State Taxes---vent

[kaytieeldr]

I have a silver lining for you:

If you did get a state refund, you would have to declare it on next years federal return...thieves.

I'm pretty sure that's only if you itemized and took your state tax refund as a deduction.

 

[ekatiel]

I'm inviting y'all to move to Texas!!! No state income tax at all. I had a boyfriend in college who simply couldn't believe it-- he called Austin and asked for the "state income tax department" to make sure he was doing his taxes right. They said, "The WHAT???" We do have high property taxes, though, anywhere from 2-4+%, depending on where you live. --Katie

 

[momof1princess]

we have the exact same problem, OP. we live in alabama and each year we owe the state about $100-$110 dollars, while we get a refund from the federal government.

 

[Heidijs]

I hear ya, my fiance and I get about $11,000 back between the two of us and we barely get anything from state!

 

[santa's surpriz]

If you have kids consider a 529 plan, some states will give you an additional benefit for investing in their state's college savings plan . I heard this bit was leary of the information I was getting. My state refuund was usually less than a hundred dollars. The last two years I received over $300! Now that maybe due to other circumstances as well but a portion of that is due from investing in a 529. ( I don't contribute much, slightly above the min. monthly contribution.)

 

[CobraBubbles]

I'm usually in the same boat. I owe or get very little back from the state.

This year I am confused. I moved in August to Texas (no state tax) from Michigan. So I guess I'm still going to have to file state tax w/ Michigan..don't know how that works yet.

 

[mommyof2princesses]

FWIW - I would rather owe money to the govt than get a refund. I plan it that way. I'd rather earn interest on it for a year than give it to the govt only to get it back.

Honestly, I've never understood the excitement over tax refunds. All a refund means is that the government has had interest free use of your money. Why is that good? I love paying in (well, love might be a strong word...) because it means I've had interest free use of money that I owed to Uncle Sam (and the state equivalent). If I get a refund, I feel like I've failed in maximizing the use of my money. I feel best when I owe the maximum I can owe without paying a penalty.

I am with ya! We would rather owe a little, then let the govt have an interest free loan!

We seem to always owe NC money every other year. Fed, we usually come out about even. We try to work it so the owing, getting back is as low as possble.

 

[ShanPooh]

The reason you owe the state is because most services (that aren't through your city or county) are through the state (Medicare suppliments/Medicaid/retirement, highways, state police, waterways, beach fronts, disaster recovery, etc.)
IE Californians state taxes are used when a forest fire breaks out and college used to be paid for there through state tax money as well. Louisiana paid for Katrina until they ran out of money, only then did FEMA step in.

 

[Cruise]

Okay, so how come I can get $2200 back in federal taxes, but yet have to pay $230 in NC state taxes? I just don't get it---they already have a sales tax of around 7% and tax us out the wazoo for buying a car, house, etc. Just doesn't make sense to me that I would have a nice refund from the federal, but have to pay part of it to the state. Anyone else in the same boat?

Marsha

In California, we'll pay 9.55% income tax this year. Our sales tax is 9.75%.

I get really bitter reading tax threads this time of year.

 

[wdwfan16]

One possiblity is due to your 401K. Some states tax 401K withholdings and then don't tax them when you withdraw them at retirement. The complany may be paying your taxes on the amount after the 401K is deducted.

 

[mistysue]

I'm usually in the same boat. I owe or get very little back from the state.

This year I am confused. I moved in August to Texas (no state tax) from Michigan. So I guess I'm still going to have to file state tax w/ Michigan..don't know how that works yet.

Be careful doing that- you have to file for the portion of your income earned while you were in Michigan. BUT the forms are written to sort of trick you into putting your full income in there. I had to do Ohio and Michigan last year, if I recall correctly Michigan was tricky but not hard, Ohio has this thing where you fill in the form online and it won't let you change it to be correct. It was a pain, but at least you only have to do one state.

 

[Toad_Passenger]

I know a lot of people like the idea of having a "zero-balance" with the federal government, but I love getting a refund. Maybe I'm not as cynical as other people are about the government, but I'm okay giving them an interest-free loan for the year to spend how they see fit (I trust them for the most part).

On top of that I'm not tempted to spend that extra money, and we get enough back every year that we are able to spend it together as a family.

I'm certain we could put the money away each paycheck and make it work for us. But, honestly, for what interest rates are on various accounts, it's just extra work that I don't see as necessary.

As to state taxes? Yeah I live in PA, and we usually owe a little bit because of interest/dividends on other investments. Nothing you can do about it.

We also have to file local income tax, as well. It's supposed to be 1%, but it looks like my company took out 1.5-2% this year, so I guess we're getting money back from them, too.

 

[Ava]

The same thing happens to me, although in smaller amounts. I usually get back a few hundred from the feds and owe the state less than $50.

I think I am going to get a bigger refund this year though, because my DD was born in April so I'll have a dependent for the first time ever. Plus we ended up paying a lot of out-of-pocket medical bills and adoption expenses (my partner is the birth mother, I'm adopting DD as a "second parent") that I am hoping to be able to deduct. Once I do my taxes & see where I stand I'll likely adjust my withholdings. I didn't do it yet because this year I'd rather get a big refund than owe a lot, even though I know I am giving the gov an interest-free loan.

 

[mommyof2princesses]

I know a lot of people like the idea of having a "zero-balance" with the federal government, but I love getting a refund. Maybe I'm not as cynical as other people are about the government, but I'm okay giving them an interest-free loan for the year to spend how they see fit (I trust them for the most part).

On top of that I'm not tempted to spend that extra money, and we get enough back every year that we are able to spend it together as a family.

I'm certain we could put the money away each paycheck and make it work for us. But, honestly, for what interest rates are on various accounts, it's just extra work that I don't see as necessary.

.

I don't think I have a cynical view of the govt using my money for a while. I just know I can make a little bit of money if I hold onto it in a bank account. In this economy every penny helps!

 

[Melissa]

Not sure but if I end up only owing the state of Maine a few hundred bucks I will be thrilled!!! I always get federal money back and owe the state.

 

[bettymae1121]

I know a lot of people like the idea of having a "zero-balance" with the federal government, but I love getting a refund. Maybe I'm not as cynical as other people are about the government, but I'm okay giving them an interest-free loan for the year to spend how they see fit (I trust them for the most part).

On top of that I'm not tempted to spend that extra money, and we get enough back every year that we are able to spend it together as a family.

I'm certain we could put the money away each paycheck and make it work for us. But, honestly, for what interest rates are on various accounts, it's just extra work that I don't see as necessary.

I'm the same way. I mean, there's a limit to how big I want my refund to be, because having a larger paycheck is nice too. Anything over about $1500 and I'd make an ajustment, but less than that and I'm happy. I'd rather get a refund than write a check. I know my over all tax payment is the same either way, but there is just something about writing a check for taxes that I hate! And the "lost interest" isn't a biggie, savings acounts pay, what? 1% or something stupid like that. Not worth it to be honest with you. And talk about forced savings, there is simply no way to get at that money pre-tax time!

 

[momof3Disneykids]

we are getting 6K fed. owe 300 state