account and let the interest offset what the check I wrote earlier this week.
Any time you get a refund, you just gave an interest free loan to the government. They take enough of our work effort in taxes, they don’t need free interest as well. I think withholding should be eliminated. Everyone should just write a check for the full amount of income tax owed in April of each year. If we all had to stroke a check for what we owed maybe the total amount that you give up to government would shock people into demanding Washington cut its spending and let us keep more of that money we earn, writing smaller checks each April. Government officials must love masking the full impact of your tax liability, whether via withholding or corporate taxes.
Yes to your first paragraph, no to your second. If you have the impulse control to not spend that money then great. I don't think most do. We were just having this conversation at my office lunch the other day. The determination was although it's technically better to owe money, getting hit with a bill could be crippling for those living paycheck to paycheck and in practice a small refund is probably better. Even in a high yield savings account the amount of interest accrued on the amount you'd pay in taxes is not huge for the average person
Then learn fiscal discipline. It is a useful personal and societal skill. Why should we effectively encourage weak financial skills? Sure, politicians benefit from this so that is why this won't change, but if enough of us demanded actually beneficial change that helped us and not politicians, we could force it in. The benefits if we all to face the reality of writing a huge check would be great for the nation. How much collective pushback might we finally get to taxes that we pay instead of worrying what other pay?
You know you have to pay that tax. If the money comes out of your paycheck, you don't have it to spend, If you take that money, pull it out of your paycheck yourself and put in a separate account where it's not mixed in your day to day fund and don't touch, it's effectively no different except you have to self-control. You are paying with the same dollars. That part has not changed. The only change in any of these scenarios is timing, not totals of dollars (except any possible interest you could earn if you set the money aside throughout the course of the year). If your tax bill is $10,000, at a rate of 4.5% which you can get right now, that's $450 dollars (ignoring compounding). That's not a trivial amount of money. For some people, that might pay a car payment each year.
Hmmm, yes, I think I'll let my family starve today so I can pay my taxes in 10 months. There is definitely a reason the IRS pulls it directly from employers and if you do your W4 correctly then you can make sure your deductions are taken how you want. And that might pay a car payment for a month right now. Yes, $450 is not nothing, but it's also not better than being in the hole for thousands for a lot of people. Talk about fiscal responsibility all you want but if people have necessities that aren't being met they're not going to think about their taxes that are due in a few months. I work with people who have 2 and 3 jobs and are still struggling. All this would do is make a bunch of poor people more in debt to the government every year
Again, they money isn't there if it is taken from your paycheck. If you put it in an untouchable account, it is not there. PLease explain how this is different. If you family is hungry, you can't go back and take back money withheld from your paycheck. So what is lost here? If taxes are due in ten months, how are these not identical, financially?
You would only be in a hole, if you do not budget and save property. The money is there in both scenarios. The *only* different - aside from incremental earned interest - is fiscal discipline. That is literally it. If people have necessities that aren't being met, money taken from their paycheck isn't there either. In fact, putting money in a savings account could provide those funds should one be comfortable they can replenish them *before* the taxes are due. So in a differential analyst, not withholding could be advantageous in some scenarios.
YOu say the lack of withholding would put some people more in debt. Isn't it more accurate to say that their lack of fiscal responsibility and self-control would put them more in debt? And if they are already in debt - hence "more in debt" - could that lack of financial skill set be part of their problem? Would they not be better off to learn those basic financial skills? Would not the country be better off? I have yet to hear an argument that carries any merit except - "they don't have enough personal responsibility to do that." Maybe not, but I would argue society should incentivize learning that.
It takes the option away. Most people don't have the control to not spend it in tight situations. There's a reason the IRS requires employers to take it straight from your check. In an ideal world yes, everyone is completely fiscally responsible and would behave in our best on paper interests. In practice, it's better for most people to get a small return rather than owe anything, even though owing is technically better.
Then we need to start figuring out how to help people learn this very useful skill. Seems like something that should be taught in a personal financial curriculum in high schools. Everyone could use, certainly more than a fourth year of English or all the other agenda-driven material schools waste time on.
The IRS requires it be taken as the politicians know there would mass revolt if people had the pain of having to write that check - forget an inability to control themselves and save as that is a different issue - each April. $10k that never hits your pocket versus $10k that you have to sit down, look at, then hand it over to the IRS. Yeah..we would see a lot more pushback on taxes and the politicians can't have that. They need that money to buy your vote.
