IRS refund cycle

[timmac]

All of the talk on this thread about repairs to do, bills to pay, excitement for getting the refund sooner... I can see getting a huge refund when circumstances change or there are unexpected events during the year... but if things are steady- same job, same house, average medical expenses, why not adjust your W-4 witholding to a proper level? Then you don't have to wait at all, you already have your own money when it's yours. :confused

 

[happygirl]

All of the talk on this thread about repairs to do, bills to pay, excitement for getting the refund sooner... I can see getting a huge refund when circumstances change or there are unexpected events during the year... but if things are steady- same job, same house, average medical expenses, why not adjust your W-4 witholding to a proper level? Then you don't have to wait at all, you already have your own money when it's yours. :confused

Things are never that simple.

 

[tms295psu]

All of the talk on this thread about repairs to do, bills to pay, excitement for getting the refund sooner... I can see getting a huge refund when circumstances change or there are unexpected events during the year... but if things are steady- same job, same house, average medical expenses, why not adjust your W-4 witholding to a proper level? Then you don't have to wait at all, you already have your own money when it's yours. :confused

That's where the tax rules make you scratch your head... depending on income, dependents, etc... the government actually send people "refunds" beyond what they paid in!!! Ie. Average Single Parent w/ 2 dependents might have paid in $2000 (withheld from paychecks) but the Fed tax refund might total $5000 +

 

[sam_gordon]

All of the talk on this thread about repairs to do, bills to pay, excitement for getting the refund sooner... I can see getting a huge refund when circumstances change or there are unexpected events during the year... but if things are steady- same job, same house, average medical expenses, why not adjust your W-4 witholding to a proper level? Then you don't have to wait at all, you already have your own money when it's yours. :confused

I tried to do that. I sat down with my HR person at work, knowing how much comes out of my paycheck & my wife's paycheck and how much we get back in February, and we couldn't get the two to match.

Honestly, we don't get enough back for an entire vacation (actually about 25%), but it is a nice chunk of change.

 

[AmandaRG]

Things change from year to year, so while it would be great to be able to have an exact amount withheld, changes can occur during the year that affect that amount. We try to hit it "just about" and don't sweat if we have to pay in a little more with our return or if we get a bit back. We don't want a huge chunk back, but you never know how some of those mid-year tax tweaks are going to affect your return!

 

[timmac]

Things change from year to year, so while it would be great to be able to have an exact amount withheld, changes can occur during the year that affect that amount. We try to hit it "just about" and don't sweat if we have to pay in a little more with our return or if we get a bit back. We don't want a huge chunk back, but you never know how some of those mid-year tax tweaks are going to affect your return!

That's more what I'm referring to... I know it's hard to be exact, and there may be _some_ change; it's when I see the year-after-year expectation of large refunds, that makes me scratch my head a bit.

 

[sam_gordon]

I guess it depends on the definition of "large".

For some folks, $500 is "large". But assuming you get paid every two weeks, that's ~$19 more in each check.
For some $1000 is "large". But now that's $40/check.

 

[reginaastralis]

Oh this makes me excited, lol. I have all of my paperwork, but I couldn't remember the first day you could file, and I was too lazy to look. Thanks for this!

 

[mrodgers]

All of the talk on this thread about repairs to do, bills to pay, excitement for getting the refund sooner... I can see getting a huge refund when circumstances change or there are unexpected events during the year... but if things are steady- same job, same house, average medical expenses, why not adjust your W-4 witholding to a proper level? Then you don't have to wait at all, you already have your own money when it's yours. :confused

What happens when you work all year on schedule to make $55,475 and put $2000 throughout the year into 401k, then the final week of work, you end up with $50 worth of overtime, or your employer gives you a $50 Christmas bonus. That puts you to $55,525 which cancels your $2000 retirement savings tax credit and now you owe $2000 that you don't have because you couldn't plan on it.

Next year you plan for that and work a few less overtime hours, now you have that credit again and are refunded $2000.

For the big buck salary management people, it's easy to say that when everything is consistent. For those who do the work on hourly, not so easy.

 

[tms295psu]

What happens when you work all year on schedule to make $55,475 and put $2000 throughout the year into 401k, then the final week of work, you end up with $50 worth of overtime, or your employer gives you a $50 Christmas bonus. That puts you to $55,525 which cancels your $2000 retirement savings tax credit and now you owe $2000 that you don't have because you couldn't plan on it.

