Ahem (clears throat):
A little boy wanted $100 badly and prayed for two weeks but nothing happened. Then he decided to write a letter to the Lord requesting the $100. When the postal authorities received the letter addressed to the Lord, USA, they decided to send it to President Obama. The President was so impressed, touched, and amused that he instructed his secretary to send the little boy a $5.00 bill, as this would appear to be a lot of money to a little boy. The little boy was delighted with the $5.00, and sat down to write a thank-you note to the Lord. It said: Dear Lord, Thank you very much for sending me the money. However, I noticed that for some reason you had to send it through Washington, DC and as usual, those jerks deducted $95.
This reminded me that I still haven’t filed my taxes ;) And to be honest with you, I’m kind of scared. This will be the first year I OWE money back and I kinda sorta don’t know how much that will be yet. Pretty bad for a finance guy, huh? (This will be changing in 2011, believe me)
What I do know, however, is that my nice little nest egg of over $40,000 won’t be so plump afterward. It’ll still be there and reminding me of all my hard work I put in to get it, but after the tax man stops by it’ll definitely need some topping off. You’ll find out how much at one of our next net worth updates ;)
On a related note, this brings up the age old question on whether it’s better to get money BACK at the end of the year, or to break even? The latter camp usually says this is the smartest route to go since it means you weren’t “loaning” money out to the gov’t the entire time, whereas the emotional ones (like me) favor getting cash handed back to us. It was technically owed to us all along, but we like the surprise and rush of excitement it gives us when we find out we’re getting this “free” chunk of money ;) Either method has its advantages and disadvantages though (and it’s fun to think about every now and then!), just make sure you’re purposely falling into the category by choice.
Now praytell – have you filed YOUR taxes already? And if so, did you get any back? I make a guess now that out of everyone who says yes to filing IS indeed getting money back. The ones who file the quickest are excited to get their hands on their money again ;) I’ll probably wait to the last minute this time around…
Get blog posts automatically emailed to you!
I guess I see the two points in your post as this: One, if you’re having to pay taxes, that probably meant you had a pretty good year. If you had to choose between taking away the taxes or the income associated with having to pay the taxes, I’m pretty sure the taxes would be the better deal. All about perspective. Second, I don’t mind getting a refund. Back a few years ago when interest rates were 5-6%, it made a lot more sense to try to come up even, but with the norm being around 1%, it’s negligible. Plus, I think for many, despite best intentions, you would spend some throughout the year to where the ‘out-of-sight/out-of-mind’ factor makes it worth getting the big refund for many.
Sure have!
I’m getting nearly $2,400 big ones back on Feb 15th (I’ve been sort of obsessively checking my refund status via the IRS iphone app). woo hooo
i have to file even though i didn’t make any US income. no other country does this to its citizens…not that i am bitter about it or anything.
every other year when i lived in the US, i LOVED doing my taxes. will i get money back? will i owe? the suspense was awesome. now, i know that i owe exactly zero due to the foreign income exclusion rules, but they still require me to file. basically, the IRS turned what was a fun task for me into a few days of busy work for me to do every year. and i hate it.
as a comparison, the NZ gov’t doesn’t require anyone to file. if you owe, they send you a bill. if you expect money back, you request it and they send it. and i love ’em for it.
We filed 2 weeks ago and are getting $4,000 back. I tried really hard to break even this year but that didn’t happen. Maybe next year :)
We aim for small refund but due to ridiculous out of pocket medical costs this year, qualify for that deduction and will be getting a decent chunk back.
I got everything done in Turbotax but cant file until Feb 14th because of the IRS changes.
Like Jessica I tried to arrange to have my taxes done 2 weeks ago, but was told that since I itemize deductions I had to wait until 2/14/11, so I wait. I prefer a refund. I wouldn’t mind breaking even, but with my current salary I am in a battle against paying….the fight continues.
Not yet. I live in a state with no income tax, so I plan on taxing the sales tax deduction that was extended at the end of the year. I guess the last-minute changed caused the IRS to freak out. I’ve got them prepared and ready to go, but I’m still waiting on the IRS to begin accepting itemized deductions. :-)
I owe the feds $238. However I am getting back $452 from the lovely state of California. I have been trying to “break even” for years. This is the closest i have come. I hate letting the government use my money all year.
ps. . . .I love Turbotax!
