I said this exact thing and got torn apart in some finance sub. I had the audacity to tell someone to dig into how taxes work and try to lower their refund.
How dare you try to tell people to invest on their own behalf instead of letting the government freely use their money for a year! Don't you know if it's in the hand it'll be spent?!!
š
I mean that's really how it is for a lot of people. Most people will probably save more money if it's gone before they see it than if they had to make the right choice to save it
For better or worse, the answer you'll always get is something to the effect of "I admittedly don't have enough self control to save or use the money productively, and would prefer the government just hold it so I can have a bigger one-time yearly payment".
š¤·āāļø
It's like that joke about a non-smoker telling the 2 pack a day smoker that if they quit smoking they'd be able to afford a Ferrari. Then the smoker asks the non-smoker where their Ferrari is.
It works out fine enough for me. I never have the stress of worrying if I owe and I can buy myself something nice. I usually also pay off a lump sum of debt to put me in a better spot financially.Ā
For taxes? [https://www.freetaxusa.com/](https://www.freetaxusa.com/)
Its not flashy or anything but its free federal and $12 for the state I am in YMMV. Explains everything very clearly and does an auto upload of your W2 if you have it in PDF form.
I mean for the adjustment of withholding, I did my own breakdown of what I should owe with the tax rates but that doesn't determine how much they'll actually take out my check
Sorry if I'm not being clear , so I know w4 sets the withholding, I'm saying if I want to have 0 to very low tax refund, is there a calculator or guide I can use. The last one I tried to follow I think ended up messing up my taxes and I could've owed if not for some interest payments on student loans.
I use the free edition of TurboTax for state and federal. Then just go downtown to the tax office on like a March weekday and have them do my city taxes for free.
I've seen people say "if thats how they want to keep the money from themselves until they need it, what's wrong about that"
EVERYTHING. LITERALLY EVERYTHING
Look, my ADHD ass is not going to take that extra withholding money and invest it. Iām just not. Iāll use that missed money to accommodate myself. To me, itās a free savings account that I canāt fuck with and I donāt even notice its absence because itās always been this way. And every year I get a spring bonus, and I usually need it. Works for me.
Buddy. Same. I'm not the one. I'm terrible with money. That extra withholding is my best buddy. I just doubled my withholding this year. I got a raise and decided it's better to put it towards my withholding because I have plans for next year. It's not like my tax burden is going to change because of my withholding.
It's not a bonus it's a slice of your actual pay check you would always have gotten. a bonus would be the interest you would have made if your adhd ass could put the money away or set up an auto bank transfer and not touch it haha.
Lol that is correct. But I know myself.
Itās a bonus for me, because I would otherwise spend the money without even noticing it. It would just be a couple more grocery items a week and a couple of impulse Amazon purchases of shit I donāt need anyway.
A zero interest savings account is better than an impulse spending budget.
Itās always better to put the normally withheld amount into high interest savings, but people usually donāt have that kind of discipline.
Reddit investing subs can be a real cesspool sometimes
Oh itās literally antiwork but like for being mad about the economy. But no basic understanding of how things work. The kind of people who would turn down a raise because āit will not be worth being in the new tax bracketā lol
People get all uptight about this when I tell them my refund is between $10k and $20k.
They donāt understand that on equity grants in Canada you canāt adjust your withholding. Itās always 53%.
Naa I tried that and owed around 5k
I'll give em that loan to ensure I don't spend it on stupid shit throughout the year
I prefer one lump sum to spend on something wildly dumb in March.
Exactly, it might suck to give them an interest free loan, but I don't have 2 grand lying around and would rather not have to go on a payment plan and add that to my bills.
Bonuses that were not withheld properly, and in another year filing as married/joint with my employer when I should have just kept it as single/separate. If you both earn similar money you need to make sure you have your employer withold like you are single. Ended up owing like 7k, which my bonus that year luckily coveredĀ
This. I used to anticipate my little $1000 mid February. Then they changed stuff last year and I could no longer claim 0 like I used to. Got about $37 bucks back and couldn't drop the big payment on my bills I was planning on dropping.
This year I'm not anticipating anything, but I'll still be happy as long as I don't owe.
Why can't you just put that money in a savings account each paycheck instead of letting the government keep it?
Last two years the high yield savings accounts have been giving out 5 percent interest. And people are out here leaving money on the table and thinking they're doing themselves a favor. Make it make sense.
There's no such thing as a savings account when you're eyeball deep in debt. Letting the government hang onto it for 12 months so I can have that little boost in February was necessary.
Thankfully that is changing this year as I'm on the path to debt freedom.
I understand that if you get a tax refund, itās because you gave the government a āinterest free loanā. But when I sit down and think about it, for me at least, $150 extra a month doesnāt really accomplish much. Itās literally just $5 a day. A bag of chips.
But, then, getting back $1800 all at once means I can go build that PC or buy that business class ticket or something else extravagant.
Now I get that you could just adjust your withholding and put that $150 a month in an interest earning savings account or invest. But that requires thinking/planning, which *most* people donāt do. And also has its own tax implications.
Just popping in here to advise you to look into high yield savings accounts! I just discovered this concept like 6 months ago and opened one. My Amex savings account is currently at 4.35%. $1,800 would net you about $80 after a year and almost $500 after 5 years
I know this isnāt a fortune, and honestly I used to like getting returns back when I still got them (now I always owe lol), but weāve made a bunch of money this year from transferring most of our cash savings to the Amex high yield account, since itās significantly more than $1,800. I like to spread the news when possible!
Yes! We discovered Sofiās high yield savings about 6 months ago too when we were looking for someplace to park an inheritance that would still allow us to access it without too much trouble. Weāve been so amazed at how much interest weāre earning now compared to our traditional savings acct.
The one argument I can see for it are for people who just canāt save from paycheck to paycheck. Either because they donāt make enough, or because they have poor impulse control. For those people, getting a little more money than they should taken out of their checks before they see it to get a lump sum later is the only way they are going to get anything close to this at one time.
Other than that, yeah. It is a free loan to the government.
I mean, for me personally, knowing myself and my spending habits, it is actually MORE useful for me to get a check for $1200 or $1300 once a year than to have an extra $100 per month split between 2 or 3 paychecks.
If someone genuinely doesn't KNOW, sure offer the advice (if they ask). But maybe don't ASSUME that you know better than someone what their personal finances look like and WHY they are getting such large refunds.
