This year I wasn't diligent on making mid year checks and adjustments, so ended up owing the feds and and getting refund from the state. Overall ended up owing $1500.
I usually wait until after bonuses are paid to do my check on actual vs estimated taxes to adjust and stay under +/- $1k overall.
For some reason I can't manage to get my state taxes to work out in a way that results in less than a few hundred dollar refund. The upside is that makes it super low risk to push federal right to zero. Even if I end up owing a few bucks, I know I'm still getting a refund overall. And I feel much less bad about giving the state a free loan because that money is way more likely to actually benefit me. Over the past two years I averaged about an $8 federal refund (owed $30 something last year, got $51 this year).
In reply to Pete. (l33t FS) :
Exactly my point. There is no education on finances, tax or credit management for people unless they are in accounting. This stuff should be taught in high school.
In reply to porschenut :
I'll get right on that, my three high schoolers are filing there own taxes again this year and learning about taxable income. The idea is to have a lot of income but get taxed on as little as possible. You know, look poor to the IRS.
one year, think it was 2018, I ended up owing something like 60¢ and they cashed the check.
porschenut said:In reply to Pete. (l33t FS) :
Exactly my point. There is no education on finances, tax or credit management for people unless they are in accounting. This stuff should be taught in high school.
I think we have that in our province now but it should start in grade school and continue through high school. It's one of the most important things we ALL need to learn and we don't.
I have a number of side things on the go, and it's not out of the ordinary for me to get a refund of $6000-$7000, but it's not predictable.
j_tso said:one year, think it was 2018, I ended up owing something like 60¢ and they cashed the check.
A friend of mine once got a refund of a couple dollars and the IRS sent him a letter scolding him for wasting taxpayer resources on trivial amounts of money. Sigh.
I think i'm gonna have to purposefully choose a different witholding amount than "correct" (married, filing jointly, no dependents).
This is the first full tax year after getting married, and even though i chose the correct stuff on my W-4, my return worked out to almost a $5k refund. I'm firmly in the "i'd rather have that money when i make it instead of loaning it to the gov't at 0% interest" so I need to figure out how to fix that
I undertstand the opportunity costs of having too much withheld, but what is the cost to my mental health of having to pay quarterly estimated payments if I go too far the other direction? This is why I have extra withheld from my paychecks to comfortably cover taxes on other income. I usually end up getting a couple grand back from overpayment, but delaying receipt of that money has bought me a little piece of mind.
codrus (Forum Supporter) said:j_tso said:one year, think it was 2018, I ended up owing something like 60¢ and they cashed the check.
A friend of mine once got a refund of a couple dollars and the IRS sent him a letter scolding him for wasting taxpayer resources on trivial amounts of money. Sigh.
If it's less than a dollar, IIRC, they don't need a payment.
In reply to budget_bandit :
I typically start the year using the standard withholding.
Then I wait until a few pay cycles after bonuses and merit increases (typically late Q2) and use the IRS Tax-withholding Estimator to determine what adjustments to make based on actual income and withholding for me and my wife.
In reply to akylekoz :
And the reason we can't fix that?... Thank the mega-dollar lobby efforts of the likes of Intuit (TurboTax) and H&R Block. I do so by filing through FreeTaxUSA.
I've done everything I can to get my withholdings as low as possible. It doesn't seem to make much difference and none of my payroll people seem to know any better than I do. Every year we get enough back to cover auto insurance/year and usually a bit more. This year I spent most of the extra at rockauto/amazon on truck parts. Which begs the question, if it's "free money" can I claim $0 for parts used on a Challenge build?
You'll need to log in to post.