It looks like I’m breaking fairly even…Federal Gov’t owes me $56, and I owe the state $85.
After TurboTax takes it’s share I’ll be in the red a bit, but I suppose that’s the way it goes when my paycheck was the size it was supposed to be all year!
Knowing that I was going to itemize I have been waiting till Feb 14th when I can actually send it in. Guess I should go ahead and set it all up though. I kind of expect about $1000 refund, but that is completely a shot in the dark to what it will be.
i screwed up my withholding for my seasonal side hustle and owe fed $318. i did a mock return with just my FT job and i owed $2. i’ll be getting about $300 back from state.
I don’t know exactly what I’ll owe yet, but my estimate is around $10-60 (still waiting on a form to verify my numbers and the numbers being reported match). I think its best to be getting a small refund (i.e. less than $100) because its slightly less paper work if you don’t owe but its not like you’re giving the government a large interest-free loan either.
I haven’t filed, but I’m ready to. If I rush to do it early, I always seem to forget a deduction, or find some of the forms were mailed to me late, so I wait. Between state and federal, I’m getting $1100 back. Paying state $300, getting $1400 from federal and I can’t get that number much lower.
I have to wait for the 16th (can’t get an appt. on the 14th) but we’re expecting a small refund. All going to the mortgage baby!
J Dollaz
This will be my first year of having to pay instead of getting money back as well – not looking forward to it. However, I already did my taxes and know what I owe (thankfully mine are simple – took about 2 hours). I prefer to be in the “as close to 0 camp as possible. There’s no sense in letting them hang on to it interest free, but on the other hand because it comes in smaller amounts, I’m probably more likely to spend it than I would be with a refund check. As for filing, I havent yet – They can wait (while I save up the coin)
I’m getting taken to the cleaners this year with a $5k bill that I owe. First time I’ve had to pay so I’m not too happy about it, but ,it is what it is. I don’t mind paying taxes for infrastructure, defense, ect but when I see the projects that get approved funding (and by funding I’m talking about the money we all give up) it makes me extremely bitter.
I’ve become a fan of http://www.cagw.org or maybe its better to just not know where the money goes so I don’t get worked up about.
Started working on my taxes last night. My bottle of whiskey is not faring very well. I do both W2 work and some contract so I actually like to overpay taxes from my “regular” job to help offset the taxes I owe at the end of the year from my contracting. I feel like I “won” if I end up owing something with 3 digits. For a time it looked like I was pushing 5 digits this year but after some heavy drinking and looking for receipts it’s looking better. Of course after the heavy drinking perhaps I should really revisit the work I’ve done before I file . .
I’m going to owe this year. Somewhere close to $3K I’m thinking, though I got an accountant last year and she’s worth her weight in gold! No more heavy drinking like Jason!
I’m in the camp of being as close to $0 as possible, but I underestimatd my tax liability this year thanks to no longer having rental property deductions. Once I find out what my tax bill is, I will be adjusting my witholding accordingly.
I am submitting all of my stuff to the accountant this week, but I don’t expect to file until the last minute. (While I also save up the $$)
hahah i sent mine off on monday :) i’m of the latter camp these days because i like having my monies up front. i can shuttle it off to my savings where it earns some interest. however, i always get money back because i’m a grad student who also pays the interest on her undergrad loans :p only 1 year out of the 4 years i’ve filed taxes (when i stopped being a dependent lol) have i ever owed, and that was because of a mistake by my employer on our state tax deductions
I haven’t filed yet. What’s worse, I planned for a tax refund similar to previous years’ and intended to use it to pay down my car note. What I did not plan for was how my new job (increased wages) and move to another state (higher taxes plus local taxes) would affect my situation. According to TurboTax, it ain’t looking so pretty. I’m enlisting help this year!
I always file my taxes early but this year I have to wait til Feb 14 because I am claiming expenses as a teacher. I have it all prepared and I am ready to hit send but the IRS won’t accept it early.
I always file early whether I have to pay or get a refund because I like to get it over with.