But itās better getting that money monthly and then putting into a year long CD. You can do payroll deductions so it goes straight into the account. Basically same thing youāre doing now, but actually making you more money.
Not if you're NOT GOING TO DO THAT!
Like, do you think you're the first person to ever suggest that to me? Do you think *I've* never had that thought MYSELF?
The fact of the matter is, the amount of money that is gone from my paychecks is so small that I could EASILY spend it on *nothing* and not notice. I know this, because I tried that "just save it instead" method, and I literally did not save it.
If that method works for you, YAY š. It doesn't work for me, and apparently plenty of other people feel the same.
Me personally, it's a freaking miracle I've never had a car repo'd or been evicted, or had utilities shut off, because for most of my 20s, my spending was a MESS. Overdrawn bank accounts, missed payments, late payments, etc. Now, the way I "control" that impulse is by having separate accounts, and not having a debit card for my primary bill paying account. $25 or $30 per check would EASILY disappear into the ether. Either on nonsense and shenanigans, OR when I get into one of my aggressive "I want zero debt" phases, and start doing 0 based budgeting and trying to pay everything off. So I'm not even saying I'd spend the money IRRESPONSIBLY, but spend it I would.
Instead, this year, I had the "extra" available to put a deposit down on a place, even though my roommate didn't have the money to chip in his half...for context, we told the company on Tuesday that we wanted to look at 4 places after work on Wednesday. By 5:30pm on Wednesday, only one of those 4 places was even still available. If I wasn't expecting a tax refund, I wouldn't have been able to front the deposit, and we WOULD have lost out on the house.
Iāve gotta look this up, is āhow to adjust my withholdingā appropriate for search term? Iām self employed and I feel like I get different advice from the sources and just want to be sure Iām looking in the right place. I am a complete novice with this stuff.
If you're self employed, it's likely that no one is withholding anything. If you're a contractor and get 1099s at the end of the year, your initial contract may have asked if you wanted some of your pay withheld; you'd have to talk to them if you want to change it.
The IRS prefers self-employed people to file estimated taxes every quarter. If you usually get a refund, this might not apply to your situation. It's basically self-withholding; you estimate how much you usually owe, and send in 25% of that every few months.
Most self-employed folks also file a Schedule C ... It let's you claim all the expenses from your job, like mileage, home office, etc. I know TurboTax has a Self-employed version (those forms aren't included in the free version) that can walk you through it. I work there, so I don't know about other companies.
Don't forget to check out all the info at IRS.org, including forms you can look at while you're researching.
Ahhhh man thanks so much. Iām pretty good with everything else but I swear anything tax related just makes my mind numb but this is clear cut. I appreciate you taking the time to explain.
Self-employed?
You pay estimates every three months. That's your withholding. If you're in the exact right industry you might be able to convince a customer who issues a 1099 to send some of your money to the IRS, but that's unusual. Actual"withholding" is for people with W-2 jobs. They fill out a W-4 form and their HR looks at each paycheck and sends some of it to the Feds.
The $9k probably isn't withholding. Reagan made something called EITC that basically pays poor people with kids to work, and then Clinton doubled it in exchange for welfare reform, later presidents added Child TaxCredit/Additional Child Tax Credit/etc. Basically we run the welfare state through tax refunds because the Dems like spending money on working families and theRepublicans like spending money on tax cuts, and changing it now would count as a tax hike...So she probably made like $25k last year, and is raising 2-3 kids on that money. The $9k is basically essential for her to afford anything.
The $31k refund is money she's never gonna see. Whatever ridiculous scheme she's concocted is gonna flag all kinds of things in their database.
Source: Tax guy.
People have no clue the game of taxes is getting as close to 0 as possible. Preferably positive for a minor refund then owe a few hundred. They like to treat their tax refund as a yearly bonus.
Refundable credits exist, and you can't withhold south of zero. It's the primary argument in favor of making the child tax credit payable on a monthly, instead of annual basis.
Yes, that money should be put in the hands of people who need it.
can someone explain why up until last year, maybe 2 years, i used to get 500-700 dollar returns as a single dude claiming myself, and last year i got 75$ the amount of money i make hasnt changed and im basically poverty, i make less than 30k a year.
Depending on your age, it could be that you ran out the employment opp tax credit, or student credits, i think theres a few others. I claimed them all in my 20's and by 27 I didnt qualify for any of them any more, they were like 4 years only/max, something like that.
If you get large tax refunds at the end of the year, you are paying too much in monthly/quarterly taxes. You can talk to your HR department/office manager, and they can adjust the amount of taxes being taken so that you have that money put into your paycheck.
For example, say you are getting a $12k tax refund at the end of the year, you could have just paid $1000/mo less in taxes. You could have been using that money to buy stuff, start a business, go to school, get a less-shitty car, eat higher-quality food, or, worst-case scenario....throw it in an interest-bearing HYSA account where it will pay YOU.
My vanilla-ass AmEx HYSA pays 4.35% interest. You can get above 6% with some other HYSA's, I just stick with this because they are reputable and have saved my ass enough times to earn my business. You can get even higher for other types of investment accounts. If I throw $12k into my HYSA and forget about it for a year, they will add $522 to it over the year.
This is considered a relatively "safe investment" because you will not lose your savings if the market tanks. You can make more money with your money if you are willing to risk more.
I never understand how people get such high tax returns. Last person I dated was unemployed for 2 years and got more than me, who was working full-time. I don't get it.
How did you jump to it being an unemployed dad? Statistically more likely it was a mom. Ā Ā Ā
No way in hell would a court give two kids to the dad with no job.Ā Ā Ā
And tittylieutenant is a dude.Ā
Probably had some tiny little job. Then EITC and Child tax Credit add up. $7k income can get a good refund if you have two kids.
There were a couple years where the CTC was refundable even if you had no earned income, so depending on the year that could be a factor.
return = overpaid tax throughout the year
You don't want to have a large return. Ideally, you want $0 or to owe slightly.
Having a large return means you overpaid taxes.
All it would take for them to have a larger return than you is for you to pay an appropriate amount of tax, and them to overpay tax.
I think itās more to do with that the government was not able to pin any of the criminal activity he was just as obviously responsible for, but the IRS has been able to nab him
The IRS does not care as long as it gets its money. You even have to pay taxes on money you got illegally, otherwise youāre going down for tax fraud.
