I don't get it.....

[Gumbo4x4]

Okay, I now admit I am jealous of those getting a bonus. What is that like?

Nice when it's what it's supposed to be. Not so nice when it comes up short. Especially since I went 6.5 years without a raise.

 

[tennvalgirl]

Okay, I now admit I am jealous of those getting a bonus. What is that like?

It's like CHRISTMAS in March!

or

CHRISTMAS 2

 

[Jaime4004]

I agree. I do find it fairly insulting that it's insinuated that people who choose to get a refund don't understand the process or finances in general. I'm very much aware of how refunds work and have my finances very much in order. My choice to get a refund each year does not make me financially uneducated.

We prefer to get a large refund every year, one lump sum. It's more likely to be deposited into a savings account and stay there. We already save money monthly and do not need the extra money every week in our paychecks. It might make it more tempting to spend, I do have a slight vacation addiction... We know it's our money and that's what we choose to do with it. I'm fine with loaning it to Uncle Sam, as long as I get it back.

 

[rockydek]

Funny thing is....When I tell these refund receivers... How excited I am that I owe the government 1000.00...Some don't get it. My own interest free loan... I also know some who just are not disciplined enough to save any other way.

 

[richmond282]

We do get a refund every year. The amount did increase once my DH went back to school. We did not change our withholdings since we are paying OOP for his college. Some semesters he takes 6 credit hours, some 7 hours, others 4 hours. It is too much of a hassle to figure all of that out so we just left things the way they were and appreciate the refund (which we use to pay for another semester of classes )

 

[snapppyd]

I have actually heard some people say when asked how much they paid in taxes for the year "I got a refund", not even knowing that the refund was a portion of their taxes paid.

Semantics. Do you really think the majority of adults don't know how it works?

 

[gwynne]

Semantics. Do you really think the majority of adults don't know how it works?

 

[RitaE]

Semantics. Do you really think the majority of adults don't know how it works?

And with some people, not even semantics. Maybe rickybobby knows a bunch of people with refundable credits. Maybe rickybobby should go ask them because most people just love it when you inquire into their personal financial details and then give them your opinion.

It's one of my favorite things about my BIL.

 

[ICF]

I love this topic every year......it means spring will be here soon (although this year Im a bit skeptical of that!)

Unless the people with the large refunds (of which I am one) are paying CC's interest (which I am not) --- which could be reduced if they received these $$'s during the year -- they arent really losing anything.

As others, have mentioned.....interest rates are less than 1% on a savings account/money market fund, so there is really no lost interest.

I have my emergency fund, IRA's, 10% + going to 401K.....this check is a way for us to do something in the spring without touching any existing funds. This year, it's redoing 2 rooms in our house. We also have car insurance & HOA fees due in March so getting the refund also goes straight to those bills as well.

To each there own and if it works for you that's all that matters....but please dont act as if you some how are better with your finances than me and the others just because you "dont give the government an interest free loan every year".

 

[mumto3girls]

Every situation is different. We own a business. In 2012 we had a fantastic year and ended up owing a ton (to us anyway) of money. We knew it was coming, but it was still painful. In 2013, we upped our quarterly payments so that wouldn't happen again. We still had a good year, but not quite as good as 2012 so we are getting back a sizable refund. It's actually bad news as it's because we didn't make as much, but it sure feels better to get money back than to owe a bunch.

 

[Robinrs]

I love this topic every year......it means spring will be here soon (although this year Im a bit skeptical of that!)

Unless the people with the large refunds (of which I am one) are paying CC's interest (which I am not) --- which could be reduced if they received these $$'s during the year -- they arent really losing anything.

As others, have mentioned.....interest rates are less than 1% on a savings account/money market fund, so there is really no lost interest.

I have my emergency fund, IRA's, 10% + going to 401K.....this check is a way for us to do something in the spring without touching any existing funds. This year, it's redoing 2 rooms in our house. We also have car insurance & HOA fees due in March so getting the refund also goes straight to those bills as well.

To each there own and if it works for you that's all that matters....but please dont act as if you some how are better with your finances than me and the others just because you "dont give the government an interest free loan every year".

I was just telling my sister about this yearly rant!