I am going to owe about 1K this year. It sucks having to owe instead of getting a refund, but I owe because I sold some stock that had large gains on it. So I can’t complain too much :)
My biggest refund yet! 4g’s= 1/2 in emergency fund 1/2 to my student loans :)
I don’t mind getting a bit back. It’s exciting and it feels like another paycheck! If I was getting back like a crazy amount though, like $5000 or more, I’d probably adjust my withholding. That’s the type of money I could put to use over the year.
I think you guys are all doing better than me – well done :) I like being surrounded by SMART people!
@Money Beagle – haha yeah, it was a good year for extra money ;) and now a bad year for owing taxes on it! haha… didn’t really think this one through all the way, but on the good side at least I have the money to pay! I’ve been saving it all like a little squirrel. – Haha, you’re awesome dude. I’m a big fan of doing boring/scary things with a drink in your hand. Good for the soul ;) Kira – You better believe I’m using my accountant again this year too — she always has my back! I’d gladly pay her $1,000 for it too. (which it never ever comes down to, but you get the point. usually we spend around $200 I believe)
@Sense – That would be just too easy for us ;)
@Jessica, Jeannine, Philip, Angie, Lulu – Interesting, never knew about the itemizing rule? I guess I could have just played it off that that’s what I’m wating for too ;) haha…
@Jason@LiveRealNow – That’s actually a GREAT point. If you wait longer into February chances are you won’t miss any of the forms that help keep you on track. I’ve missed one before and it ended up costing me $400 :( I had filed likethe 2nd week of Jan and forgot something! oops.
@Matt – Haha, amen brother. I totally don’t mind paying my fair share of taxes too for this country, but there’s no way I’m digging deep to find out other things that I DON’T want my money going to as it’ll drive me up the wall. I prefer to stay naive since I know I’d never do anything to try and change anything.
@
@
I LOVE that little story! So cute, and yet so true.
I’ve input all my tax information into the software, but I’m waiting until next week to actually file. I also want to confirm with a CPA friend of mine about tuition deduction, so I won’t file until I know that. If all works out, I’ll be getting back a huge amount (for me). Nearly 4x last year’s!
I adjusted my withholding after owing $200 the first year I worked. Now I get back a small amount, and that’s okay. I’d rather get back a little than owe, because I tend to spend what I have *sigh*. I’m still working on trusting that I can move unspent money to a savings account without fear of overdrafting. I like the cushion too much, or I’ve just learned to rely on it that I can’t break the habit.
Last year, my husband and I got over $20,000 back. There was some sort of mistake made on the tax withholding of my husband’s bonuses and they had been taxed at over 70%.
This year, we won’t be receiving quite as much back but will still probably get a hefty amount. My husband prefers to get a big tax refund. His logic is that the IRS will be less likely to audit him if they think the result of the audit will be owing him more money!
I haven’t filed my taxes yet because my brokerage is releasing forms on 2/22! How rude! But I expect to get some money back. I think I’ll withold for as long as possible. Getting that money back is oh so yummy.
Like you, I was really nervous about doing our taxes, and fully expected to owe somewhere in the neighborhood of $4-5k. I was a contractor for the first 4 months of 2010, and didn’t pay estimated taxes, and a colleague who was in the same position wound up with an enormous tax bill.
That said, we did our taxes over the weekend, and the damage is not nearly as bad as we were expecting – we “only” owe about $850 to the feds, and are even getting a tiny refund from the state. AND, if we take $4k out of savings and drop it into my IRA, we’ll actually end up breaking even – owing the feds the same amount we’re getting back from the state.
Yahoo!
I’m one of those who doesn’t want to lend the government money. It’s not far-fetched that it could go bankrupt, but I wouldn’t want to do it anyway. I got our taxes done last week, and I sent state and federal checks totalling $308 a couple of days ago. That’s about how I like it. I’d say I estimated how much to have deducted throughout the year pretty well, except that I really didn’t know exactly how it would work out. Last year we got a refund for the first time, because of credits that I hadn’t been aware of. Of course, that wasn’t bad ;) I just think that if you work, you are entitled to your own money, and you shouldn’t be so unable to trust yourself or master your own money that you have to let the government be your daddy. Unless you like it that way! Just realize that there is never a guarantee that you will get your own money back, and you’ve given away your power by trusting something else that does not really have your interests at heart.