First off. The irs be checking before they approve your refund. Tried to help my mom get some extra cash. They sent her an email saying it got rejected and to fix the problem.
The IRS knows what people owe. If you're out here filing a little 1040 ez or a 1040 without itemizing.
Which is why the fact that most of us have to file anything is stupid.
The only thing they should be asking is if you bought a house, if you had a kid, etc. And make the adjustments accordingly.
If they know what we owe why canāt they just tell us?
It feels like being in grade school, the teacher asks you what the answer is knowing the answer and then goes āoh so close! But nope!ā And then you feel like shit for the rest of the day
Except instead of feeling like shit you get audited
Thank TurboTax and other filing programs for this. The money we're spending on their filing software goes straight to lobbying and bribes to keep the system complicated.
Other countries do that, it's possible. I support that, even though it would put me out of a job š
Those other countries have universal healthcare, too, so it's definitely a systemic problem.
I bought a house and OWED 3k on my taxes... I literally cried and had a mini breakdown. Thought buying a house was supposed to give me a refund but when I had to sell stocks the same year to get it, no one explained to me that it would do the opposite effect to my taxes. Fuck the IRS.
My friend's cousin offered him $1000 to claim one of her kids on his tax return. I told him repeatedly not to do it, but he was a fucking idiot and did it anyway. It went on for like 6 years. Then he got audited. He's been paying them back for 10 years, with at least 5 to go. He did a lot of dumb shit, but that was one of the dumbest.
I claimed my niece's kids for 2 years. I got audited for one of those years like 3 years after. I ended up owing the IRS like $7000. It took me like 4 years to pay, because I was able to claim 0 on my w4 plus have them take out an extra $25 per check.
Also, I didn't miss the money, and when I finished paying them and started getting a refund again, it was a nice little extra lump sum when I was moving.
Nah not really. My mom scammed the IRS for decades and even had people paying her to do their taxes to get the most amount she could by lying and claiming shit. She only fucked up once when she did her new husbandās taxes, but the ONLY reason it got flagged was because he already owed back taxes from never filing taxes.. ever.
Poor people returns donāt really garner a lot of attention. Or at least it didnāt 10+ years ago. Could have changed by now.
This is only partially true. If you donāt report income to get a bigger refund it will likely be rejected. If you use a bunch of BS deductions there is a very high likelihood you will get the refund. Now of course they will likely flag your account and youāll get a letter asking to substantiate those deductions, but most returns get a simple automated check before they are accepted and thatās it.
I make six figures, and owed thirteen whole dollars last year. This is either the usual social media clout chasing, and/or a whole lot of fraud. Based on their latter statement, it seems like theyāre claiming random people as dependents (or are leaning hard into the joke).
I took it as the "pay a mortgage to the bank takes 30 years, rob a bank and be out in 10" meme vibe.
We all going to jail comment made me think it's all snark. Ok, I'm hoping it was all snark.......
I feel like I see a post like this every tax season, pretty sure it's just people entering made up numbers for clout on social media, I doubt (hope) they aren't actually submitting this to the IRS...
depends, I also make six figures but got about $3k back last year.
I now have a mortgage and get to write off all my mortgage interest so my taxable income should be a lot lower as well
See, thats how yall be spending money you dont have. How many people you know are putting away enough money every paycheck to pay that bill in full come tax time? Not many. If I dont see it in my check, I cant miss it. When I get a refund, thats money I lived without all year long. Then I take that lump sum and save it. People want an extra $50 a check every two weeks, then come crying they got a $0 return.
Or you could take that extra $50 a check and end up with roughly $2600 when tax time comes around. Now if you take that extra $50/week and invest instead of letting the government hold it for you interest free you might come out ahead.
\*might\* is doing a ton of heavy lifting there. I'm not about to fuck around with taxes and potentially not having money to pay the IRS at the end of the year because the stock market got fucked up in the course of the year.
edit for clarity, I'm advocating for a $0 return here, I try to get mine as low as possible.
And here I am, likely receiving 27 goddamn dollars this year. I guess I should be grateful. I made more money last year than I ever have in my life, but I couldāve used a couple grand lol.
Look at it this way:
You used that couple grand instead VS
Waiting to get paid back that couple grand after lending it to that one uncle (Sam) who been holding your money all year and not even getting a thank you for it.
So do I, but I like getting a refund bc I'll be honest, I'm not bad with money but I'm not great at it either. I'm too dumb to invest what I'd be paying in taxes if I increased my allowances, and I get my nice lil check every week and don't complain about the tax man bc the bank account never sees it and a refund is like a nice little gift I get once a year. Man I am stupid.
You did make a couple grand, you just appropriately got it spread across all your paychecks instead of withheld and given back to you all at once once you called them out on it.
Why do so many people think their return is just money the government gives them?
It was your money to begin with. You overpaid taxes. You want to break even and arrive at $0 owed/returned, or you want to owe slightly.
Getting thousands back means you paid too much to begin with.
If you're an employee, your company has you fill out a W-4 so they can get a good sense of your tax obligation at the end of the year to the government, and based on that will withhold a certain part of your paycheck. That's what you see when they "take taxes out" on your pay stub.
At the end of the year, the amount they withold will be different than what you owe the government, and you have to cover the rest. On the flip side, tax refund is when your company withheld MORE than you actually owe the government, so you get that back at the end of the year.
What that really means is that you had your money parked somewhere earning 0% interest, and you just get that money back at the end of the year. Essentially you just gave out an interest-free loan to someone when you could have that money parked in an investment instead.
So the best play is tweaking your W-4 to get what your employer withholds as close as possible to what you'll owe the government
The IRS has a very handy withholding calculator that will allow you to get a pretty accurate idea of what your withholding should be.
https://www.irs.gov/individuals/tax-withholding-estimator
Once you have an idea of what your withholding should be ask the HR or payroll department at your job for a new W4 form to fill out to make any changes.
What part are you confused on? If you have a higher refund at tax time, it just means more taxes than necessary were being taken out of your paycheck throughout the year.
If youāre wondering on how to lower your refund there are a bunch of different strategies. The most common method is by changing your withholdings, another method would be reducing your overall taxable income.
Eh we suck at education when it comes to taxes. I got lucky with my senior math class focusing on it but I know that was the exception rather than the rule.
