Ask The Readers: Are You Getting Your Tax Refund this Year? (Answer to win $10!)
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LukaIsntLuka
Winners update!! -- Congrats to the following winning submissions:
No Refund.. Submitted by Misty (comment #32): "We aren't getting a refund this year, we adjusted our tax form so we paid a little bit and got more money to use during the year."
- @coloradoeyes: "I plan yearly with accountant 2 get as close 2 $0 refund as possible. I want 2 earn interest on $, not let the govt."
There's been a lot of buzz online about tax refunds lately. Some filers of 2008 returns are finding out that they can't even get their own state refund, due to issues with state budgets. Others have been keen to coming problems for some time, rushing to their employers to demand the maximum deductions and even getting their Earned Income Credit payments coming through their paychecks.
As questions of solvency and preparedness begin to become mainstream in every household, what can tax-payers do to avoid granting the government an interest-free loan on our own money? Do you even care? What can you recommend for the uncertain future? We want to hear about it!
Do you have a tip for making sure your tax money comes back to you at the end of every year? Are you a stickler for making sure you get your tax money up-front, either by claiming huge deductions or even exempt status? Are you likely to hand everything over to your accountant and say, "Here you go. Let me know how it turns out?" Do you have some special advice for the self-employed? Or are you someone who LIKES getting it all back in one lump sum, as part of a informal savings plan? Give us your views and insights into tax refunds now (before the year runs out), and we'll enter you to win one of two $10 gift cards from Amazon!
Those of you who aren’t familiar with the “drill,” read below for full details:
Win a $10 Amazon Gift Certificate
We're doing two giveaways -- one for random comments, and another one for a random tweets.
How to Enter:
- Post your answer in the comments below, or
- Tweet your answer. Include both "@wisebread" and "#WBAsk" in your tweet so we'll see it and count it.
If you're inspired to write a whole blog post, please link to it in the comments or tweet it.
At the end of the drawing, we'll update this post to include (and link to) all of your helpful responses.
Giveaway Rules:
- Contest ends Thursday, July 30th at 11:59am CST. Winners will be announced after July 30th on the original post and via Twitter. Winners will also be contacted via email and Twitter Direct Message.
- You can enter both drawings -- once by leaving a comment and once by tweeting.
- Only tweets that contain both "@wisebread" and "#WBAsk" will be entered. (Otherwise, we won't see it.)
Good luck!
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One word: VITA. Look for a VITA site in your area at tax season. VITA stands for Volunteer Income Tax Assistance. This is a tax filing service that most people can use. As long as your taxes are not complicated, these sites have IRS-trained volunteers that prepare and submit your tax returns online. You avoid preparation fees, filing fees, and refund anticpation loans. Avoid paying to get your money and go with a VITA site. They are everywhere.
Thanks for the information on VITA. A lot of people don't know about this company. They tend to do a really great job. I appreciate there service every time i approach their establishment yearly.
I am getting nothing back this year. I am scrapping by and have missed getting my Zolaf for a week now not having the cash to get them. And the cost is only $8.00. With all that is going on I am just thankful my 2 adult kids are grown and on thier own and are not affected by thier mom's poverty.
No cash and no medical coverage leaves you in doubt if living life is really worth living witch is not my normal way of thinking.
To offset grocery prices I planted a garden this year my very first. All the rain is making my harvest very very poor which in itself very disheartening.
I so worry about our nation's future.
I don't particularly like letting Uncle Sam have my money to play with all year then getting it back in a big lump, but I prefer a refund to the alternative of having to pay more when I file than I've already paid through payroll deductions. So we try to cut it close but err on the side of caution. Our son being in college has helped us get refunds even when we cut it a little too close on payroll deduction calculations. Both the hubster and I have run our own businesses in the past, and for all situations (self-employed and not), I recommend getting a good tax prep software package. We use TaxCut but I'm sure others are good, too. It just makes me more confident that I'm not missing anything.