Next year you plan for that and work a few less overtime hours, now you have that credit again and are refunded $2000.

For the big buck salary management people, it's easy to say that when everything is consistent. For those who do the work on hourly, not so easy.

**Note Sarcasism** That's when you refuse the overtime (or work free of charge) and refuse the Xmas bonus...

My boss talked of a former employee at a different company that REFUSED a RAISE becuase she would lose her "assistance"... in the long run she would have had less $$$ in her pocket for taking a raise. Go figure!

 

[nowellsl]

The withholding calculator on the IRS website has always been fairly accurate for me. I can see were it might not be that great for hourly employees, or if you have more than one job, etc.

 

[mrodgers]

**Note Sarcasism** That's when you refuse the overtime (or work free of charge) and refuse the Xmas bonus...

My boss talked of a former employee at a different company that REFUSED a RAISE becuase she would lose her "assistance"... in the long run she would have had less $$$ in her pocket for taking a raise. Go figure!

That's funny because when we had our first daughter, I missed qualifying for WIC by $0.07 per hour wage. I joked with my wife that I should ask for a 7 cent pay cut. I probably should have because then we wouldn't be in the mess I am still trying to dig ourselves out of since my wife went back to work 3+ years ago. All that dang formula is expensive!

 

[ksloane]

Thanks for posting. I will start inputting my information as soon as I get my w-2 and then update until I get the last one so that I'm ready to go asap.

 

[sam_gordon]

What happens when you work all year on schedule to make $55,475 and put $2000 throughout the year into 401k, then the final week of work, you end up with $50 worth of overtime, or your employer gives you a $50 Christmas bonus. That puts you to $55,525 which cancels your $2000 retirement savings tax credit and now you owe $2000 that you don't have because you couldn't plan on it.

I don't understand. Are you saying you've put $2K through the year in your 401K "pre-tax"? If so, and then you go over the credit (if I understand it correctly), you would owe TAXES on the $2K... you don't owe the $2000 itself.

 

[timmac]

I don't understand. Are you saying you've put $2K through the year in your 401K "pre-tax"? If so, and then you go over the credit (if I understand it correctly), you would owe TAXES on the $2K... you don't owe the $2000 itself.

There's a retirement savings tax credit, but you can only claim it if your taxable income is below a certain threshold. Thus, if you're right near the cutoff, a few extra bucks income could kill your eligibility to take the credit, and affect your tax liability substantially.

As is (hopefully) obvious, in my original post when I talked about something happening that changes ones situation, this would be another good example of it.

 

[DisneyBabies]

Not always. Our W-2 is always several thousand different from the last paycheck because of pre-tax/post tax deductions.

I figured out the formula they use to get numbers for the W-2 by using the last paystub from the previous 5 years and compared it to the W-2's from those same years. It took me a while, but I managed

It ended up being the same for all five years and I have used this method for the last 3 years and have been right each time. This is easier for me than waiting until Febuary 15 for my DH's W-2 (his company "mails" them on the 30th, but for some very odd reason, we never get it quicker than the 30th).

 

[jackirkh]

Kinda off topic but an interesting story...

Last year I received my refund and immediately noticed an peculiar mistake on the check. My the name on my check was just my last named twice separated by my middle initial. To illustrate, the check read "Johnson A Johnson". I thought it was pretty funny but I didn't get the check back til about August. I think Ill use DD from now on!

 

[NYCDiane]

I filed today with Turbo Tax but they said the IRS isn't officially accepting returns until the 17th. If all goes well, I'll have my refund by the 25th! I can definitely use it to catch up on and pay off some bills. Whew!!!!!

Funny, though, they always did direct deposits on Friday. Now it's on Wednesday? Whatevs, I don't mind getting it 2 days ahead of time!

 

[2magical]

Thanks for the info about Turbo Tax not accepting official returns until the 17th, good to know.

 

[NYCDiane]

Thanks for the info about Turbo Tax not accepting official returns until the 17th, good to know.

No, I did my taxes on Turbo Tax and e-filed through them. They said the IRS isn't "officially" accepting any returns until January 17th.