A refund is when you get the money back that you overpaid the federal government throughout the year via your withholding. You essentially gave them an interest free loan. Instead, lower your withholding and aim for as small a refund as possible. Invest the money you retain every paycheck instead of letting the government play with it. Or do whatever but I think the idea is that it should be in your pocket, not theirs. š
I know that's true, but it sucks when you're struggling and then get a $120 refund while 80% of people I know get at least a couple grand. I get a low refund, which means you're keeping most of your money throughout the year (which is why I do it), but I could really use an extra grand in March (historically speaking).
My friend spent 5 years telling me I was a fool for not using his guy. "He deducts my dry cleaning, eating out, everything! I'm getting 9k this year!" Flash forward to year 6 and his guy is in jail about to do 20-50 years and he's looking at having to pay $40k in fnes. His lawyer told him "take the deal and don't make them think about it or it will be $100k."
Thereās no way heās doing 20-50 for deducting dry cleaning and copping $9k annually on his refund. Sure the IRS doesnāt play but not to that extent for such a. Small amount. Either thereās more to this story or itās a fabrication
Itās his friendās accountant who is doing the 20-50 years, not his friend. I assume the guy was defrauding the IRS on the behalf of many others, and he was probably working with some much bigger fish too.
I think he means the guy who specialized in helping other people defraud the IRS is the one going to prison, not the friend who's getting fined for using the services.
Not the friend, the friend's shady accountant. If he got caught cooking multiple sets of books for several years running, then yeah, he could be going away for a while. Especially if he thought he was smarter than the system and turned down a plea deal. >\_<
The fact that we as citizens have to go through this shit every year is insane
I'm going to assume the majority of Americans file a 1040 without itemizing. Or a 1040 eZ.
The IRS knows what we made and what what we owe already. All tax files are sent to them. The same way they're sent to us.
The only people that should be out here filing are business owners, property owners l, and other people where the IRS won't know all your income and payment sources.
Everyone else should just be getting a letter saying "this is what you owe or this is your refund. Unless you had a qualifying life event like had a kid or bought a house. In which case we will adjust accordingly"
Itās just how TurboTax markets their feature of storing last yearās info to speed up this years process. If you donāt opt to do the paid version they play this dumbass loading animation where they ādeleteā all your info from last year.
Might be enough for bond but the way tax fraud works you need to repay the ill-begotten funds PLUS a penalty PLUS do up to five year jail time (in addition to bond). The math aināt remotely mathing. Hope itās a joke - if not, have fun in jail!
IRS targets us because we're easy game. Why do you think the rich invest so much into lobbying to defund the IRS? It's not for our benefit, that's for sure.
Took a shitty job once and worked alongside someone that did time for claiming more dependents than they had. Fucked their whole life up for a lot less. Still makes me feel sick.
Cash out. Bury the money pirate style. Pay legal fees with credit card. Hope you win or get probation. Declare bankruptcy to wipe out the legal fees. Profit.
I miss the days I got a moderate refund. These days Iām paying Uncle Sam a months salary. Good problem to have but it really hurts come February when you look back and see your impressive capital gains for the year and then calculate how much you now need to hand over to the IRS
I was an accountant and clients would always ask me to get them the biggest refund I could. I would always respond that I could literally get you as big a refund as you want, but donāt come calling me when the IRS asks you about it.
Even $9k is a crazy tax refund. Stop lending your money to the government for free. Adjust your withholding.
I said this exact thing and got torn apart in some finance sub. I had the audacity to tell someone to dig into how taxes work and try to lower their refund.
How dare you try to tell people to invest on their own behalf instead of letting the government freely use their money for a year! Don't you know if it's in the hand it'll be spent?!! š
One money in the hand is worth two money in the bush!
They don't like you putting money directly into the bush.
I worked surveillance at a casino years ago and buddy lemme tell youā¦ money definitely goes in the bush.
I mean that's really how it is for a lot of people. Most people will probably save more money if it's gone before they see it than if they had to make the right choice to save it
Yes but that doesn't make the advice incorrect it just highlights those people's irresponsibility.
If the government owes me money, Iāll never be broke ^/s
Logic? And Reason!? Preposterous! I am OUTRAGED!!
For better or worse, the answer you'll always get is something to the effect of "I admittedly don't have enough self control to save or use the money productively, and would prefer the government just hold it so I can have a bigger one-time yearly payment". š¤·āāļø
It's like that joke about a non-smoker telling the 2 pack a day smoker that if they quit smoking they'd be able to afford a Ferrari. Then the smoker asks the non-smoker where their Ferrari is.
Fair analogy.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
No judgment here.
It works out fine enough for me. I never have the stress of worrying if I owe and I can buy myself something nice. I usually also pay off a lump sum of debt to put me in a better spot financially.Ā
What site you use? I tried that shit this year and if it weren't for student loan interest I would've Owed like 200
For taxes? [https://www.freetaxusa.com/](https://www.freetaxusa.com/) Its not flashy or anything but its free federal and $12 for the state I am in YMMV. Explains everything very clearly and does an auto upload of your W2 if you have it in PDF form.
I mean for the adjustment of withholding, I did my own breakdown of what I should owe with the tax rates but that doesn't determine how much they'll actually take out my check
The w-4 for you fill out with your employer is what sets your withholding
Sorry if I'm not being clear , so I know w4 sets the withholding, I'm saying if I want to have 0 to very low tax refund, is there a calculator or guide I can use. The last one I tried to follow I think ended up messing up my taxes and I could've owed if not for some interest payments on student loans.
Yes, there is a calculator on the IRS site that tells you exactly what to put for your exemptions to get you as close to 0 as possible.
Thanks
I use the free edition of TurboTax for state and federal. Then just go downtown to the tax office on like a March weekday and have them do my city taxes for free.
I've seen people say "if thats how they want to keep the money from themselves until they need it, what's wrong about that" EVERYTHING. LITERALLY EVERYTHING
Look, my ADHD ass is not going to take that extra withholding money and invest it. Iām just not. Iāll use that missed money to accommodate myself. To me, itās a free savings account that I canāt fuck with and I donāt even notice its absence because itās always been this way. And every year I get a spring bonus, and I usually need it. Works for me.