My sister works for the IRS and she is from the "don't give the govt an interest free loan" camp also but has to admit there are very few places you can put money nowadays to earn any kind of decent interest. And the chances of breaking even are very rare, you either pay or get a refund.

She also knows every single loophole to dance around to make sure you don't have to pay taxes on certain income, something a privileged few have access to.

Of course, there will never be a "I don't get it" thread about THAT.

 

[tzolkin]

It seems many of the replies mention two things:

1. What's the difference of a "few extra bucks" each paycheck

2. Low interest on savings accounts, so not really losing anything

DH and I run a financial business and see families every day where these two are not the case. Regarding #1, some receive a well over $10,000 refund because they are married with kids but have their withholding set for single. A $20 or $50 difference each paycheck, no big deal, enjoy your return. But $1000 a month can make a huge difference in some families lives. As for #2, most of our clients have significant credit card debt at high interest rates (have seen 29.9%!). So waiting until they get a tax refund to pay toward their debt is costly. Also, many would not have to resort to using credit cards to buy necessities like gas and groceries if they had the extra money each paycheck.

 

[Minnesota!]

We prefer to get a large refund every year, one lump sum. It's more likely to be deposited into a savings account and stay there. We already save money monthly and do not need the extra money every week in our paychecks. It might make it more tempting to spend, I do have a slight vacation addiction... We know it's our money and that's what we choose to do with it. I'm fine with loaning it to Uncle Sam, as long as I get it back.

This is us, exactly. I have no problem saving money. I just like having that large lump coming to me each March.

I get a bonus every February - ranges form 1% - 10% of my gross. Plus, my OT varies GREATLY year to year. I could never accurately predict what my final take home will be. Our refund this year was 1/2 of what it usually is b/c I made a lot more in OT last year than in previous years. It's still enough to do what I want to do with it, though...so I am not complaining!

 

[KalamityJane]

We lived in a high state tax state and so I had it set up to get a refund from federal to pay off what we owed to state. Generally, we came out a couple hundred ahead after everything was said and done. This past year, we moved to a lower taxed state and had a NICU baby and heavy medical expenses, and my husband lost his job and was off work for the month of Dec. Between the move, job loss, and medical expenses, we ended up getting a decent amount back that was unexpected but nice!

 

[sonofanarchy]

Exactly. Most people won't even notice an extra $20 in their check. But if you get $1000 in a lump sum you can use it for something "extra".

This.

 

[crz4mm2]

SOME people don't even pay taxes and still get a refund

 

[Janepod]

She also knows every single loophole to dance around to make sure you don't have to pay taxes on certain income, something a privileged few have access to.

I'm part of the privileged few!

(I know how to use Google.)

 

[Disneychick75]

Don't forget that if anyone has not signed up for the healthcare plan, they can take the penalty from your tax refund. It won't add up to much this year since the sign up deadline is 3/31. In:
2014 = $95 per person per year or 1% of your Income
2015 = $325 per person per year or 2% of your Income
2016 = $695 per person per year or 2.5% of your Income
2017 = Tax Penalty will increase by the rate of inflation going forward, or 2.5% of your Income
This is not meant to be political but just information some may not know. It may or may not influence people who use refunds as a form of savings.

 

[carrie1626]

A savings account pays just about nothing in interest these days. Nothing. If you aren't great at saving & budgeting, getting a big tax return is a great way to save up for a big purchase, and you really aren't out a thing, other than the $3.09 you would have earned in a year on your money.

I AGREE
how many of us would really keep the $$ in an savings account?
It's better to get it all at once to use as needed. At least that's what we do, we're not spending frivolously. We're paying property taxes and bills.
The $$ we get back would amount to next to nothing in interest. I save more in a week using coupons at the grocery store

 

[canadianjovigirl]

Doesn't matter to me how people choose to get their money .......one lump sum or not over paying the tax man monthly.

What really does baffle me about the USA taxes is that people can get back more then what they paid in for taxes as that never happens here. There is just no way you can get more back then what you paid in............guess its due to claiming all those credits that are talked about and we must not have them. No matter what your income is you owe some kinda tax money to the government so even with the credits we are allowed you don't get it all back.