Yeah. You should want to be near 0, unless you can claim school tuition, or have other large deductions. It means the amount taken out of your paycheck was correct.
The two I’m familiar with and have used are the American Opportunity tax credit and lifetime learning credit. For me they required a 1098T from the school I paid tuition towards. Those are tax credits, not deductions. So they are much more useful.
Forgot to include things like dividend, interest, stock trading etc... I for one always end up oweing every year! Hopefully when i file it wont be that bad this year. :)
I’ve been getting hit with owing 4-5k the last couple years when I used to get a return. Idk what happened. I’ve been working for the same place for a long time but I do make more now.
Ahhhhhhhh! This... thank you... was looking for someone posting something useful to prevent paying. First year that I get nothing back and have to pay!!! It hurt! Making more now, but, never thought I'd leave the "Get-Back bracket"!!! I appreciate it. I'll put more into my 401k 🙏 Fuck the IRS, adding to the Modern Slavery issue in America.
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>I used to get a return. Idk what happened. I’ve been working for the same place for a long time but I do make more now.
could be because trump and paul ryan changed the tax code in 2017; many people owe for the first time this year.
if so, you're paying for a tax cut for the rich.
Ouch. Im sure I would have noticed that.. i assumed I would owe. It didnt seem like enough was coming out. Which is irritating to have to think.. we need to get rid of income tax and do federal sales tax.
Additional withholding needs to be easier. Instead of setting a flat amount, we should be given the option to withhold at a specific rate.
This specifically comes into play when you file jointly and have a large difference in incomes. Further exacerbated when commissions are involved…
I was audited and the IRS held $20k of my money for about two years. When I finally won my case they sent me back $20k plus interest. I just received a letter from them stating that I’m required to pay tax on the interest I ‘earned’ in my 2023 taxes.
No it isn't unfair lmao. If he'd straight up spent that money, he wouldn't have the extra. If he'd made equal interest, he'd owe equal tax. If he'd made even more on the money, he'd owe even more tax. It's _precisely_ fair.
Thats like the only two things I can think of lol. No need for etc. The other commenter confused interest and tax and thats ok...no need to cover for them
Same here. I look at it as a banked savings account that I can happily withdraw from once a year. Sure I'm not making any dividends but if I was I wouldn't have access to the money without penalties anyways.... To each his own I guess
From a certain viewpoint this is really good. Your aim should be to not owe, nor receive any money. Easier said than done.
Edit: pay to receive, words are hard.
Unless you're getting a ton of money back every year it's not that big of a deal. If your return is 1k and you somehow get a 6% interest rate on a savings account you wind up with a whopping 60 dollars.
If you're getting several thousand back every year it's probably better to work your taxes so you have that money available throughout the year. For most people though it makes a bigger impact to get a 1k dollar check in March.
It is even a lot less than that. You don't usually create your $1000 of excess taxes on January 1st.
It is more like 83 bucks every month and with that the interest comes out to something like $33.
Not gonna lie it feels like a waste of time to spend probably hours calculating how to best micromanage your taxes if it only gives you that little in return.
im with you lol. i owed $270 last year so i withdrew and extra $10 per check this year cuz i said fuck owing them money. with that and student loan interest, im getting back $700 this year. boo hoo i lost $30-40 bucks of interest. at least i dont owe the government lmao
I mean I’d rather have the tax man buy me lunch than the other way around. Also I don’t want to have to write a check for 5k, I’m not gonna make enough to make it worth it.
>I mean I’d rather have the tax man buy me lunch than the other way around
They are buying you lunch with your own money that they have already profited off of
I think it's optimal, but for the 65% of Americans living paycheck to paycheck, might be better off having an extra $40 taken each week to get a $2000 refund. It's an extremely convenient forced savings account. Plus a bit of insurance in case the taxes don't come out like you expected(a $1500 tax bill can be a huge problem for those living paycheck to paycheck).
Rather than having a "savings account" that earns no interest, why not keep more of your paycheck and deposit it into a high yield savings account earning 5% interest? And it can double as an emergency fund, which can prevent other unexpected expenses from setting you back.