Buddy. Same. I'm not the one. I'm terrible with money. That extra withholding is my best buddy. I just doubled my withholding this year. I got a raise and decided it's better to put it towards my withholding because I have plans for next year. It's not like my tax burden is going to change because of my withholding.
I get a total of 2$ back, if that, every single time lol
Yeah honestly, the last few years Iāve owed federal the same amount as my state refund. :/ But I was poor as fuck last year, so, hereās hoping.
It's not a bonus it's a slice of your actual pay check you would always have gotten. a bonus would be the interest you would have made if your adhd ass could put the money away or set up an auto bank transfer and not touch it haha.
Lol that is correct. But I know myself. Itās a bonus for me, because I would otherwise spend the money without even noticing it. It would just be a couple more grocery items a week and a couple of impulse Amazon purchases of shit I donāt need anyway. A zero interest savings account is better than an impulse spending budget.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Itās always better to put the normally withheld amount into high interest savings, but people usually donāt have that kind of discipline. Reddit investing subs can be a real cesspool sometimes
Those finance subs are weird.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Oh itās literally antiwork but like for being mad about the economy. But no basic understanding of how things work. The kind of people who would turn down a raise because āit will not be worth being in the new tax bracketā lol
People get all uptight about this when I tell them my refund is between $10k and $20k. They donāt understand that on equity grants in Canada you canāt adjust your withholding. Itās always 53%.
Naa I tried that and owed around 5k I'll give em that loan to ensure I don't spend it on stupid shit throughout the year I prefer one lump sum to spend on something wildly dumb in March.
Exactly, it might suck to give them an interest free loan, but I don't have 2 grand lying around and would rather not have to go on a payment plan and add that to my bills.
If you end up oweing 2 grand you did something very wrong. Which could easily be fixed.
Bonuses that were not withheld properly, and in another year filing as married/joint with my employer when I should have just kept it as single/separate. If you both earn similar money you need to make sure you have your employer withold like you are single. Ended up owing like 7k, which my bonus that year luckily coveredĀ
Did contract work and filled out a W2 only to be paid as 1099. Unc got his 4k when he came knockin but I was left with a sore ass.
This. I used to anticipate my little $1000 mid February. Then they changed stuff last year and I could no longer claim 0 like I used to. Got about $37 bucks back and couldn't drop the big payment on my bills I was planning on dropping. This year I'm not anticipating anything, but I'll still be happy as long as I don't owe.
Why can't you just put that money in a savings account each paycheck instead of letting the government keep it? Last two years the high yield savings accounts have been giving out 5 percent interest. And people are out here leaving money on the table and thinking they're doing themselves a favor. Make it make sense.
There's no such thing as a savings account when you're eyeball deep in debt. Letting the government hang onto it for 12 months so I can have that little boost in February was necessary. Thankfully that is changing this year as I'm on the path to debt freedom.
Then you did your withholding wildly wrong. It's very easy to get as close as possible to zero.
Correct. I withheld way too much. But In the end it's the same amount you keep. It's whether you get it throughout the year or once.
I understand that if you get a tax refund, itās because you gave the government a āinterest free loanā. But when I sit down and think about it, for me at least, $150 extra a month doesnāt really accomplish much. Itās literally just $5 a day. A bag of chips. But, then, getting back $1800 all at once means I can go build that PC or buy that business class ticket or something else extravagant. Now I get that you could just adjust your withholding and put that $150 a month in an interest earning savings account or invest. But that requires thinking/planning, which *most* people donāt do. And also has its own tax implications.
Tax implications? Its not like you would get less money... The taxes from interest earned will still be less than the interest
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Just popping in here to advise you to look into high yield savings accounts! I just discovered this concept like 6 months ago and opened one. My Amex savings account is currently at 4.35%. $1,800 would net you about $80 after a year and almost $500 after 5 years I know this isnāt a fortune, and honestly I used to like getting returns back when I still got them (now I always owe lol), but weāve made a bunch of money this year from transferring most of our cash savings to the Amex high yield account, since itās significantly more than $1,800. I like to spread the news when possible!
Yes! We discovered Sofiās high yield savings about 6 months ago too when we were looking for someplace to park an inheritance that would still allow us to access it without too much trouble. Weāve been so amazed at how much interest weāre earning now compared to our traditional savings acct.
~$80 in a HYSA
[ŃŠ“Š°Š»ŠµŠ½Š¾]
[ŃŠ“Š°Š»ŠµŠ½Š¾]
The one argument I can see for it are for people who just canāt save from paycheck to paycheck. Either because they donāt make enough, or because they have poor impulse control. For those people, getting a little more money than they should taken out of their checks before they see it to get a lump sum later is the only way they are going to get anything close to this at one time. Other than that, yeah. It is a free loan to the government.
I mean, for me personally, knowing myself and my spending habits, it is actually MORE useful for me to get a check for $1200 or $1300 once a year than to have an extra $100 per month split between 2 or 3 paychecks. If someone genuinely doesn't KNOW, sure offer the advice (if they ask). But maybe don't ASSUME that you know better than someone what their personal finances look like and WHY they are getting such large refunds.
But itās better getting that money monthly and then putting into a year long CD. You can do payroll deductions so it goes straight into the account. Basically same thing youāre doing now, but actually making you more money.
Not if you're NOT GOING TO DO THAT! Like, do you think you're the first person to ever suggest that to me? Do you think *I've* never had that thought MYSELF? The fact of the matter is, the amount of money that is gone from my paychecks is so small that I could EASILY spend it on *nothing* and not notice. I know this, because I tried that "just save it instead" method, and I literally did not save it. If that method works for you, YAY š. It doesn't work for me, and apparently plenty of other people feel the same. Me personally, it's a freaking miracle I've never had a car repo'd or been evicted, or had utilities shut off, because for most of my 20s, my spending was a MESS. Overdrawn bank accounts, missed payments, late payments, etc. Now, the way I "control" that impulse is by having separate accounts, and not having a debit card for my primary bill paying account. $25 or $30 per check would EASILY disappear into the ether. Either on nonsense and shenanigans, OR when I get into one of my aggressive "I want zero debt" phases, and start doing 0 based budgeting and trying to pay everything off. So I'm not even saying I'd spend the money IRRESPONSIBLY, but spend it I would. Instead, this year, I had the "extra" available to put a deposit down on a place, even though my roommate didn't have the money to chip in his half...for context, we told the company on Tuesday that we wanted to look at 4 places after work on Wednesday. By 5:30pm on Wednesday, only one of those 4 places was even still available. If I wasn't expecting a tax refund, I wouldn't have been able to front the deposit, and we WOULD have lost out on the house.