But I actually prefer paying taxes. It means that I haven't given the government a free loan. I always try to invest/save a good portion of my paycheck, so I figure that I'll have a better chance at making a bit of interest should there not be enough taken out of my paycheck. Of course, I'll then have to pay taxes on that interest, so maybe it's not the best idea in the world, but I just don't like giving the government an interest free loan. They don't give me any!
I expect a federal tax refund this year, but I live in California so I might be looking at an IOU on that end. I've been using H&R Block for the past couple years and I like it. Quick and easy. If you do it online there is live help, and they keep a record of all my previous returns which I like if I need to refer back to them for any reason.
I hope I will get refund, I use H and R Block too. They are really helpful if you get audited.
I'm self employed, and find April-June to be tough months for me. Any tax due for the prior year must be paid, estimated taxes for the 1st quarter of the new year must be paid and I put a lump sum payment into my SEP and (if I qualify) my Roth IRAs. And then 2 months later the IRS wants 3 months of estimated tax payments even though I usually haven't been paid for one of those months yet!
If I calculate improperly, all of those payments can wipe me out, which isn't fun. Ideally, I want the federal taxes due to be close to what I paid so I'm not paying too much through the year and also not stuck with a huge tax payment due on April 15.
One thing I've learned that is convenient is that any refund due back to you can be applied towards the next year's taxes. And since self employed people are often sending in quarterly estimated tax payments, you can just have the overage applied towards the next payment due. No more worries about when you will get your money back!
I always try to have my stuff to my accountant by 2/15. Then I get in before the rush and get my return in two weeks max.
I do not like getting money back, but with a couple rental properties it is too difficult to estimate how much to adjust my withholding.
plus my accountant is quite conservative.
im hoping i get a refund! i thought about changing my w4 because im currently claiming no exemptions. but im worried about owing at the end of the year. im in a situation where i know i couldnt set aside some of the extra money in case i did owe, i would put it all towards bills.
im currently look for a another part time job, my other was seasonal and ended a month ago, im going to be in serious trouble soon.
was thinking about selling something on the side (like avon, pampered chef, etc.) but i heard someone else talking about how that messed up their refunds.
i dont know what to do, so i do nothing...
I seem to owe every year. I own three investment properties and somehow I still owe. I've gone to three different accountants in the last six years, and have owed for all six. It is a bit depressing as every year I tell my wife, I think we're getting a refund this year! ...and it never happens.
Now, for 2009, we gave birth to triplets, so I am hoping when I file in 2010, I can get the tax credits on the kids and that will make up the shortfall.
I live in California so I'm expecting an IOU from the state, but I still expect a the return from the federal government.
or get back around $100. This year, however, I got laid off and started a business, so I'll be handing it all over to my CPA.
i actually got my money from california this year, which was a serious surprise! i filed right before april 15 and was owed $90, which doesn't sound like a lot, but as a very poor grad student on loans, its huge! a month later i got a real live actual check (well, direct deposit)! i'm glad i filed then and also that i'm done with CA, after having moved last year, b/c i could not deal with whats happening there now.
I don't think I will get a refund this year. We will be in a higher tax bracket, and my husband is going back to school, so we will be deferring his student loans, so we cannot deduct as much.
My husband & I are both self employed, so we pay our taxes when we file. I think if we were taxed again though, I would try to get as much each week vs. getting a big check for taxes. We used to like the big check, but now the money is needed throughout the month instead.
My goal is to come as close to no refund as possible each year. This has worked out well the past couple of years where we got back less than $300 total from both federal and state in 2008 and paid less than $200 for the 2007 tax year.
I don't want the government to earn interest on MY money if I can do so myself.
Got mine months ago! Filed online.
I have been doing my taxes, and the taxes of my family for years so I have included some of the tips that I use when tax season rolls around.
1.) Do your taxes yourself and save money. The IRS website includes links to approved tax prep sites.