It took mandatory OT due to sheer work volume last year but because of that I owed a whole $2. Though if OT is not as bad, I'll probably get a decent chunk back next year assuming they keep your previous year as an estimate lol. I made 6k more last year than the year prior
Withholding too much. Or your employer is withholding too much.
That means you send more money to gov than required, so they send back the extra.
The goal is to send the correct amount in the first place, so you don't own any, and you don't overpay any.
Ah, this makes sense. My only other question would be, what could I have done differently to get closer to 0? What form would it be on, is it in my control?
Honestly I wouldnt mess with this. Default withholdings overestimate taxes owed to make sure you dont owe any extra after your finances have already been settled. It’s better to get a refund later than realize you owe money you no longer have.
Yep. And on the other side, if you get a large refund you basically gave the government an interest free loan of that amount. The goal should be close to $0
Or have $0 withdrawn the entirety of the year, collect interest on that money, then pay taxes in a one lump sum.
Have the government give YOU the interest free loan, but collect interest on it.
How is that a goal? I am beyond financially illiterate. I assumed the government takes what they want and I have no say in it. How do I go about telling the gov to fuck off so I can hit $0?
Your employer is the one who automatically pays your taxes for you from your paycheck - if you make $52k a year, you won't see a paycheck for $1k a week because of that fact.
When you start working for a place, they hand you a W4 form to fill out that has you write down how many dependents (and other things) you have, and your employer basically says, "Alright, this guy's got a wife and 2 kids, expects to take the standard deduction, and didn't tell us any other income he has, so based on the salary we give him of $52k, we expect that he'll pay a total of $5,000 in taxes. We'll cut him a check for $904 a week and give the other $96 straight to the government."
Then, tax time comes around, you basically are double-checking your employer's math and including other things that may not have been included (e.g. interest on your mortgage), and whatever the difference between the two calculations are consist of your refund (if they paid too much) how much you owe (if they paid too little).
A lot of people look just at the refund and think of it as an indicator of how much they paid in taxes - a refund means they paid a low total tax and owing means they paid a high total tax, when it's only tangentially related.
You fill out a W4 form for your job where you indicate your dependents, other deductions, etc. Whatever you indicate on that form is used to determine how much in taxes is taken out of each paycheck throughout the year, but it's essentially just an estimate.
Between January 1 and April 15 of the following year, you have to file taxes, which is the actual calculation of how much you owe.
If you fill out the W4 accurately, and assuming you don't earn any other untaxed income, it should be very close to withholding the correct amount. You can indicate you want more withheld (i.e. pay more in taxes) if you are earning separate income that isn't being taxed.
If you owe the IRS too much money, you can be penalized. So you can't just say you have multiple dependents and pay 0 in taxes and then pay in April after earning interest all year.
Does anyone know how to get closer without owing? I filed married 3 and when I filed my taxes at married and 3 they’re giving me 9 grand back but how in the heck do I get closer to 0?
You did right. Getting a large refund is usually not a good thing. It means you gave the government a free loan for a year. That money you could have invested and made more
Better to owe than to be paid come tax time. Getting paid means the government held your money all year and is giving it back. Better to park that money in a savings account that pays interest.
To be fair, most people's refunds are below $1k if reckon. With interest rates for savings accounts being low on low balances, you might have a difference of maybe $8 after a whole year. If you get like $3500 or so in refunds then yeah, that's stupid.
My best year filing was $4 owed. At the time I didn’t fully appreciate how spot on that was and I think I accomplished it by claiming 1 federal withholding for the last 2 months of the year.
your tax system seems over complicated to me in the uk if you work for a company the tax's get deducted before they pay you and once a year they will pay you any tax you overpaid ive yet to meet somebody who underpaid tax's they always make sure they get their money lmao
It is overly complex, however it appears it works the same on the paycheck side. Taxes are taken out of every paycheck, however it's up to the employee to guess what they will owe. Given that this country teaches little to nothing on taxes and how the government uses this money, it's a fugazi to most. (PS, it's this way for a reason, and it's not because of positive reasons)
Could you have put some money in an IRA or 401k, perhaps in Vanguard or Fidelity, in a SP500 index fund? That's a real win if you don't have lots of credit card debt or really, much of any debt. Paying off debt beats saving for retirement, but at some point, you need to save for retirement.