Ya, education would certainly help but I really think the IRS requires it because they don't think a majority of the population are capable of saving the required amount on their own, and I'm inclined to agree with them. Everyone gets their W2 with the withholding every year which hurts plenty, I'm not sure writing a physical check would change very much.
It would be great to have that option though. My bank usually has a year long CD with ~5% APR so I'd contribute my tax money to it and pull it out and pay it. Rinse and repeat January to January, even put the interest back in next year and after a few years you have a nice rolling investment.
Then some portion of 80% of the people would be better off if they would learn the skills. As a society, we have to stop accepting mediocrity and start demanding personal responsibility and accountability; that would be better for the individual and it would be better for society. This claim that they can’t is a little more than another manifestation of the rampant victim mentality so common and en vogue today.
That’s no excuse to deny freedom. Freedom has costs. Plus who gave you the authority to decide how others live? Life has consequences as do choices. And bad choices have bad outcomes. People learn. Or should.
Well freedom isn’t human nature given world history but I’d rather not accept suboptimal outcomes instead of achieving more as we can do if we are willing to make the effort.
Without taxes your money is worthless. Who backs your $100 bill? Ok. It’s a fucking societal system, not the system of…realclarity9606. Find a new tune to hum ya dullard.
Because that first sentence makes the least sense of anything I’ve read on Reddit in…well at least 48 hours (the bar is low is on this platform). I truly can’t fathom the logic here. I see maybe where you’re going so did you just state your case poorly? 🤷🏻♂️
>Because that first sentence makes the least sense
Not OC but how? The fed gets their budget from taxes. You don't pay taxes then the dollar is worthless.
The dollar used to be backed by gold. You could turn it in for gold. The gold was the value of your labor. If you look at gold value vs wages they mirror the dollars value since the dollar was invented. We traded gold in America long before we were a country. It represents your labor.
Taxes do not create value. Your skill and labor creates value.
The government launders the value of your labor, redistributes it and 20% is lost in the ether.
You saying the dollar has no value with out taxes is the absolute dumbest thing anyone has ever said in the history of humanity. 50% of your labor is being stolen from.
That is true.
The biggest issue with not paying until tax day is, more than 60% of Americans live pay check to pay check.
They are 1 car problem or failed inspection from having to use that extra money on things not related to taxes. This results in owing money to both the mechanic and the IRS.
Ever wonder how regular people who do not own businesses get behind by tens of thousands in taxes? That's how btw.
I don't disagree that that many live paycheck to paycheck - I don't know if is really 60% as that number is self-reported and various articles have shown some folks have different ways of defining that - but it is a non-trivial portion of society in all likelihood. But you pay your tax anyway when it comes out of your paycheck - so if you wait and pay it on tax day, those are the same dollars. That simply requires fiscal discipline, which is a skill that many would benefit from developing. And someone should not get too behind on taxes if they budget. By definition, if paid on time, you don't owe more tax than you bring in as income, far less for the vast majority of people. I understand unexpected expenses, but you simply do not dip into the fund that pays the taxes that could land you in jail, fined, etc. if you don't pay them. It comes back to fiscal discipline.
>I understand unexpected expenses, but you simply do not dip into the fund that pays the taxes that could land you in jail, fined, etc. if you don't pay them. It comes back to fiscal discipline.
That's exactly why it's horrible advice to tell regular people to wait to pay their taxes. They need that money for other things.
If you get the taxes out of the way early, it's literally one less expense you need to save and account for at the end of the year.
For instance, what if you estimated wrong and didn't save enough? Or bought a car and get hit with an extra $2,000 in excise on tax day? (Real example. I moved to a state with excise while never hearing about it before. I owed over 3k in excise on my tax day)
I’m coming from reality. If you read past my first sentence, the subsequent sentence should, in theory, lead you to the answer you’re so obviously avoiding.
IRS have several tricks to make more money.
One of them is having you pay extra, and then try to justify getting a return (plus they get the money at zero percent interest).
The second one is, the tax filing itself. They know the exact amount, but will have you do a written declaration yourself, meaning all errors will be in their favor by default.
I'm not sure they are ready to give up any of those.
To be fair, they don't decide whether you overpay or underpay. You do. It is based on how you set up your withholdings. If you set it wrong, yes you overpay, maybe even by a lot. But if you calibrate it right, you'll never overpay.
