Filing Taxes for 2006
Jan 12th 2006, 6:28 am
#136
Thinking about it
Joined: Oct 2005
Location: Mid-West
Posts: 9,435
Re: Filing Taxes for 2006
Originally Posted by fatbrit
No idea how you were doing it! I've got XL running on the other machine at the moment if you want me to crunch the numbers for you.
But, we're not talking pennies here like you insist we are. It can possibly be worth 250 to 1,000 bucks a year in gains for an average person on this board, possibly much more if you're borrowing money on your credit card that you lent to the government for nothing like our gingered Michelle!
And it really isn't that hard to do.
But, we're not talking pennies here like you insist we are. It can possibly be worth 250 to 1,000 bucks a year in gains for an average person on this board, possibly much more if you're borrowing money on your credit card that you lent to the government for nothing like our gingered Michelle!
And it really isn't that hard to do.
For me there is no other oopportuntiy cost bar the interest I'm losing out on (ie no credit card borrowings, no fees for instant refunds, etc) and to me I am happy to sacrifice that to take the money out of my reach for a year and guarantee a lump sum.
Jan 12th 2006, 6:30 am
#137
Septicity
Joined: May 2004
Posts: 23,762
Re: Filing Taxes for 2006
Originally Posted by BigDavyG
Point taken, but I'm not borrowing on my credit card, and $250 a year is about £140 a year which is less than 50p a day which I can save in other ways and still get my lump sum from the IRS which I like.
For me there is no other oopportuntiy cost bar the interest I'm losing out on (ie no credit card borrowings, no fees for instant refunds, etc) and to me I am happy to sacrifice that to take the money out of my reach for a year and guarantee a lump sum.
For me there is no other oopportuntiy cost bar the interest I'm losing out on (ie no credit card borrowings, no fees for instant refunds, etc) and to me I am happy to sacrifice that to take the money out of my reach for a year and guarantee a lump sum.
If you'd like to post it here instead, I'll look after it for you and send it back in 13 months without interest. Throw in a can free can of Heinz beans for you, too!
Jan 12th 2006, 6:31 am
#138
Thinking about it
Joined: Oct 2005
Location: Mid-West
Posts: 9,435
Re: Filing Taxes for 2006
Originally Posted by Celsius
Who gives a shit about the political leanings of a poster? Surely what matters is getting sound/constructive advice/comments... 
Jan 12th 2006, 6:32 am
#139
Thinking about it
Joined: Oct 2005
Location: Mid-West
Posts: 9,435
Re: Filing Taxes for 2006
Originally Posted by fatbrit
If you'd like to post it here instead, I'll look after it for you and send it back in 13 months without interest. Throw in a can free can of Heinz beans for you, too!
Jan 12th 2006, 6:57 am
#140
BE Forum Addict
Joined: Mar 2003
Location: Florida
Posts: 1,296
Re: Filing Taxes for 2006
Originally Posted by BigDavyG
Point taken, but I'm not borrowing on my credit card, and $250 a year is about £140 a year which is less than 50p a day which I can save in other ways and still get my lump sum from the IRS which I like.
For me there is no other oopportuntiy cost bar the interest I'm losing out on (ie no credit card borrowings, no fees for instant refunds, etc) and to me I am happy to sacrifice that to take the money out of my reach for a year and guarantee a lump sum.
For me there is no other oopportuntiy cost bar the interest I'm losing out on (ie no credit card borrowings, no fees for instant refunds, etc) and to me I am happy to sacrifice that to take the money out of my reach for a year and guarantee a lump sum.
Okay so you don't trust yourself to put the extra money away you'd get by altering your withholding ...so set up an automatic debit savings account up e.g. ING Direct. They would take the money out of your account instead of the IRS taking out of your wages and it would be gaining interest monthly- take it out in Feb/March next year and give yourself an even bigger lump sum than Uncle Sam will give you.
Jan 12th 2006, 7:03 am
#141
Septicity
Joined: May 2004
Posts: 23,762
Re: Filing Taxes for 2006
Originally Posted by BigDavyG
If you wanted to do my return for me you'd be more than welcome to it.
