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

[Disneefun]

With all the refund hoopla going on in other threads, I thought I'd ask who broke even this year. We came as close as we've ever come. We owe about $200 to the feds and are getting back about $300 for the state.

We make it a point every year to get as close as we can so we either don't owe big chunks or get a huge refund. I'm one of those who sees no need to let the IRS keep my money all year.

I'm happy. Anyone with me?

 

[Sadie22]

This is my strategy as well.

 

[LAH LAH]

I did not.

I think its most wise to come close/break even when you can, but there are many reasons why someone might be getting a huge refund that isn't related to how much you have withheld from your paycheck.

We adopted 2 "hard to place" foster brothers this year (hard to place being the systems term, not mine as they stole my heart when they were placed with us 2 years ago at 3 months and 17 months old) and due to the refundable adoption credit, our refund is $28,000+.

Not all refunds fall into the category of letting the government hold onto your money for the year.

 

[jmartinez1895]

I agree with PP. When I first started my taxes on Turbo Tax it calculated me as owing about 200 for state and getting a few thousand back for fed. After I entered my families medical expenses it changed to the state giving us back a about a thousand and the fed owing use several thousand.

 

[Pembo]

I did not.

I think its most wise to come close/break even when you can, but there are many reasons why someone might be getting a huge refund that isn't related to how much you have withheld from your paycheck.

We adopted 2 "hard to place" foster brothers this year (hard to place being the systems term, not mine as they stole my heart when they were placed with us 2 years ago at 3 months and 17 months old) and due to the refundable adoption credit, our refund is $28,000+.

Not all refunds fall into the category of letting the government hold onto your money for the year.

This is true for us. Ever since the Additional Child Tax Credit was instituted we get a refund every year and every year I calculate what we would get without it and we would just about break even. I like getting a little money back, it's better than having to pay.

 

[nunzia]

Pretty good year for us..we get back $247 from Fed and then owe $253 to state

 

[drinkme]

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.

 

[Four*Peas]

I try to break even every year but we definitely aren't this year. I just hope we don't owe!

Holy moly on the $28k refund! And congratulations on your two new additions!

 

[Dacky619]

We are pretty close to being even. DW doesn't have any tax taken out, we usually owe, but we bought a house plus I'm back in school, so with those adjustments we are looking at a small refund.

 

[LAH LAH]

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.

Three words: Earned Income Credit.

It's not something you change your withholdings for. If you have a low enough income the government, for some odd reason, makes up for it with EIC. It usually equates to thousands of dollars on the refund. I am sure some get thousands of dollars back just by having the wrong withholdings, but the majority of the larger returns are due to EIC. (but then again, our huge refund has nothing to do with EIC, so what do I know?)

I try to break even every year but we definitely aren't this year. I just hope we don't owe!

Holy moly on the $28k refund! And congratulations on your two new additions!

Thank you! I hope you don't owe as well!

 

[Chelley00]

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.

Some people don't feel they are disciplined enough to save that $200 a month, and when the big check comes they can just sit down and write a bunch of checks an the money is there.

I try and keep ours close ao we dont get big refunds or have to pay, but we qualified for the medical expense credit, so we are getting a large refund. I hate that (but I'll take it!)

 

[Claire&TheBoys]

We're usually closer than we are this year. My husband got some additional pay from the Army in 2011 that had a flat withholding of about 25%. Since we generally wind up with an effective tax rate of about 15% or less, there wasn't much we could do about it. I could have changed his number of allowances and not had any more tax withheld during the year, but I wasn't sure exactly how the extra pay would affect our bottom line on our taxes, so I didn't. We still don't get back a huge chunk, a few thousand, but would definitely rather get that back than pay it in at one time.

 

[bumbershoot]

I haven't done the taxes yet, still waiting on one more thing, but we definitely try to break even. But we now get stock grants, and they take SUCH a high amount of taxes from it that we're finding it really hard to do it. DH keeps changing the witholding to the point where he's actually embarrassed about it, and it still doesn't come out even.

Of course, we LIKE the stock grants, so we'll keep on dealing with it.

 

[mrodgers]

Three words: Earned Income Credit.

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.

 

[DawnM]

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

I did not.

I think its most wise to come close/break even when you can, but there are many reasons why someone might be getting a huge refund that isn't related to how much you have withheld from your paycheck.

We adopted 2 "hard to place" foster brothers this year (hard to place being the systems term, not mine as they stole my heart when they were placed with us 2 years ago at 3 months and 17 months old) and due to the refundable adoption credit, our refund is $28,000+.

Not all refunds fall into the category of letting the government hold onto your money for the year.

 

[Marionnette]

We aim to break even or come close to it every year. You pay your taxes quarterly if you own a business. Our accountant calculates those quarterly payments based on the previous year's income. That works out fine if business remains the same each year. Last year, we got a refund because 2010 wasn't a good year. Income is up slightly in 2011 and so we expect to be paying. I don't think that we've ever had a year where the amount was exactly zero.

 

[DawnM]

We come close, but there are some things we can't calculate exactly.

Dawn

 

[kinntj]

We come close, but there are some things we can't calculate exactly.

Dawn

We try to come close too, but like you said, it's not always an exact science. We always pay into the state.

 

[MinnieVanMom]

We owe, that is just how it is and we know that.

 

[auger]

We too are small business owners, so we pay estimated taxes based on the previous year's income. If we see we are having a really good year, I guess we could pay extra in our est payments, but I prefer to set the money aside and hold onto it to have it ready if it is owed.

There's only so much you can do to try and stay even in a small business situation.
We have done fairly well most years, but a couple of years ago, when the economy first went south, we ended up with a refund around $9K because of the drop in business from one year to the next.
We were legally bound to base our est pmts on the previous year's income, so even though we knew business was crap, we had to pay in. That resulted in the huge refund.

So, it really isn't always easy to break even. We did this year, but that's because business was almost exactly the same as last year.