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I'm getting a lot more back than I usually do. First I'm getting some repairs done on my car. After that I'm trying to decide whether to pay down some debt or stash it all in an emergency fund.
Approx. $8300 (we bought a house) - the IRS website says it will DD tomorrow, I hope they don't lie. I have 8K in credit card debt, down from 40K a year ago. I will pay that off and use the extra $300 to buy an awesome golf club that I have been promising myself for about 10 years!
Between the two, I'm getting 8600. Bought a home so I had to mail them. Mailed them on 2/5. Should get the checks around 4/20. Gotta love how timely the government can be. About half is going straight to Home Depot for the repairs I did to the home. Then I'm buying a laptop then reimbursing my savings for my property tax bill.
We owe about $5,5k this year, but we're buying a home so we'll get about $2500 back this year. I plan on paying the accountant, paying the state we just moved from, then sending the rest back to the IRS as one of our quarterly payments for next year.
Well, it's not as if there's really a choice on this "free loan" to the government. If you underwithhold throughout the year, you get slapped in the fanny with penalties. Don't pay estimated taxes quarterly (and so so per quarter, not all at once) on your phantom cash income? You get more fines and the threat of jail. It's no free loan, the government wants its money when you earn it, not on the 15 of April as most people think.
That said, yes, exaggerated overwitholdings to avoid said scenario is probably unnecessary.
And that's the thing, the IRS won't let you do that. So there's no frugal about it, taxes are due when you earn them, the man wants its money now, 'free loan' is money above and beyond the taxes that are due the day you earn your money. The rest is sunk cost. I find the opportunity cost of erring a notch above break even on a tax return more suitable than quibbling with the IRS over a couple dozen bucks in interest that will get swallowed in potential penalties because I was trying to play 'chemistry set' with my W-4 and eek out net zero on the withholdings.
If I could just show up and cut a check to the man on April 15th, heck yeah I'd go for that in a heartbeat. Alas, the man knows how bad his people are with money management. Think about it, a system that encourages its populace to consume more than they make is all of a sudden gonna be kosher with allowing you to pay taxes at the end of a tax year? LOL with what money!?!? They know you're broke, they're the ones who sold you the (IN < OUT) = OK. The govt talks out of both sides of their mouth but they ain't THAT stupid.
I know someone who opts to have no withholding and he just writes the IRS one big check once a year. It's legal.
Getting a refund is not a sign of genius, it's a sign of mismanagement of your finances.
Having said that, gonna get some work done on my car, which will take 1k and then going to buy my daughter (3yr old) some stock with the balance.
Next year i don't plan on getting a refund
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They know you're broke, they're the ones who sold you the (IN < OUT) = OK. The govt talks out of both sides of their mouth but they ain't THAT stupid.