The correction to your grievous error is here: http://www.irs.gov/pub/irs-pdf/fw4.pdf, not your tax returns.
Ignore the stupid IRS calculations on the sheet and realize that increasing the figure in box 5 will reduce your withholding and you can make corrections back the other way by placing a figure in box 6. I'm told that the IRS never queries any figure of 9 or below in box 5. You submit the form to your HR department. I don't use this form myself, but do complete it for my spouse. A little experimentation and understanding with a few corrections produces a nice and suitable tax bill for her every April. Anticipated bonus payments will automatically result in a box 5 "9" going straight into HR, corrected back after the payment is made so as not to throw my estimates too much. Probably takes about 2 or 3 hours of my time a year and saves us over a thousand bucks or so.
Jan 12th 2006, 12:49 pm
#142
Back where I belong!
Joined: Aug 2005
Location: Melbourne, Oz to Banbury, England to El Mirage, AZ & now back to England!
Posts: 5,989
Re: Filing Taxes for 2006
Originally Posted by fatbrit
If you hadn't given it to the government to start with, you wouldn't have found it necessary to run up such a bill on your credit card with high interest payments. So you could have bought your house sooner!
Jan 12th 2006, 12:57 pm
#143
Septicity
Joined: May 2004
Posts: 23,762
Re: Filing Taxes for 2006
Originally Posted by Partystar
That's simply not true!
Explain.
Jan 12th 2006, 1:08 pm
#144
Back where I belong!
Joined: Aug 2005
Location: Melbourne, Oz to Banbury, England to El Mirage, AZ & now back to England!
Posts: 5,989
Re: Filing Taxes for 2006
Originally Posted by fatbrit
No idea how you were doing it! I've got XL running on the other machine at the moment if you want me to crunch the numbers for you.
But, we're not talking pennies here like you insist we are. It can possibly be worth 250 to 1,000 bucks a year in gains for an average person on this board, possibly much more if you're borrowing money on your credit card that you lent to the government for nothing like our gingered Michelle!
And it really isn't that hard to do.
But, we're not talking pennies here like you insist we are. It can possibly be worth 250 to 1,000 bucks a year in gains for an average person on this board, possibly much more if you're borrowing money on your credit card that you lent to the government for nothing like our gingered Michelle!
And it really isn't that hard to do.
I might decide to do my own taxes next year, plus I might change the tax that we have taken out of our paycheques to the minimum so that we end up not having to pay anything back. I just don't feel comfortable doing all this, this year, so I'll wait until next year. Hubby has always done it this way, so I'll have to have a good chat with him to see how he feels about changing it.
I've heard some really good advice on here about what to do with your money instead of 'lending' it to the IRS. I especially like the escrow account idea. So thanx very much to everyone for giving your insight about what you do, it will come in handy next year!
Jan 12th 2006, 1:19 pm
#145
Septicity
Joined: May 2004
Posts: 23,762
Re: Filing Taxes for 2006
Originally Posted by Partystar
Must point out that my credit card is 0% APR, has no annual fee & I get air miles, so I use it for my benefit, no company takes anything away from me. Next I shall get a credit card with cash back, like I had in England. I buy everything on my credit card, then pay it off with money from my checking account. That way I get more interest on my money as I hold onto it for longer.
If the credit card balance is bringing your FICO down though (you mentioned it in another thread, I believe, on buying a house), see if you can get the limit on it increased or, alternatively, pull down the balance. An ideal ratio is using around 20% of the limit. Once you go over 50%, your credit score will nose dive.
Jan 12th 2006, 1:22 pm
#146
Back where I belong!
Joined: Aug 2005
Location: Melbourne, Oz to Banbury, England to El Mirage, AZ & now back to England!
Posts: 5,989
Re: Filing Taxes for 2006
Originally Posted by fatbrit
Explain.
Having a smaller amount of tax taken out of account would not have helped us much to resolve these problems. The credit card is the least of our problems right now, but of course it would be nice just to have it paid off. Although the difference in the tax taken is quite minimal. Like I said in my previous post, I might change the rate next year, with hubby's approval, but pretty much, what I say goes in our family, hubby is not financially inclined!