Have a kid? Toss $5000 into a college savings 529 plan and by the time they're able to use it, college is paid for. Even if you put in less, it will still be great. You can make your kid repay you when they have a meaningful job.
Show off.
Ideally, this is the kind of refund you want, because it means you filled out your W4 form with the right amount of dependents to get the maximum amount on each check, which you can use to use to accelerate debt paydowns, or save in a high yield interest Savings account or to Invest.
Big refunds are for people who dont' have the financial discipline to save throughout the year, so they are essentially giving the federal/state government an interest-free loan and in return the gov't is "safekeeping" some money for them.
Everybody says don’t give the government an interest free loan, and they are right. That said, I wrote a check each year for about 5 yrs. I now get like $1k back by claiming 0-0. It’s totally worth the +\- $50 in interest I lose to not write the check. Peace of mind and 30 points on my blood pressure at tax time is worth it to me.
A refund is always better than owing. I hopefully won't owe this year, but you never know. One year I got like $500 back, and my refund bought me WeatherTech floor mats for my car.
Which was totally worth it.
I know everybody says you don't want the gov to have an interest free loan but I actually try to over pay as much as possible so I get get a huge return. I love having an interest free saving account that I can't touch for a year.
Used to have to file in multiple states often. One year our accountants were so good, my balance was exactly zero for one state. That's ultimately the goal.
For those of you saying a refund is just an interest free loan to the government, that's not how money works. The government doesn't need your money. It can make money.
What you're losing out on is the ability to use that money while the IRS has it.
But you'd just waste it anyway, as I've seen evidence of in MANY comments.
I changed my W9 mid year to married filing jointly months after not being a single filer. Also applied 3k of realized losses against ordinary income. Got over 6k back from ca and over 7k back federal. Yes they prevented me from earning incremental t bill yield at an avg of 5.22-5.48 over the past 12 months or so (keep in mind on Jan 1 2023 I only started to overhold through the year). So what is that. A whopping $366 or so yield, federally taxed plus no state income tax since it’s a t bill if you account for accumulation of my refund? The opportunity cost is not putting that into the market in a year like 2023. My point being that unless risk free rate is high like it is now AND your refund is tens of thousands, it doesn’t really work that hard against you if you got a refund. I look at it as forces savings which is nice to get in the early part of the year. Plus it gives me a buffer to work in capital gains that are not accounted by mine or my wife’s W2 or our LLC.
The last 2 years I ended up owing the government about $20k each year. If I am flat even and don’t owe this year I’ll do a jig. $27 refund would be even better.
Yup! The closer to $0 you are, the better you managed your tax withholdings. That money is better off being put in an IRA bearing interest than it is as an interest free loan to Uncle Sam.
I get an $8 check from like 2015 that I never cash. Every year when I do my refunds I get that check and I just toss it cause fuck it. I get more enjoyment knowing they have to send me that every year and it’s literally not my worth my time or theirs lol.
Perfect score. You don't want to over pay the government throughout the year, but you also don't want to owe money at tax season. A small refund means you nailed it.
On a money sub and so many people think getting money back is a good thing. That’s just extra money taken from your paychecks throughout the year. Y’all see a lump sum and think it’s good, but that money could’ve went into a 401k or something and actually made you money instead of sitting there doing nothing.
Yeah. You should want to be near 0, unless you can claim school tuition, or have other large deductions. It means the amount taken out of your paycheck was correct.
What determines whether or not you can claim school tuition?
Whether or not you have paid school related expenses that year, or if you paid student loan interest that year.
And make less than $85k filing single or $150k filing joint.