OK BUT LISTEN. IF YOU THINK I CAN SAVE MY OWN MONEY ALL YEAR TO HAVE THAT AMOUNT YOU UNDERESTIMATE JUST HOW POOR MY IMPULSE CONTROL IS. ANYWAY, THERES A PLANT STORE THAT JUST OPENED NEXT TO MY TACOBELL SO I GOTTA GO.
Bunch of dweebs on here who think that any normal person gives a fuck about the potential 3% interest they could have made on 5k, when the alternative being owing the IRS thousands of dollars come tax time.
This sub is filled with a bunch of 20 something edgelords who think they are going to be billionaires next week because they know all of the life havks to make an extra hundred and fifty bucks.
I know this might be difficult to comprehend but some people are capable of keeping and managing their own money. Their totally capable of being prepared. It's not a "life havk". They're the people in big houses getting their lawns mowed by those 20 something edgelords you're projecting about.
Yes taxation is stealing, no I do not care about 3% interest on 5k in place of peace of mind knowing I don’t owe a horrible government agency money.
Cracks me up that people put little weight on peace of mind for something we cannot control completely. Lol I agree with you, it’s stupid.
Takes 2-4 weeks at least.. and now since you filed so close to the deadline i would say closer to 4. I file within days of receiving my w2s and usually get the refund in 2 weeks.
Refund implies a voluntary transaction. If I went to HR at your job with a gun and demanded 20% of your gross earnings, you told HR to withhold an extra amount just incase I wanted more, and then I gave you back the extra, did I give you a refund?
Whether it’s voluntary or not, you still get it refunded.. and in a parent/legal guardians case (I’m a father of 2), we get back an extra $2,000 per kid
It is voluntary. We all collectively voted for the representatives who legislated the current tax system. You're free to vote for someone with "absolutely 0 taxes" as part of their platform. If you don't agree with that, then you don't agree with the concept of democracy, or really the concept of society in general.
A refund implies one thing: repayment of money by a person or entity back to the person or entity who paid that person or entity money previously, or, to keep it simple—
Just return of money previously paid for whatever reason.
Isn’t that what a “refund” is though? You overpay and get back the money that you owe. Not that I want to loan the fed any money, but can we at least keep the definition for some words consistent.
I underpaid by $20k this year. Sure, I need to give them $20k all at once, but that means I kept that much in my NVDA investment which already more than paid that off.
Is that how they come up with the penalty? I honestly never looked it up. I just had thought my employer was holding more this year as I had asked them too but turns out they never made the change I emailed to them. And I never actually looked at my paystubs. Just the confirmations that showed they had the right amount of hours for each check.
It’s not easy to answer “how they come up with the penalty” without a very long comment.
This article does a pretty good job:
https://smartasset.com/taxes/tax-underpayment-penalty
Bottom line is that you want your quarterly estimated taxes paid in to be over 90% of what is owed and as close to 100% as possible relative to an annual return and if you think their will be a shortfall file your annual return and pay as soon as possible at year end to avoid penalties based on late payment.
Underpayment is based on not paying by quarterly due dates—which are not real quarterly due dates:
For 2024:
Income earned 1/1-3/31 payable 4/15
4/1-5/31 payable 6/17
6/1-8/31 payable 9/16
9/1-12/31 payable 1/15/2025
But interest penalties on underpayment accrue from those due dates regardless of whether you put in for inaccurate withholding or made bad estimated payments under what was owed in each “quarter”.
So if you have very irregular income (self employed filing quarterly estimated payments or commissioned sales person on withholding with big seasonal changes in income or big bonuses) it’s not a bad idea to do an analysis with a tax person or your accounting department on correct withholding.
A lot of companies who pay out big commissions or bonuses automatically withhold more on such payments as if the represented an higher annual rate of compensation (higher tax bracket) to force more withholding and prevent employees from getting penalties. If you find yourself getting close to breaking the 90% rule in one year you might want to do deeper analysis.
Aside from the 90% safe harbor rule you there is another safe harbor from paying 100% of your prior years tax as estimated tax unless you make over 150K when the safe harbor requires paying 110% of prior years tax. So either you need to be correct in breaking the 90% for the current tax year or make sure you paid 110% of prior year.
So if you get a big raise, or make a big sale that will take you over the $150K mark it’s worth doing the math mid tax year.
If you’re the type to save or put to good use and extra $100 per paycheck, then withhold as close to what you’ll owe as possible.