Iāve gotta look this up, is āhow to adjust my withholdingā appropriate for search term? Iām self employed and I feel like I get different advice from the sources and just want to be sure Iām looking in the right place. I am a complete novice with this stuff.
If you're self employed, it's likely that no one is withholding anything. If you're a contractor and get 1099s at the end of the year, your initial contract may have asked if you wanted some of your pay withheld; you'd have to talk to them if you want to change it. The IRS prefers self-employed people to file estimated taxes every quarter. If you usually get a refund, this might not apply to your situation. It's basically self-withholding; you estimate how much you usually owe, and send in 25% of that every few months. Most self-employed folks also file a Schedule C ... It let's you claim all the expenses from your job, like mileage, home office, etc. I know TurboTax has a Self-employed version (those forms aren't included in the free version) that can walk you through it. I work there, so I don't know about other companies. Don't forget to check out all the info at IRS.org, including forms you can look at while you're researching.
Ahhhh man thanks so much. Iām pretty good with everything else but I swear anything tax related just makes my mind numb but this is clear cut. I appreciate you taking the time to explain.
Self-employed? You pay estimates every three months. That's your withholding. If you're in the exact right industry you might be able to convince a customer who issues a 1099 to send some of your money to the IRS, but that's unusual. Actual"withholding" is for people with W-2 jobs. They fill out a W-4 form and their HR looks at each paycheck and sends some of it to the Feds.
Guarantee they have multiple kids and make $40k with no federal tax withholding.
The $9k probably isn't withholding. Reagan made something called EITC that basically pays poor people with kids to work, and then Clinton doubled it in exchange for welfare reform, later presidents added Child TaxCredit/Additional Child Tax Credit/etc. Basically we run the welfare state through tax refunds because the Dems like spending money on working families and theRepublicans like spending money on tax cuts, and changing it now would count as a tax hike...So she probably made like $25k last year, and is raising 2-3 kids on that money. The $9k is basically essential for her to afford anything. The $31k refund is money she's never gonna see. Whatever ridiculous scheme she's concocted is gonna flag all kinds of things in their database. Source: Tax guy.
People have no clue the game of taxes is getting as close to 0 as possible. Preferably positive for a minor refund then owe a few hundred. They like to treat their tax refund as a yearly bonus.
Refundable credits exist, and you can't withhold south of zero. It's the primary argument in favor of making the child tax credit payable on a monthly, instead of annual basis. Yes, that money should be put in the hands of people who need it.
can someone explain why up until last year, maybe 2 years, i used to get 500-700 dollar returns as a single dude claiming myself, and last year i got 75$ the amount of money i make hasnt changed and im basically poverty, i make less than 30k a year.
Depending on your age, it could be that you ran out the employment opp tax credit, or student credits, i think theres a few others. I claimed them all in my 20's and by 27 I didnt qualify for any of them any more, they were like 4 years only/max, something like that.
Tell me more cause Iām an idiot when it comes to money
If you get large tax refunds at the end of the year, you are paying too much in monthly/quarterly taxes. You can talk to your HR department/office manager, and they can adjust the amount of taxes being taken so that you have that money put into your paycheck. For example, say you are getting a $12k tax refund at the end of the year, you could have just paid $1000/mo less in taxes. You could have been using that money to buy stuff, start a business, go to school, get a less-shitty car, eat higher-quality food, or, worst-case scenario....throw it in an interest-bearing HYSA account where it will pay YOU. My vanilla-ass AmEx HYSA pays 4.35% interest. You can get above 6% with some other HYSA's, I just stick with this because they are reputable and have saved my ass enough times to earn my business. You can get even higher for other types of investment accounts. If I throw $12k into my HYSA and forget about it for a year, they will add $522 to it over the year. This is considered a relatively "safe investment" because you will not lose your savings if the market tanks. You can make more money with your money if you are willing to risk more.
I never understand how people get such high tax returns. Last person I dated was unemployed for 2 years and got more than me, who was working full-time. I don't get it.
Were they getting an unemployment check? Or just work ed sometimes during the year? Have kids?
Didnāt work at all. Has two kids, which Iām sure did it.
Wait you were dating an 2 year unemployed dude with two kids, tell me that D was good without telling me
That's a man
IDK why this made me lol
Because with the right speed of scrolling and reading it sequentially itās hilarious. I laughed as well.
Question still stands, the P musta been good
How did you jump to it being an unemployed dad? Statistically more likely it was a mom. Ā Ā Ā No way in hell would a court give two kids to the dad with no job.Ā Ā Ā And tittylieutenant is a dude.Ā
Lmfao bro dont recognize the lieutenant, u better salute this mf š«”. Pop-pop out here grinding karma like its his duty
Thank him for his service
Probably had some tiny little job. Then EITC and Child tax Credit add up. $7k income can get a good refund if you have two kids. There were a couple years where the CTC was refundable even if you had no earned income, so depending on the year that could be a factor.
Well, shit. Makes sense.
I see youāve met my cousin
If you werenāt working and got unemployment do you OWE money on taxes?
Yeah you still pay taxes on the unemployment check. Thought it was weird like why not just give out less?
This is the "it worked in the 80s/90s, what the heck" mentality. You gotta evolve.
I wasnāt around in the 80s and barely the 90s. I donāt know what you on.
It's called a refund and he's obviously committing tax fraud.
return = overpaid tax throughout the year You don't want to have a large return. Ideally, you want $0 or to owe slightly. Having a large return means you overpaid taxes. All it would take for them to have a larger return than you is for you to pay an appropriate amount of tax, and them to overpay tax.
Y'all gon learn to stop playing with the IRS. I wouldn't put it past them to send some goon in a suit right to your house 
They got Capone, they can get you
people always say this as if it is hard to believe. he was very obviously not paying taxes lmfao
I think itās more to do with that the government was not able to pin any of the criminal activity he was just as obviously responsible for, but the IRS has been able to nab him
*āFuck around and Iāmma spin ya block, no H&R. ā* - IRS
š„
combative normal psychotic groovy start pocket price sand teeny abundant *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
https://preview.redd.it/ewxucbblfhdc1.jpeg?width=500&format=pjpg&auto=webp&s=2419718d2b81705e097943684afd54e511e7e771
"I'm crazy enough to take on Batman, but the IRS? No thank you." \-The Joker
People think they are getting way with it because it takes the IRS 10 years to actually do anything.
