Taxes

Discussion in 'Off-Topic' started by Cycloneman24, Feb 28, 2019.

  1. cy4life94

    cy4life94 Active Member

    Sep 26, 2012
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    I believe a more realistic example would be say I get a $2400 dollar refund at the end of the year. Instead of the refund let’s say I save the $200 per month and make 8% percent on it for the year for a total of $2503. Short answer is yes, you are better off getting as small of refund as possible back, but for most people it is not enough of a difference for the effort it would take.
     
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  2. dmclone

    dmclone Well-Known Member

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    I don't know if this is fake news but here you go:

    https://www.atr.org/treasury-tax-refunds-match-previous-year


    In net, the Tax Cuts and Jobs Act is a tax cut for the majority of Americans, including middle class families:



    • 90 percent of wage earners have seen more money in their paychecks.
    • Taxpayers earning between $20,000 and $50,000 are seeing net federal tax cuts of 10 percent or higher according to the Joint Committee on Taxation.
    • 91 percent of taxpayers with annual income between $64,000 and $108,000 are seeing a 2018 federal tax cut averaging $1,400 according to the left of center Institute for Taxation and Economic Policy.
    • A family of four with annual income of $73,000 is seeing a 60 percent reduction in federal taxes totaling more than $2,058.
     
  3. Herkster

    Herkster Active Member

    Feb 12, 2016
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    I'm a refund guy, I claim 0, wife claims 4 or something silly. We still got back like $4,300 this year. Took that money, paid off her car. I would find a way to blow the $375 extra we could see every month in a paycheck, so I prefer it this way.
     
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  4. CloneFan4

    CloneFan4 Well-Known Member

    Aug 5, 2010
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    Don't be dense. Nowhere did I say a 62% return is normal. Take the average 9% return on investments and you're still cash ahead.
     
  5. atlantacyclone

    atlantacyclone Well-Known Member

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    #25 atlantacyclone, Feb 28, 2019
    Last edited: Feb 28, 2019
    A refund only means that you have given the IRS an interest free loan... it is not a good thing or a bad thing ...
     
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  6. Trice

    Trice Well-Known Member

    Apr 1, 2010
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    Nice backpedal. No, you did not literally say those words. It was implied.
     
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  7. CloneFan4

    CloneFan4 Well-Known Member

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    Yes the guy who literally works with the stock market thinks the average investor can make a 62% return yearly. Glad you could put those words in my mouth.
     
  8. stateofmind

    stateofmind Well-Known Member

    Jul 16, 2007
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    I actually get a refund every year, and since my wife doesn't work I usually write a check to our IRA for $5,500. If you are in my position, make sure that you take advantage of this. Our return goes up around $1,750 by doing this. ($5,500 into retirement and it ends up costing us $3,750)

    We are good at saving our money, so I shouldn't get a refund. I'm actually disappointed in myself for not pushing us to open a money market, high-interest savings acct, or a CD with the extra money in our checking acct. It earns us around $.18/month when it could be earning upwards of $20/mo.

    In short, I have been okay giving the gov't an interest free loan, since it's obvious our gov't needs the money and I'm a moron and doesn't take advantage of my extra money... until now. :)
     
  9. Trice

    Trice Well-Known Member

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    Again, I concede that you did not literally say those words, but you're either dense yourself or being willfully dishonest if you can't understand what your post implied. In response to someone who said the OP should do what works for him in regards to his taxes, you said don't do that, here's what I do, and here was my return - as if that were a thing that is achievable for most people.
     
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  10. capitalcityguy

    capitalcityguy Well-Known Member

    Jun 14, 2007
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    I agree and disagree with this.

    If you are an investor and use that money during the year to make investment vs sending to the gov't , you're ahead by not tying up that money and getting zero return on it. So from that standpoint, it does matter. The numbers prove that out.

    That said, most people won't do that, so in the end for the majority of people, it probably is more personal preference.
     
  11. Cyclone.TV

    Cyclone.TV Well-Known Member

    Sep 3, 2016
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    Yeah, and if I get a 2nd job I’ll have more money than if I don’t.
     
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  12. CloneFan4

    CloneFan4 Well-Known Member

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    Again, thanks for putting words in my mouth and using your telepathic powers to communicate what I was implying. You're a big help.
     
  13. capitalcityguy

    capitalcityguy Well-Known Member

    Jun 14, 2007
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    Do you disagree with my answer?

    Your initial response was patently false, but I gave you the benefit of the doubt because like me, you realize most won't use the larger paycheck received during the year to work to their advantage....i..e...they'll just spend a little more sooner.

    But there are those, albeit the minority, they would consider the advantage of not shipping excess tax payments to the government throughout the year only to receive it back without interest.

    That was the question the OP was trying to understand.
     
  14. Cyclone.TV

    Cyclone.TV Well-Known Member

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    Again, it’s personal choice. Just because you can make more money doesn’t make it the right thing to do - it’s a choice. Some like the money now, some like it later. Some invest, some spend. It’s all personal preference. It’s not patently false.
     
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  15. capitalcityguy

    capitalcityguy Well-Known Member

    Jun 14, 2007
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    Look at the OPs original comment . They took the time to start a thread to better understand this question. it is a valid one, despite what you originally implied. You said there was no difference, which is false.

    For you to be correct, you'll need to argue that the "time value of money" isn't a real concept. It is, and I can give you a laundry list of links if you need them.

    I dollar in your hand today is more valuable to you than one given to you in 6 months.
     
  16. 3TrueFans

    3TrueFans Just a Man in the Middle
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    He didn't say there was no difference.
     
  17. mtowncyclone13

    mtowncyclone13 Well-Known Member

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    I'm pretty financially astute. I over-analyze a lot and enjoy discussing personal finance. But here's the deal... I *still* like getting a refund. We save for retirement, college, cash savings, pay extra on our mortgage, etc. So we are responsible and getting $1,000 back (or whatever) at once is a nice little bonus. We got a lot back this year and I put half of it into 529 plans and the other half into a future residing project on the house. Next year we'll owe and I'll dip into savings to pay for it. Getting a small chunk of cash at once is a good feeling. It may not be the absolute best penny-pinching thing to do but if it's not harmful that why not enjoy that feeling?
     
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  18. capitalcityguy

    capitalcityguy Well-Known Member

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    touche

    But in reality there are consequences and his reply suggested there were none. The OP was trying to understand the overall argument for and against. Yes, it is personal preference (i.e...no one forces you one way or another), but that doesn't answer the question as to why you'd do one vs the other.
     
  19. cyfan92

    cyfan92 Well-Known Member

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    Time value of money says a dollar today is worth more than a dollar next spring. Refunds are not "bonus income" checks that the financially illiterate claim them to be. The IRS withheld more of YOUR money at a 0% interest rate.

    However, there are sooo many people in this country that can't save a couple hundred dollars for a rainy day fund. So I get why a refund amount makes them upset. It's easier to complain about the IRS then to look into the mirror and tell yourself you need help with your money habits
     
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  20. Cyclone.TV

    Cyclone.TV Well-Known Member

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    Consequences?? You could invest and lose, you know.

    The question as to why you’d one vs the other is the exact reason I say “personal preference”. For some, it could actually save them money because they don’t spend it during the year. Some could make a little. Some don’t care if they make money off of it. I could make more money if I wanted to by working more during the year, too. I choose not to. It’s a preference.
     

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