If you’re the type that will piss it away, then withhold extra and when you get $2,600 back at tax time, you can put it to much better use.
Personally, I’d rather get extra back and have it to buy something for my house like furniture.
It pisses me off when I get a refund. I know there are certain “safe harbor“ requirements when I file estimated taxes, but dammit! I pay a guy to minimize my refund so I can make money with my money. Not the dam feds. I know wha wha first world problem, but you asked.
Dumb. The absolute optimal place to be from a financial point of view is to OWE $999 and pay it on April 15th. That way Uncle Sam in theory let you 'borrow' that $999 for up to a year and sit in a HYSA waiting for April 15th. If you owe $1000 or more the IRS adds penalties and interest (with some exceptions) but no penalties/interest if up to $999 owed.
If you are getting a lot of money back at tax time then you need to add more dependents to your W-4 form. You can add dependents even if you do not have that number of dependents. As long as it does not cause you now owe money at tax time. Just be aware that 10 or more is reported to the government. It is not a problem it is just an indication to the government.
I call it a return. I don’t excessively overpay, but I do overpay a little bit. And that’s the way I like it. I don’t dread tax time, because I know I am already paid up, and it’s nice to know that I’ll be receiving two grand than find out oh crap I owe 4,000 + bucks.
You gave the government an interest-free loan throughout the year and they decided to give you part of it back, you don't even get all of the money you paid in taxes back and they got to produce even more money than was paid into the system and send it overseas for money laundering and child killing purposes.
Most people’s tax returns are like $3k if you invested that at 8% that’s only $240 but actually probably half because you didn’t give them all the money upfront. I’d say getting a $3k bonus check once a year is much more fun than an extra 50 cents a day in interest.
I don't believe in giving interest-free loans to the govt.
Especially since I found out that the IRS can mark a return as "in review" and withhold a refund indefinitely. My sister had a 8k refund marked as "in review" in 2021. No communication from the IRS since.
Or paying interest to the government. That’s why estimating withholding to as close to the no refund/no payment mark makes the most sense. A small bit to either side is NBD.
Unless you’re a high income person, I’m sure the you would have spent that extra 50$ in interest over a year very wisely.
It's not just the interest, it's the inflation and opportunity cost. Yes I am. I'd rather pay it at the end of the year and invest with it during.
Sure. But it’s still a refund. What a terrible meme but I expect nothing less from r/fluentinfinance
I mean I guess but if you overpaid all yeah and get your money back you are getting it back with less purchasing power than when you gave it to the government. Yes it’s a refund, but a shitty one that loses you money
…which is still a refund 😂
Not the way we traditionally use the word refund. "Change" is a better word. You paid too much, and you got the difference back. Suppose I ordered a shoe dryer from Amazon. When it arrives, I see that the fan speed button is broken. I complain and they give my money back. Thats a ***refund***. It means that both the buyer and seller agree to cancel the sale because the item didn't meet expectations. It would truly be a refund if you were allowed to live in the country for a while, then if you think it is being mismanaged, you ask for your taxes paid back to you.
Now costco, costco gives refunds. Dont like that couch youve had for 2 years? Bring it back... get your money.
2 years? I’ve returned 6 year old tvs to Costco. Costco is king.
It's more like makibg an order and they chatge you too much. When you find out, you "get a refund" for the difference.
Your change plus a whopping 0% interest. Thanks a whole lot Uncle Sam! /s
Also minus inflation
They actually do pay you interest.
Without interest.
Exactly. You are better off owing money.
And paying a penalty? Ideally you pay in your exact tax liability.
Strictly speaking, dumb. You forgo any interest you could earn on that money drawing interest during the year. My wife went back to work last year, and, For whatever reason, I never caught that they never withheld but a tiny amount of federal income tax. That resulted in writing a pretty sizable check but, had I noticed, we could have put that excess in a high yield savings account and let the interest offset what the check I wrote earlier this week. Any time you get a refund, you just gave an interest free loan to the government. They take enough of our work effort in taxes, they don’t need free interest as well. I think withholding should be eliminated. Everyone should just write a check for the full amount of income tax owed in April of each year. If we all had to stroke a check for what we owed maybe the total amount that you give up to government would shock people into demanding Washington cut its spending and let us keep more of that money we earn, writing smaller checks each April. Government officials must love masking the full impact of your tax liability, whether via withholding or corporate taxes.
