Inspired by tax return thread... let's talk $$

[Zmsksirt]

I agree that it works for some people. As I said, that's just fine if it does.

I'm not sure I agree that the government stays out of it, though. They are the ones who are able to hold your money all that time and not have to pay you any interest. Wouldn't it be nice if that practice was discontinued and they were forced to pay you a fair interest rate on your overpayments? Then this whole debate would go away.

Why should the government pay for a mistake made by the taxpayer? Each taxpayer has the responsibility to manage their own money. If the government is withholding too much money, it's easy to reduce the withholding amount. It's the taxpayers job to determine withholding. It's not the governments job.

 

[disneysteve]

Why should the government pay for a mistake made by the taxpayer? Each taxpayer has the responsibility to manage their own money. If the government is withholding too much money, it's easy to reduce the withholding amount. It's the taxpayers job to determine withholding. It's not the governments job.

Good point. Hadn't thought of it that way. I guess the "cost" of getting a refund is losing the income that money would have generated.

 

[Planogirl]

I don't know. Interest on savings is pretty lousy IMO.

I guess that it really depends on how much money you're talking about. I see some posters talking about some huge amounts of money and personally, I can't even relate to that!

 

[tubachick]

as a single person the most I ever got back was 900, when we got married the most we have received is 4000 and this year we bought a house, so I'll keep you posted when I finish the taxes for this year.

 

[luvsmickeymouse]

I don't know that I'd call it more "responsible" but it's profitable. I withhold the absolute minimum. The money that would be deducted, if I followed the IRS's recommended withholding, I have automatically placed in a high interest savings account through direct deposit. When April comes I pull the money out of that account to pay the IRS. I make $$$$ of INTEREST per year doing this. Let your money, make you money.

Where do you get a high interest savings account from these days? Wouldn't you still have to pay taxes on this interest? I would be interested to hear more.

 

[Zmsksirt]

I don't know. Interest on savings is pretty lousy IMO.

I guess that it really depends on how much money you're talking about. I see some posters talking about some huge amounts of money and personally, I can't even relate to that!

I agree with you. I just use my savings and checking accounts as places to park cash that I need for normal expenses and possible emergencies. The interest on bank CD's is lousy too. You won't even keep pace with normal inflation. To get a good return on an investment, you must dollar cost average your money into no-load mutual funds, municipal bonds and other secure instruments.

It's unfortunate that so few people take the time to manage their money and instead rely upon their employers or the government to plan for retirement.

 

[staceyfe]

Where do you get a high interest savings account from these days? Wouldn't you still have to pay taxes on this interest? I would be interested to hear more.

ING Direct (online only). The rate is 3.8% w/ no minimums or fees.

 

[TDC Nala]

Maybe 3 grand or so. The government pays me, so maybe it's okay to give it an interest free loan. Maybe if I gave it more, my agency could actually get some toner cartridges and rubber bands for our office.

 

[disneysteve]

ING Direct (online only). The rate is 3.8% w/ no minimums or fees.

There are several money market funds now paying well over 4%. ING is not at the top anymore.

 

[Honu]

ING Direct (online only). The rate is 3.8% w/ no minimums or fees.

for short term, this is the place!

 

[disneymom3]

Maybe 3 grand or so. The government pays me, so maybe it's okay to give it an interest free loan. Maybe if I gave it more, my agency could actually get some toner cartridges and rubber bands for our office.

Now THAT is funny! I have no idea how much we are getting back. I was self employed the last two years and didn't pay quarterly taxes because of not having any taxable income the first year. I just don't want to owe and I don't think we will. I just ahve a hard time taking money out of savings once it has been put in there and wouldn't want to take it out to give the IRS.

We always get a refund and I have done the calculator at the IRS website to see how many deductions DH should claim on his W-4 and the last time I did it it told me 14! So yeah, I guess we'll be getting some back since he claims 5!

 

[disneymom3]

There are several money market funds now paying well over 4%. ING is not at the top anymore.

But the beauty of ING is there is no minimum and no length of term as well as no fees of any kind.

 

[disneysteve]

But the beauty of ING is there is no minimum and no length of term as well as no fees of any kind.

All of which is also true of PayPal's money market account, currently paying 4.25%, or nearly 1/2% higher than ING. They are now the top rated fund in the country.

 

[vivilasvegas]

Actually, I'm confused. How do you control what you get back??

All I know is I claim 1, my work takes out my taxes, just me on my tax return, no houses, and I get back around $1000. Sometimes less.

So, I guess I don't understand the disagreement. I'm still doing what my dad told me when I first started working!

No one has answered my question. How do you control what you get back?

In simple terms please, I'm slow.

 

[jekajekalynn]

Thanks to education expenses deductions, donations, whatnot and so on deductions.. We are getting back the most money we ever got this year. We should be getting back around 4k this year!! Woohoo! lol Enough for WDW AND some to put in savings.

 

[zippeedee]

No one has answered my question. How do you control what you get back?

In simple terms please, I'm slow.

You adjust your withholding on a W-4 form with your payroll dept so they take less from each paycheck if you want to avoid giving the govt an interest free loan. If you want a big refund, ask them to withhold more. There is a chart on the back of the form that helps you figure out how to adjust the withholding. If someone else does your taxes they can do a new W4 for you at the same time.

 

[Free4Life11]

If you deduct tuition, does that come right off the top or is it a percentage? I started my taxes via turbotax yesterday and the program hasn't updated for that yet.
If I paid say $2,000 out of pocket, not a loan or anything it went straight to the bursers office, how is that computed?

It comes right off the top. The school should send you a Form 1098-T. It should list qualified amounts billed as tuition and fees. I don't believe it lists how it was paid. Paying with a loan DOES count for this deduction, provided that you took out the loan withing a resonable period before or after the tuition was billed. You *do* have to deduct certain scholarhips and whatnot from the tuition billed, so it's important to refer to the Form 1098-T.

ETA: http://www.irs.gov/publications/p970/ch06.html (information from the IRS on Tuition and Fees deduction)

 

[staceyfe]

All of which is also true of PayPal's money market account, currently paying 4.25%, or nearly 1/2% higher than ING. They are now the top rated fund in the country.

This is good to know. I just transferred emergency fund $$ from my savings (.75%) to checking yesterday and am going to transfer that to a higher yield money market. I was considering ING but I will now shop around. I have other funds in a 30day CD which is only paying 2.9%. I thought that was pretty good until I started looking around. Honestly, I'm not sure about Paypal, though. They make me a little nervous. Don't ask why, because I'm not sure myself. It's just a gut feeling.

 

[disneysteve]

Honestly, I'm not sure about Paypal, though. They make me a little nervous. Don't ask why, because I'm not sure myself. It's just a gut feeling.

I think PayPal has gotten a bad reputation because some buyers and sellers have had issues with them related to ebay transactions. But that is virtually a seperate business from their money market account. Financial accounts like that are all tightly regulated. I can't just go and open up "Steve's Money Market Fund" and start advertising and collecting deposits from folks.

Even if you don't use PayPal for ebay, you can still open a money market account and get THE HIGHEST interest rate in the country. They were even listed as such in the current issue of Money magazine which I consider a pretty reliable source of financial information. I don't think Money would be recommending them if there were any significant issues.

 

[disneymom3]

All of which is also true of PayPal's money market account, currently paying 4.25%, or nearly 1/2% higher than ING. They are now the top rated fund in the country.

I was not aware of that! Thanks for the info Steve!