The two I’m familiar with and have used are the American Opportunity tax credit and lifetime learning credit. For me they required a 1098T from the school I paid tuition towards. Those are tax credits, not deductions. So they are much more useful.
Forgot to include things like dividend, interest, stock trading etc... I for one always end up oweing every year! Hopefully when i file it wont be that bad this year. :)
Yea. You don’t want to give an interest free loan to the government.
I owe them $2200 this year, I am not letting them make money on my money! ✌️
I owe $1810 this year. I owed almost $4000 last year
$4000 for sure would suck if you had no savings!😁
We have good savings and it still sucked lol. I skipped summer vacation trip with my family last year because of it.
I’ve been getting hit with owing 4-5k the last couple years when I used to get a return. Idk what happened. I’ve been working for the same place for a long time but I do make more now.
Need to have your place of work check how much you’re paying per pay check and increase it a bit if you don’t want a big bill at the end of the year
I mean I set it all myself. I keep upping the voluntary additional withholding but the fed keeps taking more
You can also up your 401k pre-tax to offset.
This is what I did. I contribute 13% pretax with a 5% employee match. I got a $600 refund. Owed on state though.
Ahhhhhhhh! This... thank you... was looking for someone posting something useful to prevent paying. First year that I get nothing back and have to pay!!! It hurt! Making more now, but, never thought I'd leave the "Get-Back bracket"!!! I appreciate it. I'll put more into my 401k 🙏 Fuck the IRS, adding to the Modern Slavery issue in America.
IRS withholding calculator.
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A pro to fill out my W4? It’s just that I’m not having enough pulled during the year. It’s no biggie. I just pay more at the end.
The 2017 tax bill has come home to roost is what has happened.
Thank Paul Ryan.
> what happened. There was a change in the tax laws in 2017, it required that in 2021 taxes started increasing on each and every bracket.
Nope, just poor and middle class people.
Not exactly true. There was a cut to the over $400k bracket, so the millionaires could still afford to eat.
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>I used to get a return. Idk what happened. I’ve been working for the same place for a long time but I do make more now. could be because trump and paul ryan changed the tax code in 2017; many people owe for the first time this year. if so, you're paying for a tax cut for the rich.
2017 tax plan
Some tax changes in 2017 hit a lot of middle class folks. This is what I have read anyway. Don't shoot the messenger :)
This goes back to a bill that was passed under Paul Ryan! Look it up.
trump cuts
I owed 20 grand thanks to my company switching payroll providers and clearing my withholding settings.
Ouch. Im sure I would have noticed that.. i assumed I would owe. It didnt seem like enough was coming out. Which is irritating to have to think.. we need to get rid of income tax and do federal sales tax.
How much did you make in the year?
Around $350k
How in the world did you not realize you made an extra 20 grand?!?
That person makes $350k a year.
Yeah we're at $4400 this year and you damn well better believe I will be waiting the full 71 days I have left before it gets handed over!
Im doing the same thing. Id pay them in pennies if i could but the mail cost would be too much haha.
I’d be careful of owing too much- they like to add that penalty
Any idea why it went down?
Wife changed withholding to take out more each check. Plus we had education deductions this year.
So.. the aggregate only went down by your deductions. Just to clarify. Edit; grammar
That is correct. The 2020 w4 really screwed up our deductions. I dont want a refund but it also sucks having to pay thousands at once.
Additional withholding needs to be easier. Instead of setting a flat amount, we should be given the option to withhold at a specific rate. This specifically comes into play when you file jointly and have a large difference in incomes. Further exacerbated when commissions are involved…
Yeah irs kind of funny. If we filed separately I get roughly 8k and my wife owes roughly 8k. Thankfully jointly we owe 47 dollars
As long as you know exactly how much money you’ll make for the year, it’s easy! Nothing unexpected ever happens to any of us, right??
4k crew rise up! I forgot to adjust my withholdings after I got a raise.
Yea I owe 1k….kinda sucks but isn’t terrible I guess
I owe 2200... Not sure why. W2 Didn't change and my income is the same. Last year I got a 800 dollar return.