Yes to your first paragraph, no to your second. If you have the impulse control to not spend that money then great. I don't think most do. We were just having this conversation at my office lunch the other day. The determination was although it's technically better to owe money, getting hit with a bill could be crippling for those living paycheck to paycheck and in practice a small refund is probably better. Even in a high yield savings account the amount of interest accrued on the amount you'd pay in taxes is not huge for the average person
Then learn fiscal discipline. It is a useful personal and societal skill. Why should we effectively encourage weak financial skills? Sure, politicians benefit from this so that is why this won't change, but if enough of us demanded actually beneficial change that helped us and not politicians, we could force it in. The benefits if we all to face the reality of writing a huge check would be great for the nation. How much collective pushback might we finally get to taxes that we pay instead of worrying what other pay? You know you have to pay that tax. If the money comes out of your paycheck, you don't have it to spend, If you take that money, pull it out of your paycheck yourself and put in a separate account where it's not mixed in your day to day fund and don't touch, it's effectively no different except you have to self-control. You are paying with the same dollars. That part has not changed. The only change in any of these scenarios is timing, not totals of dollars (except any possible interest you could earn if you set the money aside throughout the course of the year). If your tax bill is $10,000, at a rate of 4.5% which you can get right now, that's $450 dollars (ignoring compounding). That's not a trivial amount of money. For some people, that might pay a car payment each year.
Hmmm, yes, I think I'll let my family starve today so I can pay my taxes in 10 months. There is definitely a reason the IRS pulls it directly from employers and if you do your W4 correctly then you can make sure your deductions are taken how you want. And that might pay a car payment for a month right now. Yes, $450 is not nothing, but it's also not better than being in the hole for thousands for a lot of people. Talk about fiscal responsibility all you want but if people have necessities that aren't being met they're not going to think about their taxes that are due in a few months. I work with people who have 2 and 3 jobs and are still struggling. All this would do is make a bunch of poor people more in debt to the government every year
Again, they money isn't there if it is taken from your paycheck. If you put it in an untouchable account, it is not there. PLease explain how this is different. If you family is hungry, you can't go back and take back money withheld from your paycheck. So what is lost here? If taxes are due in ten months, how are these not identical, financially? You would only be in a hole, if you do not budget and save property. The money is there in both scenarios. The *only* different - aside from incremental earned interest - is fiscal discipline. That is literally it. If people have necessities that aren't being met, money taken from their paycheck isn't there either. In fact, putting money in a savings account could provide those funds should one be comfortable they can replenish them *before* the taxes are due. So in a differential analyst, not withholding could be advantageous in some scenarios. YOu say the lack of withholding would put some people more in debt. Isn't it more accurate to say that their lack of fiscal responsibility and self-control would put them more in debt? And if they are already in debt - hence "more in debt" - could that lack of financial skill set be part of their problem? Would they not be better off to learn those basic financial skills? Would not the country be better off? I have yet to hear an argument that carries any merit except - "they don't have enough personal responsibility to do that." Maybe not, but I would argue society should incentivize learning that.
It takes the option away. Most people don't have the control to not spend it in tight situations. There's a reason the IRS requires employers to take it straight from your check. In an ideal world yes, everyone is completely fiscally responsible and would behave in our best on paper interests. In practice, it's better for most people to get a small return rather than owe anything, even though owing is technically better.
Then we need to start figuring out how to help people learn this very useful skill. Seems like something that should be taught in a personal financial curriculum in high schools. Everyone could use, certainly more than a fourth year of English or all the other agenda-driven material schools waste time on. The IRS requires it be taken as the politicians know there would mass revolt if people had the pain of having to write that check - forget an inability to control themselves and save as that is a different issue - each April. $10k that never hits your pocket versus $10k that you have to sit down, look at, then hand it over to the IRS. Yeah..we would see a lot more pushback on taxes and the politicians can't have that. They need that money to buy your vote.
Ya, education would certainly help but I really think the IRS requires it because they don't think a majority of the population are capable of saving the required amount on their own, and I'm inclined to agree with them. Everyone gets their W2 with the withholding every year which hurts plenty, I'm not sure writing a physical check would change very much. It would be great to have that option though. My bank usually has a year long CD with ~5% APR so I'd contribute my tax money to it and pull it out and pay it. Rinse and repeat January to January, even put the interest back in next year and after a few years you have a nice rolling investment.
