So, who broke even/came close on their taxes this year?

[daughtersrus]

I just posted on another thread asking how does someone get an $8000 refund? I didn't know about the adoption credits.

But what really perplexes me is reading all the threads of people who are using their huge tax refunds to pay off debt. Why didn't they just adjust their withholdings to get more money during the year so they didn't accumulate the debt??? That makes more sense.

So many people prefer the large refunds, and I'm trying to figure out what the advantage is. I'm only talking about those who have more withholdings taken out of their checks, not someone who is eligible for extra tax credits. Couldn't you just put $200 a month in a savings account, then use that to pay off your Disney trip in the Spring? What if there was an emergency? Then you would have immediate access to your money in the bank, instead of using a cc and charging something, and then waiting until the Spring to pay it off.

We get a pretty big refund each year. I am self-employed. My income and deduction vary year to year. Because of that, we have elected not to claim a lower amount for dependents with DH's employer. We lost the child credit this year but we still have the tuition credits.

I will be honest and say that I'm not good at saving. This gives me a cushion for the years when my income is higher or I have less deductions for my business.

I do find it pretty interesting that this is such a hot button topic for a lot of people that I know. The odd thing is that while they say that they can't understand why I'm lending the money free to the government, many of these people escrow their property taxes and homeowner's insurance. The amount that they escrow is almost double what I get in a refund. Somehow they justify giving extra money to the mortgage company every month.

 

[bettymae1121]

Since savings accounts don't pay hardly any interest, I've seen no reason to adjust our withholdings. Generally we get a $1500ish refund from the feds and $200ish from the state. Next year it will go up as I'm about to give birth any day now. I'm not sure what we'll get so I'm not adjusting until I see how big a difference having a child makes. Even if it tripples our refund, it's more usufull in one lump sum rather than a few extra hundred a month, which would easily get spent.

If savings accounts paid more I'd likely feel differently though!

 

[BubMunkeyBles]

More words than that are needed....

Majority of the people I work with have their W4 status as single and 0 dependants, often also electing to have an extra $50 or so taken out. Then when they file, they are married with 4 dependants.

Two incomes of $40,000+ each and 2 children does not bring in Earned Income Credit. Yet, they get $6-8000 on their refund.

Agree. We got back almost $10,000 and didn't get EIC. They overtaxed a bonus of DH's by a lot.

 

[ccgirl]

We about break even every year. I am not the most disciplined when it comes to paying bills so now I have my bills auto-deducted rather than giving the government my money.

My Bil and SiL get back over 5K a year. SHe loves saying how the government "gives" her money. I tell her they didn't give her anything. She gave them her money and they made money off it and then that gave some of it back to her (less interest). I then ask, would she go to a store, pay $40 for a $20 item and walk out without the change and say she will be back in a year to collect the change? That is what I liken overpaying taxes to. I realize there are exceptions, like everything, such as the adoption credit.

 

[AmandaRG]

Your income must be 3 or 4 times what ours is. We got our adoption credit but it took 3 years of filing to actually get the $20K back.

Unless they have changed how they give the credit back. We could only get (per year) a credit for the amount we owed for that year.

Dawn

They have completely changed the way this works. It is fully refundable, and it appears that those families that adopted but did not have adoption costs due to being paid for by the state also qualify for this deduction. When we adopted we had to have an accounting of each expense and didn't get a penny more than we had receipts for.

Agree. We got back almost $10,000 and didn't get EIC. They overtaxed a bonus of DH's by a lot.

Bonuses usually have a flat tax amount. When I did payroll 10 years ago, it was 28%.


We did ok this year. It was the first year that we were without our adoption credits (and I did Married and 9 for the several years those credits carried over). Mid-year tax changes happen that affect withholdings, etc. We do the best we can, but we are still getting several hundred back. I don't mind having to pay a few hundred in, either.

 

[Marionnette]

Since savings accounts don't pay hardly any interest, I've seen no reason to adjust our withholdings. Generally we get a $1500ish refund from the feds and $200ish from the state. Next year it will go up as I'm about to give birth any day now. I'm not sure what we'll get so I'm not adjusting until I see how big a difference having a child makes. Even if it tripples our refund, it's more usufull in one lump sum rather than a few extra hundred a month, which would easily get spent.

If savings accounts paid more I'd likely feel differently though!

I understand your point but I look at it differently.

Even though a savings account wouldn't yield much in the way of interest, the money is available to me whenever I want it. If you allow the government to have the money, it's not as if you can say to them

"Hey, the roof blew off in the last storm and you know the $1500 of mine that I should be getting back as a refund in April? Well, I could really use it now to pay my deductible. Do you think that you can give it back to me now instead of after I file my return?"​

See what I mean? That doesn't make me right and you wrong. We just approach saving differently.

ETA: And congratulations on the baby. I hope that she isn't already keeping you awake at night! Those last couple of weeks were the roughest for me.

 

[kimberlym322]

We're paying ALOT this year. We're not eligible for some of the tax credits (like the addt'l child tax credit), and we lowered our retirement contributions in 2011 (to free up some cash on hand) so we ended up having a higher Gross Adjustable Income. We usually break even every year, but this year it's not happening.

I just posted on another thread asking how does someone get an $8000 refund? I didn't know about the adoption credits.

But what really perplexes me is reading all the threads of people who are using their huge tax refunds to pay off debt. Why didn't they just adjust their withholdings to get more money during the year so they didn't accumulate the debt??? That makes more sense.