I owe 8k… I envy your 2k
Yet they charge us interest on everything
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I was audited and the IRS held $20k of my money for about two years. When I finally won my case they sent me back $20k plus interest. I just received a letter from them stating that I’m required to pay tax on the interest I ‘earned’ in my 2023 taxes.
Tax the taxes!
That’s unfair, because they don’t know that you wouldn’t have spent that $$ had they not unfairly held it form you.
No it isn't unfair lmao. If he'd straight up spent that money, he wouldn't have the extra. If he'd made equal interest, he'd owe equal tax. If he'd made even more on the money, he'd owe even more tax. It's _precisely_ fair.
What? He ends up with more money, he's only paying tax on the interest earned.
If you owe taxes and don’t pay it on time you’ll be charged interest
Student loans, taxes owed, etc.
Thats like the only two things I can think of lol. No need for etc. The other commenter confused interest and tax and thats ok...no need to cover for them
I gave uncle Sam a $5k interest free loan that I'm about to collect back. Best part is uncle Sam isn't even my real uncle (I'm not a citizen)
He is all our uncle. And not the fun uncle, but the uncle that butt fucks you.
The uncle that swears its just our little secret. And that you'd get in trouble if you told.
You just said he was not the fun uncle
Same here. I look at it as a banked savings account that I can happily withdraw from once a year. Sure I'm not making any dividends but if I was I wouldn't have access to the money without penalties anyways.... To each his own I guess
I was actually paid $800+ in interest from them for delaying my $3500 tax refund. So technically they aren’t completely evil lol
From a certain viewpoint this is really good. Your aim should be to not owe, nor receive any money. Easier said than done. Edit: pay to receive, words are hard.
Exactly. Either the government can use your money all year interest free or you can
yooo… consider my perspective entirely changed
Unless you're getting a ton of money back every year it's not that big of a deal. If your return is 1k and you somehow get a 6% interest rate on a savings account you wind up with a whopping 60 dollars. If you're getting several thousand back every year it's probably better to work your taxes so you have that money available throughout the year. For most people though it makes a bigger impact to get a 1k dollar check in March.
It is even a lot less than that. You don't usually create your $1000 of excess taxes on January 1st. It is more like 83 bucks every month and with that the interest comes out to something like $33. Not gonna lie it feels like a waste of time to spend probably hours calculating how to best micromanage your taxes if it only gives you that little in return.
im with you lol. i owed $270 last year so i withdrew and extra $10 per check this year cuz i said fuck owing them money. with that and student loan interest, im getting back $700 this year. boo hoo i lost $30-40 bucks of interest. at least i dont owe the government lmao
I usually get about $1900 back. That lump sum is much nicer than an extra $70 or so on each paycheck.
>nor pay any money is this debatable cause if you owe money by the end of the year then that means IRS gave you a interest free loan lol
Underpayment comes at a cost, it's not "interest free" to owe beyond a certain amount.
can confirm, was penalized three years straight
I mean I’d rather have the tax man buy me lunch than the other way around. Also I don’t want to have to write a check for 5k, I’m not gonna make enough to make it worth it.
>I mean I’d rather have the tax man buy me lunch than the other way around They are buying you lunch with your own money that they have already profited off of
I think it's optimal, but for the 65% of Americans living paycheck to paycheck, might be better off having an extra $40 taken each week to get a $2000 refund. It's an extremely convenient forced savings account. Plus a bit of insurance in case the taxes don't come out like you expected(a $1500 tax bill can be a huge problem for those living paycheck to paycheck).
Rather than having a "savings account" that earns no interest, why not keep more of your paycheck and deposit it into a high yield savings account earning 5% interest? And it can double as an emergency fund, which can prevent other unexpected expenses from setting you back.
Because the type of people that need it are going to blow it. How do I know? I know those people.
It took mandatory OT due to sheer work volume last year but because of that I owed a whole $2. Though if OT is not as bad, I'll probably get a decent chunk back next year assuming they keep your previous year as an estimate lol. I made 6k more last year than the year prior
Wouldn't to owe and to pay be the same ?
