What are your plans with tax return money?

Spurshot · March 17, 2015

It's less about that specifically and more about how you set up your witholdings on your W4 (note, I'm NOT a tax advisor, I don't play one on TV, and I didn't sleep at some no-name hotel last night). The idea is to adjust your witholdings so that each paycheck has more money in it with the distinct understanding that Uncle Sam is going to knock on your door 15 April, looking for a hand-out. But it's better (IMHO) to give it to him in one lump sum versus a 0% interest loan over the course of a year. That way I can make more use of that money during the same year-long period.

If you go with your default witholdings, you'll inevitably be over-paying paycheck-to-paycheck, and you'll get a lump sum back in April. Adjusting the witholdings takes a bit of work and experimentation, and the only real way you'll know if you did it right is to do next year's tax return. It's a bit of an iterative process; there are tools available (TurboTax can help, for instance) that will help. But even they aren't 100% perfect.

There is no dependent claim I can make that withholds enough. I always end up paying. I've taken to adding estimated withholdings in addition. But with my income creeping up every year, I still end up paying.

BMRSNR · March 19, 2015

No refund here . Owe in just about every year ... Tax time isn't exciting anymore !

cheygm · March 24, 2015

Don't receive a refund this year. But I'm lucky that worker's comp payments aren't taxable. I can't imagine having as low a payment as I get and having to pay taxes on top of that.

truckofwinandawesome · March 25, 2015

Used mine for a new carport !! Got it installed yesterday.

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Well, we don't get a tax return anymore since we really don't have to file (the joys of having a Disabled Veteran for a dad!) but we DID have a carport of our own installed a couple of days ago!

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