So many people prefer the large refunds, and I'm trying to figure out what the advantage is. I'm only talking about those who have more withholdings taken out of their checks, not someone who is eligible for extra tax credits. Couldn't you just put $200 a month in a savings account, then use that to pay off your Disney trip in the Spring? What if there was an emergency? Then you would have immediate access to your money in the bank, instead of using a cc and charging something, and then waiting until the Spring to pay it off.

Sometimes it is not as easy as you think for people that have them withhold more then the"normal" amount of taxes they should take each week. Most that have them withhold more money may not be so that they can pay that Disney trip off.

Some people do it so that they can break even. Some people do it because they have 2 jobs and one job never takes enough money so you have to pay taxes. There are some people that do it even though they know they will not owe anything, but still have them take it out because they don't miss it and use it for things when they get their refund.

I have them withhold extra money each week out of my pay check. And it is NOT because I am using cc's and then paying them off in the spring, or using it as a way to save money to pay off a spring trip. I have had it done for the past 11 years for a few reasons. The first is when I worked a 2nd job the company was not taking enough taxes out so I had to pay both state and fed about 600.00 between the two...so it was easyer to lose 20.00 a week then have to come up with that money to pay in taxes when you don't have it. The second reason is because I live in a resort town and am layed off for 4 1/2 months a year (the winter) and get unemployment...and if you have ever been on unemployment you know the first few checks you get they don't withhold taxes until you send a paper back, so because of that that is money that you have to pay taxes on. I will not lie, the first few weeks I did miss the money, but I have gotten use to it being gone. And I look at it this way each week I blow 20.00 on things I don't need anyway so that is just 20.00 that I dont have to blow. As for me I have the extra money being withheld and I also put money each week away and I budget my money so that I can pay for my trips in the winter and what ever I need to pay while I am off work. This year when I go back to work I am actually going to have them withhold more then in the past.

 

[JAMIESMITH]

We also barely broke even. We are getting $260 back from the federal government and $240 back from the state. We usually get back around $1500 total, but my husband's work listed him as having our daughter as a dependent this year. Normally, we pick her up at the end of the year. At least we don't owe anything!

 

[LAH LAH]

Your income must be 3 or 4 times what ours is. We got our adoption credit but it took 3 years of filing to actually get the $20K back.

Unless they have changed how they give the credit back. We could only get (per year) a credit for the amount we owed for that year.

Dawn

For 2010 and 2011 it is a refundable credit. 2012 it goes back to how it was before, just a standard credit. We are adopting the 3rd brother (9 months old) during 2012 so the credit will be nice. Not quite as nice as a straight out refund, but nice none-the-less!

(I think it was only refundable during the 2010-2011 years for special needs adoptions, if I understood it correctly...)

 

[LAH LAH]

Sorry, double post...

 

[Deffenm]

We hope to break even. This is the first year we haven't had the adoption tax credit so I hope we figured out what our deductions should be correctly. I drop the paperwork off tomorrow to our accountant so I hope it works out. I don't mind getting nothing back I just don't want to owe.

 

[willowsnn3]

I purposely have xtra taken out weekly for state & federal taxes. I do this because of back taxes I owe from several years ago when I filed with my then husband. That is another story tho. So hopefully this year the combined refund (state/federal) will almost pay the balance of those back taxes & I can hopefully come up with the rest. I don't get the refund, just a letter showing how they applied it to amount owed.

 

[Fire14]

More words than that are needed....

Majority of the people I work with have their W4 status as single and 0 dependants, often also electing to have an extra $50 or so taken out. Then when they file, they are married with 4 dependants.

Two incomes of $40,000+ each and 2 children does not bring in Earned Income Credit. Yet, they get $6-8000 on their refund.

This is kinda our case No kids just us "big Kids" but after having to shell out a few thousand to Uncle Sam and Gov. Cheapskate I'll take my big refund at end of year vs trying to come up with money.

 

[mrsklamc]

IMO, the problem with intentionally using extra witholding to save is that one of these years they aren't going to have it to send back. Happened in several states the last few years.

 

[rockydek]

I chuckle when I see how excited my Sil is ..when she announces that she is getting back 7000.00 from taxes. She proceeds to ask me. what we are getting..I tell her I pay a couple hundred. She feels bad for me. I have tried several times to explain She doesn't care. She loves the big refund.

 

[TinkPirateMom]

I get paid in commission and tips so I son;t have the typical salary deductions. Therefore my husband purposely has a lot of taxes deducted to cover me so we break even or get a little back. We are in the just don;t want to owe anything boat plus I have never bothered to figure out what I would owe quarterly so this works for now.

 

[mrsklamc]

Owe about $100 federal and about the same for state. Just perfect as far as we are concerned.

 

[stsomewhere]

We usually got about $2000 back due to child tax credit.

But, my husband switched jobs in Sept. His new job pays all medical and he got a raise and it put us in a different tax bracket.

We owe $3500 for federal and $3300 for state.

 

[RRL38]

Three words: Earned Income Credit.

Not entirely true. We are getting a $8,000.00 refund and most certainly don't qualify for the earned income tax credit. We had pad $42,000 in federal taxes and are lucky to get $8,000.00 of our own money back.

 

[meriface11]

we usually try to break even, but this year was kind of funny. I switched jobs, so we have a refund on overpayment of SSI, which we had no ability to control. i also got an unexpected bonus and 4 weeks of vacation payout when i left my job, so we figured we'd be overpaying since those payments were taxed at a high rate, but i didn't adjust withholding since the great state of CT imposed a retro tax increase effective in August, so I knew we'd owe on state and figured it would come out in the wash. aside from the SSI, we're only getting about $600 back after we pay CT, and then we should be back on track for next year.