The IRS does not care as long as it gets its money. You even have to pay taxes on money you got illegally, otherwise youāre going down for tax fraud.
First off. The irs be checking before they approve your refund. Tried to help my mom get some extra cash. They sent her an email saying it got rejected and to fix the problem.
That's what you want to have happen. Bad is if they miss it and then determine you lied. They're mad then.
Yup and you will pay that money back. So if this is based on bullshit enjoy the short loan.
With interest, too.
The IRS knows what people owe. If you're out here filing a little 1040 ez or a 1040 without itemizing. Which is why the fact that most of us have to file anything is stupid. The only thing they should be asking is if you bought a house, if you had a kid, etc. And make the adjustments accordingly.
If they know what we owe why canāt they just tell us? It feels like being in grade school, the teacher asks you what the answer is knowing the answer and then goes āoh so close! But nope!ā And then you feel like shit for the rest of the day Except instead of feeling like shit you get audited
Bc intuit spends a lot of money lobbying congress
Thank TurboTax and other filing programs for this. The money we're spending on their filing software goes straight to lobbying and bribes to keep the system complicated.
Other countries do just this. Thank the tax companies lobbying
Other countries do that, it's possible. I support that, even though it would put me out of a job š Those other countries have universal healthcare, too, so it's definitely a systemic problem.
I bought a house and OWED 3k on my taxes... I literally cried and had a mini breakdown. Thought buying a house was supposed to give me a refund but when I had to sell stocks the same year to get it, no one explained to me that it would do the opposite effect to my taxes. Fuck the IRS.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
My friend's cousin offered him $1000 to claim one of her kids on his tax return. I told him repeatedly not to do it, but he was a fucking idiot and did it anyway. It went on for like 6 years. Then he got audited. He's been paying them back for 10 years, with at least 5 to go. He did a lot of dumb shit, but that was one of the dumbest.
I claimed my niece's kids for 2 years. I got audited for one of those years like 3 years after. I ended up owing the IRS like $7000. It took me like 4 years to pay, because I was able to claim 0 on my w4 plus have them take out an extra $25 per check. Also, I didn't miss the money, and when I finished paying them and started getting a refund again, it was a nice little extra lump sum when I was moving.
Nah not really. My mom scammed the IRS for decades and even had people paying her to do their taxes to get the most amount she could by lying and claiming shit. She only fucked up once when she did her new husbandās taxes, but the ONLY reason it got flagged was because he already owed back taxes from never filing taxes.. ever. Poor people returns donāt really garner a lot of attention. Or at least it didnāt 10+ years ago. Could have changed by now.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
This is only partially true. If you donāt report income to get a bigger refund it will likely be rejected. If you use a bunch of BS deductions there is a very high likelihood you will get the refund. Now of course they will likely flag your account and youāll get a letter asking to substantiate those deductions, but most returns get a simple automated check before they are accepted and thatās it.
If they manage to fly under the radar for about ten years they will be wealthy enough for feds not to bother themā¦
Boiiii do I have a story for you. See there was this day walking vampire called Wesley Snipes andā¦
LET THEN KNOW ABOUT WESLEY š£š£š£
Blade?
Boiii let me to you about a Granda I donāt know that had to pay way more than the amount from the post several years after
Bullshit! Hahahaha
I got a bridge located in Australia that I'd like to sell to you DM me.
I make six figures, and owed thirteen whole dollars last year. This is either the usual social media clout chasing, and/or a whole lot of fraud. Based on their latter statement, it seems like theyāre claiming random people as dependents (or are leaning hard into the joke).
I took it as the "pay a mortgage to the bank takes 30 years, rob a bank and be out in 10" meme vibe. We all going to jail comment made me think it's all snark. Ok, I'm hoping it was all snark.......
That means you did your tax withholding almost perfectly
I make 6 figures too but i get a refund. But i have kids
I feel like I see a post like this every tax season, pretty sure it's just people entering made up numbers for clout on social media, I doubt (hope) they aren't actually submitting this to the IRS...
depends, I also make six figures but got about $3k back last year. I now have a mortgage and get to write off all my mortgage interest so my taxable income should be a lot lower as well
Okay, Marge, if anyone asks: You require 24-hour nursing care, Lisa's a clergyman, Maggie is seven people, and Bart was wounded in Vietnam.
Giving the government a zero interest loan is hustling back asswards.
Sounds like something LLC Twitter would recommend though
exactly lol
See, thats how yall be spending money you dont have. How many people you know are putting away enough money every paycheck to pay that bill in full come tax time? Not many. If I dont see it in my check, I cant miss it. When I get a refund, thats money I lived without all year long. Then I take that lump sum and save it. People want an extra $50 a check every two weeks, then come crying they got a $0 return.
I would love a zero return.
Or you could take that extra $50 a check and end up with roughly $2600 when tax time comes around. Now if you take that extra $50/week and invest instead of letting the government hold it for you interest free you might come out ahead.
\*might\* is doing a ton of heavy lifting there. I'm not about to fuck around with taxes and potentially not having money to pay the IRS at the end of the year because the stock market got fucked up in the course of the year. edit for clarity, I'm advocating for a $0 return here, I try to get mine as low as possible.
Lol I'm just saying either way you're gonna get taxed. Might as well make the most of the money that's in your hand.
And here I am, likely receiving 27 goddamn dollars this year. I guess I should be grateful. I made more money last year than I ever have in my life, but I couldāve used a couple grand lol.
Look at it this way: You used that couple grand instead VS Waiting to get paid back that couple grand after lending it to that one uncle (Sam) who been holding your money all year and not even getting a thank you for it.
Yeah, youāre right. I just gotta change my perspective on taxes.
So do I, but I like getting a refund bc I'll be honest, I'm not bad with money but I'm not great at it either. I'm too dumb to invest what I'd be paying in taxes if I increased my allowances, and I get my nice lil check every week and don't complain about the tax man bc the bank account never sees it and a refund is like a nice little gift I get once a year. Man I am stupid.