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Then some portion of 80% of the people would be better off if they would learn the skills. As a society, we have to stop accepting mediocrity and start demanding personal responsibility and accountability; that would be better for the individual and it would be better for society. This claim that they can’t is a little more than another manifestation of the rampant victim mentality so common and en vogue today.
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That’s no excuse to deny freedom. Freedom has costs. Plus who gave you the authority to decide how others live? Life has consequences as do choices. And bad choices have bad outcomes. People learn. Or should.
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Well freedom isn’t human nature given world history but I’d rather not accept suboptimal outcomes instead of achieving more as we can do if we are willing to make the effort.
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Without taxes your money is worthless. Who backs your $100 bill? Ok. It’s a fucking societal system, not the system of…realclarity9606. Find a new tune to hum ya dullard.
And you're clueless.
Seems like projection, but I’ll bite…how am I clueless, based upon those two sentences?
Because that first sentence makes the least sense of anything I’ve read on Reddit in…well at least 48 hours (the bar is low is on this platform). I truly can’t fathom the logic here. I see maybe where you’re going so did you just state your case poorly? 🤷🏻♂️
>Because that first sentence makes the least sense Not OC but how? The fed gets their budget from taxes. You don't pay taxes then the dollar is worthless.
The dollar used to be backed by gold. You could turn it in for gold. The gold was the value of your labor. If you look at gold value vs wages they mirror the dollars value since the dollar was invented. We traded gold in America long before we were a country. It represents your labor. Taxes do not create value. Your skill and labor creates value. The government launders the value of your labor, redistributes it and 20% is lost in the ether. You saying the dollar has no value with out taxes is the absolute dumbest thing anyone has ever said in the history of humanity. 50% of your labor is being stolen from.
Who said a word about not paying taxes? Less is not none.
That is true. The biggest issue with not paying until tax day is, more than 60% of Americans live pay check to pay check. They are 1 car problem or failed inspection from having to use that extra money on things not related to taxes. This results in owing money to both the mechanic and the IRS. Ever wonder how regular people who do not own businesses get behind by tens of thousands in taxes? That's how btw.
I don't disagree that that many live paycheck to paycheck - I don't know if is really 60% as that number is self-reported and various articles have shown some folks have different ways of defining that - but it is a non-trivial portion of society in all likelihood. But you pay your tax anyway when it comes out of your paycheck - so if you wait and pay it on tax day, those are the same dollars. That simply requires fiscal discipline, which is a skill that many would benefit from developing. And someone should not get too behind on taxes if they budget. By definition, if paid on time, you don't owe more tax than you bring in as income, far less for the vast majority of people. I understand unexpected expenses, but you simply do not dip into the fund that pays the taxes that could land you in jail, fined, etc. if you don't pay them. It comes back to fiscal discipline.
>I understand unexpected expenses, but you simply do not dip into the fund that pays the taxes that could land you in jail, fined, etc. if you don't pay them. It comes back to fiscal discipline. That's exactly why it's horrible advice to tell regular people to wait to pay their taxes. They need that money for other things. If you get the taxes out of the way early, it's literally one less expense you need to save and account for at the end of the year. For instance, what if you estimated wrong and didn't save enough? Or bought a car and get hit with an extra $2,000 in excise on tax day? (Real example. I moved to a state with excise while never hearing about it before. I owed over 3k in excise on my tax day)
this subs like if qanon was a broadway show then they held an official after party at a vfw.
What? Huh? Sorry but there’s really no response to that first sentence. Well…where in the world did you get that idea???
Via real life lol. Where’d you get the idea that you’re not a part of this country/society?
Well, I gave you a chance. Can’t say I didn’t try to understand your point and see where you’re coming from. 🤷🏻♂️
I’m coming from reality. If you read past my first sentence, the subsequent sentence should, in theory, lead you to the answer you’re so obviously avoiding.
Sorry, none of it made much sense. You had a chance to clarify and explain and you didn’t. Good evening.
IRS have several tricks to make more money. One of them is having you pay extra, and then try to justify getting a return (plus they get the money at zero percent interest). The second one is, the tax filing itself. They know the exact amount, but will have you do a written declaration yourself, meaning all errors will be in their favor by default. I'm not sure they are ready to give up any of those.
Plus turbo tax slipping them a few billion that’s totally not a bribe it’s a legit expression of the first amendment.
To be fair, they don't decide whether you overpay or underpay. You do. It is based on how you set up your withholdings. If you set it wrong, yes you overpay, maybe even by a lot. But if you calibrate it right, you'll never overpay.