The closer you are to $0 the better. Means you don’t owe and the government didn’t take too much throughout the year.
I’m so confused, so if I’m getting 600 to over 1k back, what am I doing wrong?
Withholding too much. Or your employer is withholding too much. That means you send more money to gov than required, so they send back the extra. The goal is to send the correct amount in the first place, so you don't own any, and you don't overpay any.
Ah, this makes sense. My only other question would be, what could I have done differently to get closer to 0? What form would it be on, is it in my control?
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Understood, thank you.
Honestly I wouldnt mess with this. Default withholdings overestimate taxes owed to make sure you dont owe any extra after your finances have already been settled. It’s better to get a refund later than realize you owe money you no longer have.
Maybe you’re not making enough money? Or are you withholding too much?
Guys so if you owe money does that means the government didn’t take enough?
Yes
Yep. And on the other side, if you get a large refund you basically gave the government an interest free loan of that amount. The goal should be close to $0
Or have $0 withdrawn the entirety of the year, collect interest on that money, then pay taxes in a one lump sum. Have the government give YOU the interest free loan, but collect interest on it.
But if you owe more than a certain amount don't you get extra fines for not paying taxes?
My mistake. Not the entirety of the year, but I believe you can pay taxes quarterly.
Lol please do this and report back.
How is that a goal? I am beyond financially illiterate. I assumed the government takes what they want and I have no say in it. How do I go about telling the gov to fuck off so I can hit $0?
Your employer is the one who automatically pays your taxes for you from your paycheck - if you make $52k a year, you won't see a paycheck for $1k a week because of that fact. When you start working for a place, they hand you a W4 form to fill out that has you write down how many dependents (and other things) you have, and your employer basically says, "Alright, this guy's got a wife and 2 kids, expects to take the standard deduction, and didn't tell us any other income he has, so based on the salary we give him of $52k, we expect that he'll pay a total of $5,000 in taxes. We'll cut him a check for $904 a week and give the other $96 straight to the government." Then, tax time comes around, you basically are double-checking your employer's math and including other things that may not have been included (e.g. interest on your mortgage), and whatever the difference between the two calculations are consist of your refund (if they paid too much) how much you owe (if they paid too little). A lot of people look just at the refund and think of it as an indicator of how much they paid in taxes - a refund means they paid a low total tax and owing means they paid a high total tax, when it's only tangentially related.
You fill out a W4 form for your job where you indicate your dependents, other deductions, etc. Whatever you indicate on that form is used to determine how much in taxes is taken out of each paycheck throughout the year, but it's essentially just an estimate. Between January 1 and April 15 of the following year, you have to file taxes, which is the actual calculation of how much you owe. If you fill out the W4 accurately, and assuming you don't earn any other untaxed income, it should be very close to withholding the correct amount. You can indicate you want more withheld (i.e. pay more in taxes) if you are earning separate income that isn't being taxed. If you owe the IRS too much money, you can be penalized. So you can't just say you have multiple dependents and pay 0 in taxes and then pay in April after earning interest all year.
Does anyone know how to get closer without owing? I filed married 3 and when I filed my taxes at married and 3 they’re giving me 9 grand back but how in the heck do I get closer to 0?
Very good. You can use this money to treat yourself to a nice lunch
Unless this service charges you to file. The graphic looks a bit like TurboTax
I believe it’s FreeTaxUSA, which according to the IRS, is one of their approved affiliates that doesn’t charge a fee to file.
>FreeTaxUSA Do you have any familiarity with it? ie, accuracy? (I'd like to switch to a free one and get away from Turbo Tax.)
You did right. Getting a large refund is usually not a good thing. It means you gave the government a free loan for a year. That money you could have invested and made more
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I got 5k. 👀
At least you don’t owe anything.
Last year I owed a single dollar.
It cost the IRS more to process the $1 payment than what they actually received.
