Tax REFUND, not tax RETURN

[nanamom]

Re: Tax REFUND, not tax RETURN

I am hoping to just get enough back to pay off what we owe the IRS from 2004. We didn't realize we had a problem until a couple months ago. Any "extra" will go to the medical bills from Jan 2006. We had to have them start taking out more starting this month so our monthly take home is less.

[PRICEPLUS]

Re: Tax REFUND, not tax RETURN

Agreed, but it is best to get a small refund. Many people seem to revel in getting the largest refund, as if they've won a prize.

I agree with you 100% Poundwise.

[boefixepa]

Re: Tax REFUND, not tax RETURN

What I don't understand is the state of mind. I've had this conversation with the people at work time and time again and I still just shake my head. They want that return and they know they are giving the government a tax free loan, but they don't care. It's like a savings account to them, they know they'd never have the self control to save the money themselves....???? Come on people!

[disneysteve]

Re: Tax REFUND, not tax RETURN

They want that return and they know they are giving the government a tax free loan

Please read the original post .

I agree completely. Millions of people think a tax refund is the greatest thing, like the government is giving them free money. And what do they do when they get it? They spend it all, usually on frivolous stuff or creature comforts. If they are so bad at saving money, maybe they should take their annual refund and invest it somewhere, like in a Roth account. Then they couldn't get to it.

[boefixepa]

Re: Tax REFUND, not tax RETURN

LOL - you caught it! and fast! I did it on purpose just to see who was paying attention!

[disneysteve]

Re: Tax REFUND, not tax RETURN

LOL - you caught it! and fast! I did it on purpose just to see who was paying attention!

Yeh, sure you did.

[froggie]

Re: Tax REFUND, not tax RETURN

uggghhh... can I just say that I hate tax time?! My hats go off to the CPAs that deal with this stuff all of the time. Luckily, the guy that does our taxes is a friend and he is very patient with me when I bring in manila folders stuffed with "junk"! He does all of the sorting of the receipts and all that good stuff.

[cicy33]

Re: Tax REFUND, not tax RETURN

Actually there are several things you should think about. I am one of those that gets a pretty good refund back by the way. It is a refund cuz you paid it to them and they are "refunding" it to you. that is why it is called a refund. The child part not sure what you would call that part. But, lets address the main points first, what is the point in putting the money in digustingly low interest savings account that I have to pay taxes on the interest I do make? As long as you dont' pay for them to give you back your money you are not really losing much. Maybe $100? depending on your return, of course, do not include the money one gets for the kids cuz that is not what you have actually saved. Though if you raise your deductions or take the eic extra all year you could conceivably make more interest that you now have to pay taxes on. It is not like you put the whole amount in your checking account on day one, it has to accumulate. And that is the problem with most people, including myself, it is so hard to save all that extra money knowing that it is there. Sometimes it works better for folks if they don't see it until it arrives. I don't understand why people get so upset about this? If mary jo wants to keep hers until february and john boy wants to get a little extra and spend it all year and tommy boy wants to get a little extra and save it and pay taxes on it, what real difference is it? Everyone just does it differently. I agree that it is terrible cost to get it early but if they choose to do that oh well! Perhaps it is worth it to them. And as said before I would prefer to overpay than underpay!

[kv968]

Re: Tax REFUND, not tax RETURN

Please read the original post .

I agree completely. Millions of people think a tax refund is the greatest thing, like the government is giving them free money. And what do they do when they get it? They spend it all, usually on frivolous stuff or creature comforts. If they are so bad at saving money, maybe they should take their annual refund and invest it somewhere, like in a Roth account. Then they couldn't get to it.

They should take that money and invest it in a Roth IRA. However herein lies the rub, if they're REALLY bad at saving money they might also realize that you CAN get to it in a Roth (penalty- and tax- free) and take it out from there also.

[creditcardfree]

Re: Tax REFUND, not tax RETURN

I wonder what percentage of taxpayers underpay than overpay. How many of those do it on purpose or just have a major tax change? Anyone know?

[cicy33]

Re: Tax REFUND, not tax RETURN

They should take that money and invest it in a Roth IRA. However herein lies the rub, if they're REALLY bad at saving money they might also realize that you CAN get to it in a Roth (penalty- and tax- free) and take it out from there also.

I would love to do something like this but doesn't it cost like alot to get one going? Does anyone know the start up? for us normal people, several thousand is a ton of money to us.

[kv968]

Re: Tax REFUND, not tax RETURN

I would love to do something like this but doesn't it cost like alot to get one going? Does anyone know the start up? for us normal people, several thousand is a ton of money to us.

Cheapest I've found is the one I'm in...T Rowe Price. You can start an IRA for $50/month and they have very good funds to choose from. Vanguard and Fidelity are also good , but the minimums are more. Fidelity is $200/month and Vanguard's lowest minimum is STAR fund at $1000.

[tabbycat31]

Re: Tax REFUND, not tax RETURN

They should take that money and invest it in a Roth IRA. However herein lies the rub, if they're REALLY bad at saving money they might also realize that you CAN get to it in a Roth (penalty- and tax- free) and take it out from there also.

That is what I am going to do this year. This year I'm expecting to get $1700 (due to a credit) and that will go to a Roth for me.

[cicy33]

Re: Tax REFUND, not tax RETURN

This year ours is paying taxes on the house which keep going up and up and up.... back to the roth is this something you have to do every month? Or can you just fund it once? I have no knowledge about these things.

[kv968]

Re: Tax REFUND, not tax RETURN

This year ours is paying taxes on the house which keep going up and up and up.... back to the roth is this something you have to do every month? Or can you just fund it once? I have no knowledge about these things.

You have to fund it every month; at least until the minimum is met. Which is $1000/fund with T. Rowe Price and $2500 for most of Fidelity's. And I think I may have been wrong with the per month minimum with Fidelity. I think you can invest with them for only $100/month in a Roth IRA. Maybe someone who does it can confirm that. There are also fees associated with low balances but it's better to start saving whatever you can than not doing it at all. You'll overcome the low balances eventually.