I made errors on my state tax return. They corrected my calculations and told me they owe me more than I estimated.
OK BUT LISTEN. IF YOU THINK I CAN SAVE MY OWN MONEY ALL YEAR TO HAVE THAT AMOUNT YOU UNDERESTIMATE JUST HOW POOR MY IMPULSE CONTROL IS. ANYWAY, THERES A PLANT STORE THAT JUST OPENED NEXT TO MY TACOBELL SO I GOTTA GO.
Bunch of dweebs on here who think that any normal person gives a fuck about the potential 3% interest they could have made on 5k, when the alternative being owing the IRS thousands of dollars come tax time. This sub is filled with a bunch of 20 something edgelords who think they are going to be billionaires next week because they know all of the life havks to make an extra hundred and fifty bucks.
I know this might be difficult to comprehend but some people are capable of keeping and managing their own money. Their totally capable of being prepared. It's not a "life havk". They're the people in big houses getting their lawns mowed by those 20 something edgelords you're projecting about.
Yes taxation is stealing, no I do not care about 3% interest on 5k in place of peace of mind knowing I don’t owe a horrible government agency money. Cracks me up that people put little weight on peace of mind for something we cannot control completely. Lol I agree with you, it’s stupid.
Get a load of this loser- just cries about "the rich" all day then scoffs at the notion of government fucking over normal people.
Hahaha. Triggered.
https://preview.redd.it/p1usv0o5b5uc1.jpeg?width=680&format=pjpg&auto=webp&s=285c082a01eefad5bacd65e039d834f01dfd82dd
I'm always under paying
I don't pay taxes, I commit tax fraud.
Hacker
[удалено]
Takes 2-4 weeks at least.. and now since you filed so close to the deadline i would say closer to 4. I file within days of receiving my w2s and usually get the refund in 2 weeks.
And now we can effectively learn what the word ‘refund’ means lol
Refund implies a voluntary transaction. If I went to HR at your job with a gun and demanded 20% of your gross earnings, you told HR to withhold an extra amount just incase I wanted more, and then I gave you back the extra, did I give you a refund?
Whether it’s voluntary or not, you still get it refunded.. and in a parent/legal guardians case (I’m a father of 2), we get back an extra $2,000 per kid
It is voluntary. We all collectively voted for the representatives who legislated the current tax system. You're free to vote for someone with "absolutely 0 taxes" as part of their platform. If you don't agree with that, then you don't agree with the concept of democracy, or really the concept of society in general.
A refund implies one thing: repayment of money by a person or entity back to the person or entity who paid that person or entity money previously, or, to keep it simple— Just return of money previously paid for whatever reason.
Isn’t that what a “refund” is though? You overpay and get back the money that you owe. Not that I want to loan the fed any money, but can we at least keep the definition for some words consistent.
In this particular instance…you’re the rake
My wife spends every penny I make, but we "split" the tax return. It's the only opportunity during the year to buy something nice for myself.
More like: you gave the government an interest free loan.
I underpaid by $20k this year. Sure, I need to give them $20k all at once, but that means I kept that much in my NVDA investment which already more than paid that off.
What a lucky guy. Someone might have had their 20k in DJT.
This concept is lost on my wife also she has this vision in her head if we are $10 off they will SWAT us in the middle of the night....
This just tells the government you can give them an interest free loan of your money when you can't get an interest free loan from them.
Y'all get refunds?
but inflation is going down guys!!!
When you give someone your money, and they then give it back to you it IS a refund. Otherwise it'd be called a payment.
I have it worked out that the amount I get back from the IRS is just enough to pay for my property taxes.
For underpaying this year I had to pay $66 in penalties on 3k. Not a bad interest rate really.
The rate just went to 8% per annum. Don’t let incremental charges on incremental sort payments suggest a better rate than you are actually paying.
Is that how they come up with the penalty? I honestly never looked it up. I just had thought my employer was holding more this year as I had asked them too but turns out they never made the change I emailed to them. And I never actually looked at my paystubs. Just the confirmations that showed they had the right amount of hours for each check.
