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Old 02-18-2013, 09:21 PM
 
Location: Dallas,Texas
1,379 posts, read 1,682,634 times
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Im confused. If you get a tax refund when you file your taxes, doesn't that essentially mean that the government is getting too much of your money every month via your amount of withholding? I thought that your taxes witheld are linked to your filing status as single / married and whether you have dependents or someone can claim you as a dependent. I would rather not have a refund in the spring and would prefer to have that potential refund money in my wallet every month to save or spend or invest. What am I missing?
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Old 02-18-2013, 09:27 PM
 
Location: TX
795 posts, read 1,344,989 times
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You're right, but most people either don't mind or aren't able to withhold less.
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Old 02-18-2013, 10:30 PM
 
Location: Dallas,Texas
1,379 posts, read 1,682,634 times
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So how can I change my witholding amount if its tied to whether I'm single or have or don't have dependents?
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Old 02-18-2013, 10:46 PM
 
1,785 posts, read 3,341,543 times
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Yes you can adjust the number of allowances you claim on your W-4 form to have more or less withheld. Your W-4 doesn't have to exactly match your # of dependents if you think all the factors on your actual return will result in less tax being owed.

You don't want to go overboard, because if you end up owing the IRS too much money, penalties and other bad things happen.
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Old 02-18-2013, 11:04 PM
 
Location: The Triad (NC)
33,178 posts, read 77,767,360 times
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Quote:
Originally Posted by Texan
Im confused. If you get a tax refund when you file your taxes...
What am I missing?
Quote:
Originally Posted by snowdenscold View Post
You don't want to go overboard, because if you end up owing the IRS too much money,
penalties and other bad things happen.
^This.

Some refund is a good thing (call it at up to $1000?).
Too much of a good thing is not.
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Old 02-19-2013, 01:10 AM
 
10,015 posts, read 10,757,971 times
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Years ago I was into not getting a refund. BUT I found that you have to do the homework and pay more attention to my allowances when I owed -- so I didn't owe too much...with the goal being to to owe as little as possible, because as was said above if you owe TOO much you'll be subject to penalties. You don't have to be that diligent about it if you're getting a refund.. Heck if you get a refund you don't have to pay attention at all.

For me, the reason I went back to getting a bit of a refund was psychological....

For years, I had my allowances set to I'd ALMOST break even -- but OWE just a bit -- 50.00 to 100.00. One year I think it got up to 150 bucks and that was it for me.

EVEN though, I knew -- that owing 150.00 meant I had MORE in my paycheck -- and that I started out wantting to owe the gov rather than the gov having more of MY money than it needed to have and not PAY ME interest one it.....when time came to write the check for even 50 bucks -- psychologically I didn't want to write the gov a check for more NOT ANOTHER DIME!

I admit I was also influenced by the mainstream mindset....everyone I knew was getting back refunds -- talking about the 1,000 - 2,000 dollars they're getting back -- or more...and here I was writing a check TO the gov.

I just didn't want to do it.......so for me ....I went back to getting a small refund of say 500.00. Enough to feel like I was getting a big enough amount to actually so something with -- but NOT so much I felt the gov was confiscating my money for a year.

Also, what's 500.00 over the course of 26 paychecks....19.20 cents? Really I'm going to tweak my allowances over 20.00 a paycheck?
I much prefer a larger amount all at once.

I'm also a creature of habit and just don't like fiddling with my W2 allowances every year......Some people likely don't mind juggling the numbers every six months or so to break even. But I just can't be bothered. As long as my refunds are less than 1,0000. That's close enough for me.
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Old 04-11-2013, 10:53 AM
 
Location: Simmering in DFW
6,951 posts, read 21,887,132 times
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Tagging onto this because I am getting about a $15K+ refund. I retired in 2012 but kept making my quarterly payments (set up on auto thru bank) just like past years. I file a tax return that includes six properties, since I am also an owner/landlord so -- tho I keep great records -- I am a prime audit target. Do you think if I don't take the refund and just indicate I want it applied toward future taxes it may help me avoid an audit?
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Old 04-11-2013, 11:25 AM
 
Location: NE Mississippi
23,116 posts, read 14,426,808 times
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Quote:
Originally Posted by Squirl View Post
Tagging onto this because I am getting about a $15K+ refund. I retired in 2012 but kept making my quarterly payments (set up on auto thru bank) just like past years. I file a tax return that includes six properties, since I am also an owner/landlord so -- tho I keep great records -- I am a prime audit target. Do you think if I don't take the refund and just indicate I want it applied toward future taxes it may help me avoid an audit?
I don't think so, but I don't really know.

I will say, though, that you should not alter your behavior in an attempt to avoid an audit. On the other hand, if you are audited you should not answer the audit yourself; have your accountant do it. That's the way we did it when we were audited and we passed just fine.

The odd combination of incompetence and bullying that the IRS uses should not govern your actions. We were really happy that we followed our accountant's advice and let him handle it. We never spoke with the IRS agent ourselves.

There are several good reasons for using an aggressive tax accountant.
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Old 04-11-2013, 11:33 AM
 
Location: Wonderland
65,101 posts, read 54,737,612 times
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One sure way to avoid a refund is to make more money.

Not really complaining, but I am on my way to my CPA's office to write a check to the IRS that is more than I used to earn in an entire year. I'm glad for the income, but I am a bit put out over my tax burden nearly DOUBLING from last year (our income certainly didn't double!).

And 2013 is when more tax cuts hit the fan, so I can only expect to pay in even more next year. YAY!

When I think of all the people who actually get a "refund" that is more than they paid IN in taxes, I realize just how much income redistribution really goes on in this country.
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Old 04-11-2013, 11:35 AM
 
Location: Los Angeles area
14,016 posts, read 20,093,567 times
Reputation: 32518
Much ado about nothing, unless the amounts (either of refunds or of balances due) are large. Some people just can't stand the idea of giving the government an interest-free loan, even if it's only $100. Or conversely, as one poster said, he just can't stand the idea of writing a check to the government. I think both those attitudes are just silliness, but hey, we all have something that makes us tick, whether that something is rational and objective or not.
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