Haven’t filed yet. On my to-do for this weekend. Hopefully I’ll be getting money back this year. I think it’s always a nice surprise to get money back.
This weekend will be a busy weekend for me as I will be preparing quite a few clients’ returns. I want them to be ready for me to hit the E-File button come 2/14.
I suggest estimating your tax liability during the year to get the amount you will owe as close to your withholding or quarterly payments as possible. Be cautious about state and federal underpayment penalties! If you are going to end up owing a huge amount, there could be additional penalties for not paying that bill during the year
I owe the IRS every year for at least 10 years. As long as you keep it small, I think it’s better to have money in your pocket. Yeap, why should I give the IRS an interest free loan?
I’ll do my tax in March and probably will file it at the last minute as usual.
@Travis @ GayFinancialPlan – Yeah, that’s EXACTLY what I plan on doing this year. I want to find out what % I need to set aside and then literally xfer that amount over EVERY single time I get paid. That way it’s labeled correctly and accounted for 100%. And my brain doesn’t think it’s MY money, which is usually the hardest part ;) Good lookin’ out.
Teachers/students can’t file until Feb. 14th because the IRS hasn’t been able to update their system when the college student credit/$250 deduction for teachers was extended. I love that the gov’t can keep all of this straight (sensing my sarcasm?). Usually we file Feb. 1!
Can’t file till the 14th and I would love not to get a refund but either direction you’d at least have to get a small one. Since congress loves 11th hour tax changes plus the way our crap state basis its deduction of your paycheck as a percentage of federal withholding there is no way to get close.
I’ve filed (jointly) and we are getting back about $2500.
Every year I adjust my withholding hoping for a small refund, and every year, I’ve ended up with a large refund. This year, it’s $3,600 from the Fed at $500 from the state. I shouldn’t complain since it’s because I keep qualifying for deductions/credits that I didn’t the year before. (Who knew spending $10K to send a kid to college for a year would result in a higher refund???)
I only like filing my taxes when I know that I will have money coming back.
Great story!
I haven’t filed my taxes yet. I am waiting for two 1099’s still, and have been told they are in the mail. Hopefully, I will break even and not owe money because quite frankly, I don’t have it! I did pay quarterly into my taxes for my contracting work though, so maybe that will save me. Every other job I had they took money out. I guess I’ll find out on Saturday when I sit down to do it!
Haven’t filed yet. No doubt I’m going to owe. I’ll probably end up doing them near the end of the month.
I haven’t filed my taxes yet for this year. I usually try to spend as much as I can into my business so I don’t have as much income. I’m hoping I get money back this year.
I’ll probably wait to file till the last minute too, J. And like you, I don’t know exactly what I’ll owe. I just know it’s probably a lot. Not fun to pay taxes, no matter when you do it.
Ideally I’d like to break even. Unfortunately we underpaid last year so we have a couple of checks to mail off to the tune of $1500. Stinkin state nailed me with underpayment penalties on $550! I was so surprised. I’ll be making quarterly estimates this year.
I filed a week or two ago and will get about $1600 back once they can start processing my return (hate that I filed early but have to wait!). Last year I would’ve almost broken even if you exclude the first-time homebuyer credit. This year was my first with the mortgage, so I wasn’t totally sure how much I’d be getting back. I’m going to look into adjusting my withholding this year to try to come out a bit closer to even, but if it’s on the fence, I’d rather err on the side of paying a little too much up front and getting a refund than underestimating and having to owe next year!
I’m a bit late on here but we got a nice fat refund check due to a new baby and my husband’s nice signing bonus with his new job. They taxed his bonus a lot higher than needed and then we got most of that back. But we usually try to break even. We need splurge on a new vacuum and a pair of boots for me but the rest goes into savings.
Oh man, I miss those days! I used to get taxed up the wazoo on my bonuses too. Sadly those stopped a good 2 years ago… but glad you guys got some back :)
For 2009 and 2010 I filed an extension and didn’t file until October. I do not plan to do that this year. We paid estimated taxes throughout the year, but my estimation was too high, so we should get something back, so yes I want my money back! :-)
Awesome!! I hope you DO get a lot back then in that case, I love it :)