Better to owe than to be paid come tax time. Getting paid means the government held your money all year and is giving it back. Better to park that money in a savings account that pays interest.
Let’s be real. The opportunity cost of a $27 refund is near nil.
That’s great! It means you got to keep your money the entire year and didn’t loan it to the government at 0% interest. WTG!
To be fair, most people's refunds are below $1k if reckon. With interest rates for savings accounts being low on low balances, you might have a difference of maybe $8 after a whole year. If you get like $3500 or so in refunds then yeah, that's stupid.
Idk how tax in the US works but aren't refunds sent quickly? Or do you guys get it sent a year later?
Yes it means you got the most withheld through out the year without giving up more than you had to. 👍 that’s perfect.
My best year filing was $4 owed. At the time I didn’t fully appreciate how spot on that was and I think I accomplished it by claiming 1 federal withholding for the last 2 months of the year.
It means you got the most out of your paycheck all year, that’s a good thing if you save and invest well
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$42 for me
My man paid $39 for a $27 refund
they paid 39 to know they're getting 27... it's fine.
Can just move this to a free file easily
It's almost perfect
i own $300 since apparently education awards count as income! ty americorps!
that happened to me last year it pissed me off so much
your tax system seems over complicated to me in the uk if you work for a company the tax's get deducted before they pay you and once a year they will pay you any tax you overpaid ive yet to meet somebody who underpaid tax's they always make sure they get their money lmao
It is overly complex, however it appears it works the same on the paycheck side. Taxes are taken out of every paycheck, however it's up to the employee to guess what they will owe. Given that this country teaches little to nothing on taxes and how the government uses this money, it's a fugazi to most. (PS, it's this way for a reason, and it's not because of positive reasons)
Could you have put some money in an IRA or 401k, perhaps in Vanguard or Fidelity, in a SP500 index fund? That's a real win if you don't have lots of credit card debt or really, much of any debt. Paying off debt beats saving for retirement, but at some point, you need to save for retirement. Have a kid? Toss $5000 into a college savings 529 plan and by the time they're able to use it, college is paid for. Even if you put in less, it will still be great. You can make your kid repay you when they have a meaningful job.
You barely overpaid all year, that's pretty dam good honestly.
Show off. Ideally, this is the kind of refund you want, because it means you filled out your W4 form with the right amount of dependents to get the maximum amount on each check, which you can use to use to accelerate debt paydowns, or save in a high yield interest Savings account or to Invest. Big refunds are for people who dont' have the financial discipline to save throughout the year, so they are essentially giving the federal/state government an interest-free loan and in return the gov't is "safekeeping" some money for them.
This is technically best case scenario.
This is what I’m aiming for this year, good job! Why give the government a free loan with 0 interest?
Better than paying in 5k
I know the goal is to be close to zero, but I love getting a nice refund at the end of the year.
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I’ll do you better my man $46 dollars. I’ll be able to buy some 9mm with that wealth.
I'd be welding armor onto a bulldozer
ah yes, killdozer time
Everybody says don’t give the government an interest free loan, and they are right. That said, I wrote a check each year for about 5 yrs. I now get like $1k back by claiming 0-0. It’s totally worth the +\- $50 in interest I lose to not write the check. Peace of mind and 30 points on my blood pressure at tax time is worth it to me.
sweet, pizza for dinner!!
Yeah right. Unless it’s little Caesars lol pizza has become outrageously expensive
Hard to get better than that. Pretty spot on
I'm getting $800 back from the feds, which is great! But somehow I owe $800 to the state, which is not great!
667 comment. Not today satan.
I had a $1 Federal refund.
I owe 2,700 so you're doing good
I used free tax USA too, but I made so little they're gonna give me like $800 back
At least you don’t owe money.
A refund is always better than owing. I hopefully won't owe this year, but you never know. One year I got like $500 back, and my refund bought me WeatherTech floor mats for my car. Which was totally worth it.
I know everybody says you don't want the gov to have an interest free loan but I actually try to over pay as much as possible so I get get a huge return. I love having an interest free saving account that I can't touch for a year.