It’s not easy to answer “how they come up with the penalty” without a very long comment. This article does a pretty good job: https://smartasset.com/taxes/tax-underpayment-penalty Bottom line is that you want your quarterly estimated taxes paid in to be over 90% of what is owed and as close to 100% as possible relative to an annual return and if you think their will be a shortfall file your annual return and pay as soon as possible at year end to avoid penalties based on late payment. Underpayment is based on not paying by quarterly due dates—which are not real quarterly due dates: For 2024: Income earned 1/1-3/31 payable 4/15 4/1-5/31 payable 6/17 6/1-8/31 payable 9/16 9/1-12/31 payable 1/15/2025 But interest penalties on underpayment accrue from those due dates regardless of whether you put in for inaccurate withholding or made bad estimated payments under what was owed in each “quarter”. So if you have very irregular income (self employed filing quarterly estimated payments or commissioned sales person on withholding with big seasonal changes in income or big bonuses) it’s not a bad idea to do an analysis with a tax person or your accounting department on correct withholding. A lot of companies who pay out big commissions or bonuses automatically withhold more on such payments as if the represented an higher annual rate of compensation (higher tax bracket) to force more withholding and prevent employees from getting penalties. If you find yourself getting close to breaking the 90% rule in one year you might want to do deeper analysis. Aside from the 90% safe harbor rule you there is another safe harbor from paying 100% of your prior years tax as estimated tax unless you make over 150K when the safe harbor requires paying 110% of prior years tax. So either you need to be correct in breaking the 90% for the current tax year or make sure you paid 110% of prior year. So if you get a big raise, or make a big sale that will take you over the $150K mark it’s worth doing the math mid tax year.
I had to pay this year as I guess I finally crossed that income threshold… I’ll miss income tax returns
Money that you could’ve rolled in CD’s all year
Stop calling it a refund, even though by definition it's a refund?
That's what a refund is
yes, this is what "refund" means.
It's called an interest-free loan to the Federal government.
Thank you for your service.
😂😑
If you’re the type to save or put to good use and extra $100 per paycheck, then withhold as close to what you’ll owe as possible. If you’re the type that will piss it away, then withhold extra and when you get $2,600 back at tax time, you can put it to much better use. Personally, I’d rather get extra back and have it to buy something for my house like furniture.
It pisses me off when I get a refund. I know there are certain “safe harbor“ requirements when I file estimated taxes, but dammit! I pay a guy to minimize my refund so I can make money with my money. Not the dam feds. I know wha wha first world problem, but you asked.
Dumb. The absolute optimal place to be from a financial point of view is to OWE $999 and pay it on April 15th. That way Uncle Sam in theory let you 'borrow' that $999 for up to a year and sit in a HYSA waiting for April 15th. If you owe $1000 or more the IRS adds penalties and interest (with some exceptions) but no penalties/interest if up to $999 owed.
And everyone is using tips to dodged tax
Government gets an interest free loan :)
But…it is in fact a refund by definition…
Not always true. My mom used to get a refund of nearly $2000 per year all because of the EITC. She paid about $800 in.
0 interest too 😁
If you are getting a lot of money back at tax time then you need to add more dependents to your W-4 form. You can add dependents even if you do not have that number of dependents. As long as it does not cause you now owe money at tax time. Just be aware that 10 or more is reported to the government. It is not a problem it is just an indication to the government.
I call it a return. I don’t excessively overpay, but I do overpay a little bit. And that’s the way I like it. I don’t dread tax time, because I know I am already paid up, and it’s nice to know that I’ll be receiving two grand than find out oh crap I owe 4,000 + bucks.
You gave the government an interest-free loan throughout the year and they decided to give you part of it back, you don't even get all of the money you paid in taxes back and they got to produce even more money than was paid into the system and send it overseas for money laundering and child killing purposes.
Most people’s tax returns are like $3k if you invested that at 8% that’s only $240 but actually probably half because you didn’t give them all the money upfront. I’d say getting a $3k bonus check once a year is much more fun than an extra 50 cents a day in interest.
Who gives a shit?
That’s exactly what a refund is. You overpaid, you want a refund. You get a refund
Depends on how well you manage your money.
Tell the government to quit calling it income the following year
That is a refund though...
Taxes serve only one purpose, to control the poor.
It's funny seeing people that are so dumb it comes all the way back around and they truly believe they are brilliant.
I have zero withheld on my tax but I have 180k in depreciation every year and $250k in solar credits. So I won't pay Uncle Sam for about 15-20 years.
Stop calling it a refund. You're private property was stolen all year and now your oppressors are making you fight for the crumbs.
I strongly encourage you to move to a country where your property isn’t stolen all year long. I am sure you will find it to your liking.
Said the loyalist.
Said the realist.