changed title/ WHAT FUN THINGS ARE YOU DOING WITH REFUND?

I know I should stay away from these threads every tax season because I get so envious with all the high returns people get...lol.

But tell me, how does someone actually get an $8000 refund????? Do you really have such high withholdings through your employer each paycheck? Or do you have great credits/deductions???

I'm trying to see what the advantage is of having a big check sent to you once a year over having that extra money every month in your paycheck.

I am self employed, so we don't get a lot of choice on quarterly tax payments. we pay them, even if they end up getting refunded.
Last year we had a return of almost $10 K due to an adoption credit
 
This is only the second time in my working lifetime (30+) years that I'm not getting a refund:sad2: Got some money from my Dad's estate and it bumped my income up way to high. I'm having to pay:scared1: I did buy myself and my sons 10 day non-expiring park hoppers with some of my inheritance. :yay:

How is an inheritance taxable income?
 


We're going away for a few days for our 10th anniversary so some of the money will go to that. The rest is going for boring things like summer college classes since the grants in the summer aren't very much and this summer tuition is discounted by 25% so we want to take full advantage of that.

So mostly boring with a bit of fun thrown in. :)
 
How is an inheritance taxable income?
I'm not a tax person, but I could see a situation where the deceased person's child receives securities/stocks. If the stocks were sold after the child takes possession, it would become realized gains, and therefore taxable, no?
 
I don't think tax refunds should be taxable. I mean, that refund is what we overpaid last year and so we paid the amount of tax we need to on our income and were sent back the rest but now they want to tax us on it. Isn't that double dipping ?? I mean, we should have had that money in our pockets to pay our bills during the year and we wouldn't have to pay taxes on it next year. I mean, we do pay taxes on our gross income on not our after tax income. Come on !
 


I don't think tax refunds should be taxable. I mean, that refund is what we overpaid last year and so we paid the amount of tax we need to on our income and were sent back the rest but now they want to tax us on it. Isn't that double dipping ?? I mean, we should have had that money in our pockets to pay our bills during the year and we wouldn't have to pay taxes on it next year. I mean, we do pay taxes on our gross income on not our after tax income. Come on !

State tax refunds are income in the subsequent year if you itemize, because you took the amount paid as a deduction in the prior year. Say you paid $100 in state taxes in 2010, you deducted $100 on your federal return. Low and behold you do your state return and realize you only should have paid $60. You get the $40 back. The $40 is income in the next year bc you can't have the $100 deduction AND the $40 refund.
 
I'm not a tax person, but I could see a situation where the deceased person's child receives securities/stocks. If the stocks were sold after the child takes possession, it would become realized gains, and therefore taxable, no?

when you inherit stock from someone, you inherit the cost basis on the date of death. The inheritence itself is not a taxable event. However, as the poster above points out, if you then sell the stock for something more than the inherited cost basis, that difference is taxable.

Additionally, a lump sum distribution from a 401(k) to a non-spouse beneficiary IS taxable if it is not rolled over into an IRA. This is because no tax was ever paid on that money, so it can;t be distributed tax-free.
 
We are putting ours towards purchasing some land so we can build a new house. DH thinks this is "fun" lol. We were supposed to put it all on my car to bring the balance down (agreed upon when DH surprised me with the purchase last Valentine's Day) and that is what I thought of as fun for it lol.

We rarely just blow what refund we get. We normally put it on our debt (car is our last one) and don't even think about it.
 
We'll use a portion of ours for upcoming Disney spring vac, adding a couple of days visiting Universal too. :cool1:
 
We did rapid refund back in our early twenties- in the "two incomes and no kids" days. That year WDW was giving Active duty military free 7 day parkhoppers, and we went in and did our taxes the week before we left. We figured why not, we could really live it up.

Nowadays, we are a "one income and 3 kids" family we do our taxes ourselves and it goes towards fun stuff like credit card balances. :)
 
Some of ours will be going toward the quartz countertops I've been wanting as well as a nice backsplash :cool1:

The rest will go into ours and the kids savings accounts. It'll be our last really large refund (adoption credit) so I want to get the savings account built back up!
 
We're using a couple hundred on our upcoming cruise, but most is going to pay off a credit card fully and we're moving in April and want the extra money until our pay is normal.
 
Last year we did SWW at Disney and were able to donate to some places we'd been wanting to, the year before we bought an awesome swingset for the kids, I can't remember before that. This year for some reason money is super tight so its just going to go mostly to savings, with enough left over for a mini-vacation to DC or Niagara Falls. (We don't budget for vacations and take that money out of our return or any unexpected income).
 

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