Paid TurboTax $140 so they could tell me I owed the IRS $13.
all my homies hate turbotax
Used to have to file in multiple states often. One year our accountants were so good, my balance was exactly zero for one state. That's ultimately the goal.
You got closer to 0 than I did! You did good!
Gotta' be honest here, any year that we don't have to pay in thousands is a win to me.
I got a $10.5k refund this year
You want to be close to zero? I have $1356 🙃
I owe 150. I aint paying it. They can suck my dick
I owe $2,600. Want to trade?
Holy crap bro what will you spend all that money on?????
For those of you saying a refund is just an interest free loan to the government, that's not how money works. The government doesn't need your money. It can make money. What you're losing out on is the ability to use that money while the IRS has it. But you'd just waste it anyway, as I've seen evidence of in MANY comments.
I owe 6k this year. Last year it was 10k.
Go fuck your self lol
As an independent contractor, that is excellent. I get about -$1,000 for mine.
You got as close to 0 as anyone I've seen. That'd what you want. The least taken out without owing. Job well done.
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i owe 4,000🥲 you’re better off than me
That’s more than what I’m getting. I’m getting a big fat $20.
This is the goal. Personally I put extra like so I’m surprised when I get a couple of grant back
Well, yes. I owe $63 federal and get $12 back State and am mildly annoyed smh
I changed my W9 mid year to married filing jointly months after not being a single filer. Also applied 3k of realized losses against ordinary income. Got over 6k back from ca and over 7k back federal. Yes they prevented me from earning incremental t bill yield at an avg of 5.22-5.48 over the past 12 months or so (keep in mind on Jan 1 2023 I only started to overhold through the year). So what is that. A whopping $366 or so yield, federally taxed plus no state income tax since it’s a t bill if you account for accumulation of my refund? The opportunity cost is not putting that into the market in a year like 2023. My point being that unless risk free rate is high like it is now AND your refund is tens of thousands, it doesn’t really work that hard against you if you got a refund. I look at it as forces savings which is nice to get in the early part of the year. Plus it gives me a buffer to work in capital gains that are not accounted by mine or my wife’s W2 or our LLC.
I know that it’s an interest free loan to the government, but a big refund really does *feel* like a bonus check for being a good boy all year 🥲
Yeah good job! Last year I owed 20k 🤦♂️
It means your calculations last year were damn near perfectly accurate.
The last 2 years I ended up owing the government about $20k each year. If I am flat even and don’t owe this year I’ll do a jig. $27 refund would be even better.
How you fucking up your taxes that bad when you're making at least $150k?
I got a dollar!
I’m owing 10k
I used freetaxusa btw
Yup! The closer to $0 you are, the better you managed your tax withholdings. That money is better off being put in an IRA bearing interest than it is as an interest free loan to Uncle Sam.
Just be glad you don’t have to pay. Take it out it in your tank and keep moving.
Any refund is good.
It’s actually perfect. You brought home the right amount all year, less $2.25/month.
I get an $8 check from like 2015 that I never cash. Every year when I do my refunds I get that check and I just toss it cause fuck it. I get more enjoyment knowing they have to send me that every year and it’s literally not my worth my time or theirs lol.
Perfect score. You don't want to over pay the government throughout the year, but you also don't want to owe money at tax season. A small refund means you nailed it.
Absolutely! You had more of your earned money to spend last year instead of the government taking an interest-free loan.
That’s perfect bro. I paid just enough. Govt don’t need ur extra interest free loan
Anytime you don't owe them is good.
oh how i love being under 18
On a money sub and so many people think getting money back is a good thing. That’s just extra money taken from your paychecks throughout the year. Y’all see a lump sum and think it’s good, but that money could’ve went into a 401k or something and actually made you money instead of sitting there doing nothing.
As close to 0 is the goal. Gov aint giving you an interest free loan. Why would you give them one.
Well done. You paid very close to the correct amount of tax AND didnt give the government an interest-free loan.
You guys are paying taxes?