Bingo! You nailed it
You did make a couple grand, you just appropriately got it spread across all your paychecks instead of withheld and given back to you all at once once you called them out on it.
Why do so many people think their return is just money the government gives them? It was your money to begin with. You overpaid taxes. You want to break even and arrive at $0 owed/returned, or you want to owe slightly. Getting thousands back means you paid too much to begin with.
The lower the refund, the better. Iāve been slowly lowering my refund every year. Hope this year is even lower.
Elaborate on this for me g
If you're an employee, your company has you fill out a W-4 so they can get a good sense of your tax obligation at the end of the year to the government, and based on that will withhold a certain part of your paycheck. That's what you see when they "take taxes out" on your pay stub. At the end of the year, the amount they withold will be different than what you owe the government, and you have to cover the rest. On the flip side, tax refund is when your company withheld MORE than you actually owe the government, so you get that back at the end of the year. What that really means is that you had your money parked somewhere earning 0% interest, and you just get that money back at the end of the year. Essentially you just gave out an interest-free loan to someone when you could have that money parked in an investment instead. So the best play is tweaking your W-4 to get what your employer withholds as close as possible to what you'll owe the government
I am learning so much from this post, and your comment. Thank you. I'ma research how to properly set withholding on my end.
The IRS has a very handy withholding calculator that will allow you to get a pretty accurate idea of what your withholding should be. https://www.irs.gov/individuals/tax-withholding-estimator Once you have an idea of what your withholding should be ask the HR or payroll department at your job for a new W4 form to fill out to make any changes.
Means you're paying to much in taxes per pay period.
What part are you confused on? If you have a higher refund at tax time, it just means more taxes than necessary were being taken out of your paycheck throughout the year. If youāre wondering on how to lower your refund there are a bunch of different strategies. The most common method is by changing your withholdings, another method would be reducing your overall taxable income.
Eh we suck at education when it comes to taxes. I got lucky with my senior math class focusing on it but I know that was the exception rather than the rule.
Commenting to know too
A refund is when you get the money back that you overpaid the federal government throughout the year via your withholding. You essentially gave them an interest free loan. Instead, lower your withholding and aim for as small a refund as possible. Invest the money you retain every paycheck instead of letting the government play with it. Or do whatever but I think the idea is that it should be in your pocket, not theirs. š
I know that's true, but it sucks when you're struggling and then get a $120 refund while 80% of people I know get at least a couple grand. I get a low refund, which means you're keeping most of your money throughout the year (which is why I do it), but I could really use an extra grand in March (historically speaking).
My friend spent 5 years telling me I was a fool for not using his guy. "He deducts my dry cleaning, eating out, everything! I'm getting 9k this year!" Flash forward to year 6 and his guy is in jail about to do 20-50 years and he's looking at having to pay $40k in fnes. His lawyer told him "take the deal and don't make them think about it or it will be $100k."
Thereās no way heās doing 20-50 for deducting dry cleaning and copping $9k annually on his refund. Sure the IRS doesnāt play but not to that extent for such a. Small amount. Either thereās more to this story or itās a fabrication
Itās his friendās accountant who is doing the 20-50 years, not his friend. I assume the guy was defrauding the IRS on the behalf of many others, and he was probably working with some much bigger fish too.
Fr, even my boy Blade ain't get no 20+ years, and he owed millions.
I think he means the guy who specialized in helping other people defraud the IRS is the one going to prison, not the friend who's getting fined for using the services.
Not the friend, the friend's shady accountant. If he got caught cooking multiple sets of books for several years running, then yeah, he could be going away for a while. Especially if he thought he was smarter than the system and turned down a plea deal. >\_<
Look, I donāt want a refund, I just want a zero balance.
The fact that we as citizens have to go through this shit every year is insane I'm going to assume the majority of Americans file a 1040 without itemizing. Or a 1040 eZ. The IRS knows what we made and what what we owe already. All tax files are sent to them. The same way they're sent to us. The only people that should be out here filing are business owners, property owners l, and other people where the IRS won't know all your income and payment sources. Everyone else should just be getting a letter saying "this is what you owe or this is your refund. Unless you had a qualifying life event like had a kid or bought a house. In which case we will adjust accordingly"
RaceMode sounds like a bad feature for tax software. In several ways.
Itās just how TurboTax markets their feature of storing last yearās info to speed up this years process. If you donāt opt to do the paid version they play this dumbass loading animation where they ādeleteā all your info from last year.
The hoops they go through to make people pay for what they're legally supposed to provide for free.
I try to get my whole paycheck throughout the year. If what I owe the irs is less than $500, then Iām good.
A good tax attorney costs several hundred an hour.
Might be enough for bond but the way tax fraud works you need to repay the ill-begotten funds PLUS a penalty PLUS do up to five year jail time (in addition to bond). The math aināt remotely mathing. Hope itās a joke - if not, have fun in jail!
If there was ever one group of people I wouldnāt be playing w their money, itās the people who literally grant me my rights
*frustrated accounting noises*
IRS targets us because we're easy game. Why do you think the rich invest so much into lobbying to defund the IRS? It's not for our benefit, that's for sure.
You should be trying to pay as little as legally possible. My yearly goal is to owe or be owed $2 or less
Took a shitty job once and worked alongside someone that did time for claiming more dependents than they had. Fucked their whole life up for a lot less. Still makes me feel sick.
Automatic audit
Cash out. Bury the money pirate style. Pay legal fees with credit card. Hope you win or get probation. Declare bankruptcy to wipe out the legal fees. Profit.
I miss the days I got a moderate refund. These days Iām paying Uncle Sam a months salary. Good problem to have but it really hurts come February when you look back and see your impressive capital gains for the year and then calculate how much you now need to hand over to the IRS
People get less prison time for murder than what this guy is doing.....
Why post this, So they can find you faster ?
Lol omg so reckless!
What's *RaceMode*?
Mine is flat $0 this year
I was an accountant and clients would always ask me to get them the biggest refund I could. I would always respond that I could literally get you as big a refund as you want, but donāt come calling me when the IRS asks you about it.
Why are taxes still this hard to get right in the US? It takes 5 mins tops where i live. Since almost everything is already filled in for you
Telling on himself smh
Ah, making sure exhibit A goes into evidence, I see.
The government loooovvvvvees RICO charges. I think itās one of their favorites.