Jan 12th 2006, 1:47 pm
#147
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: Filing Taxes for 2006
Originally Posted by anotherlimey
I'm now leaning towards doing my own taxes via one of the Tax programs, it can't be that hard........
Jan 12th 2006, 1:51 pm
#148
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: Filing Taxes for 2006
Originally Posted by Taffyles
If you have a mortgage, make charitable donations to goodwill, have children (in daycare) etc etc you don't have to be earning 7/8 figures to get a substantial refund. which makes no sense at all to let the IRS hold for you for 13 months. In our case, if we didn't claim extra dependents we would get a refund in excess of $5000- you don't have to be a genius at maths to work out that';s $400 a month. Yep you bet I begrudge the IRS making interest of our money. I put the 400 into Ing Direct and get interest on it. I use it as an escrow account (cos that's another bloody huge rip off in this country) and pay property taxes, homeowners and car insurance out of it annually with some to spare- all gaining interest monthly. And we still get a modest refund of a couple of hundred.
But as you said "each to their own"- many people like having that big refund sent to them rather than save it up for themselves. Same thing with escrow accounts- why let your mortgage company make interest out of your money and involving property taxes that can be quite a substantial amount of interest- yet people still think escrow accounts are the best way. Okay if you haven't got the self discipline to put the money away each month- maybe they are, but its penny and dollar foolish really.
Back to tax- my daughter in law over- withholds just to get a big tax refund, which she uses to pay off her credit/store cards (some of them over 20% interest!). The only way she can buy clothes etc is by credit card (cos the silly bugger is way overpaying tax every month). She uses H&R cos she doesn't trust turbotax, pays their fee( tax deductible granted but that doesn't mean free) and then pays to get the refund instantly...okay if I had nothing to do for the next hour I could probably work out just what that tax refund was actually 'costing' her. My son has given up trying to get through to her about it.
But as you said "each to their own"- many people like having that big refund sent to them rather than save it up for themselves. Same thing with escrow accounts- why let your mortgage company make interest out of your money and involving property taxes that can be quite a substantial amount of interest- yet people still think escrow accounts are the best way. Okay if you haven't got the self discipline to put the money away each month- maybe they are, but its penny and dollar foolish really.
Back to tax- my daughter in law over- withholds just to get a big tax refund, which she uses to pay off her credit/store cards (some of them over 20% interest!). The only way she can buy clothes etc is by credit card (cos the silly bugger is way overpaying tax every month). She uses H&R cos she doesn't trust turbotax, pays their fee( tax deductible granted but that doesn't mean free) and then pays to get the refund instantly...okay if I had nothing to do for the next hour I could probably work out just what that tax refund was actually 'costing' her. My son has given up trying to get through to her about it.
I totally agree! It made me a bit nervous to claim extra dependents.....but in the long run, I want my money monthly, not at the end of the year.
Also, what is the thing about escrow accounts, I don't understand that. I was just looking at our mortgage transactions and saw certain amounts in "escrow accounts" what is that all about?
Jan 12th 2006, 1:56 pm
#149
Sursum corda
Joined: Sep 2002
Location: Richmond Hill, GA USA
Posts: 38,860
Re: Filing Taxes for 2006
Originally Posted by AmerLisa
I totally agree! It made me a bit nervous to claim extra dependents.....but in the long run, I want my money monthly, not at the end of the year.
Also, what is the thing about escrow accounts, I don't understand that. I was just looking at our mortgage transactions and saw certain amounts in "escrow accounts" what is that all about?
Also, what is the thing about escrow accounts, I don't understand that. I was just looking at our mortgage transactions and saw certain amounts in "escrow accounts" what is that all about?
That's the money they withhold to pay your insurance (if you don't pay it yourself), taxes etc.
Jan 12th 2006, 1:57 pm
#150
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: Filing Taxes for 2006
Originally Posted by cindyabs
That's the money they withhold to pay your insurance (if you don't pay it yourself), taxes etc.