2.) Any health problems? Keep detailed records and receipts of all medical bills (doctor co-pays, eyeglasses, medications,etc.) because you may be eligible for a deduction.
3.) Travel for work, but don't get reimbursed? Travel expenses related to work are eligible for a deduction as well. Keep a detailed record of your car mileage for these trips and you may be pleasantly surprised.
4.) Take advantage of all of the home credits and that are available, especially this year!
There are some many tips, but the best advice I can give is to make sure that you grab a tax instruction. They breakdown the tax laws that apply for the year and list so many benefits that we can take.
We are trying to calculate our withholding so it will be plus/minus Zero in the end, but we will probably get a small amount back (hopefully).
I agree with Jocelyn . Do your taxes yourself. It's not that complicated and there are a lot of websites (including the one from the IRS) that can help. I also called the IRS a few times with my questions.
In my case, ... I will probably not get a refund. Then again, I don't quite earn enough money to have to pay taxes anyway. On years that I DO, I always have at least 10% charitable contributions.
I get a Federal refund each year since I only claim myself on the tax form that I filed with my employer. The four years that I lived in Illinois, however, I had to pay abou $20 in taxes each year despite having the state income taxes withheld from my paycheck.
I have worked for almost 40 years (started as a 16-yr old). I have learned 2 things:
1. Manage your withholding so that you are +/- approximately zero in taxes owed.
2. I am in that income strata (I don't think you could even call it lower middle class anymore) so that I've always made "too much" money to be eligible for any tax credits but not enough money to invest in any tax shelters. Now that I've been laid off, I'm being penalized for using 401(k) savings to start my own business (which is going very slowly). I know that's the rule for 401(k), but does that seem right?
As a teacher, I am eligible for up to $250 back for school supplies paid out of my own pocket. This helps tremendously. I plan to have less withheld this year and hope it all works out!
My husband and I always try to work out our exemptions so that we pretty much "break even" or get a small refund without owing anything. We'd rather have that money throughout the year to use or earn interest on ourselves than have to wait for a larger lump sum while allowing the government to earn interest on it. It usually works except this year we actually got a sizable refund because we bought our first home in 2008.
Got good advice from my CPA this year:
Filed electronically as in the past BUT in lieu of having my refund check mailed we had it automatically credited to my bank account.
He was right. Received my refund way faster than in years past and confirmed with a couple of friends that were still waiting for their "check in the mail" weeks after I'd received mine.
I have seen how many people do not know they are entitled to so much money... Money or offers that may be waiting in the goverment to do so many things in people´s lives.
I think it is not a question of if you are going to get taxes returned, I think it is a question of you spending half an hour this year, and every year actually, doing the research you need in order to know if you had someone stealing your identity, someone who gave you money in their will and you do not know, research about getting your house for a minimun price (such as the cases in which the people who did not pay their taxes, or their morgages), research about how is your credit report, research about how to do the things you need to accomplish your dream...
People worry about money, and they forget what they need the money for, meaning, you focus so much in ONE method of getting there, you forget there are so many other ways... This is why, many people do the research for you, and make money out of it... It could even present itself as an opportunity to get what you need, and in the way, collect the information others need, and either sell it, or share it...
Our minds are our own limitation, and we need to get the eyes on the ball again, not just on the field...
We usually get a refund each year. I know and agree with the arguement that you need to manage your withholding so that any refund/payment is as close to zero as possible. That said, there is some psychological effect about getting that refund. It's a forced savings account(albeit with a lousy 0% rate). For some folks it's the only savings that can accumulate.
This year I'm trying something different. At the beginning of the year, I changed my payroll deductions to most closely achieve a zero-owed-zero-refunded tax balance at the end of the year. I fully expect to have to tweak my deductions in the second half of the year as the deduction calculations are not precise enough to hit exact, desired ending amounts without adjustments.
These monies are helping to ease day-to-day financial pressures of work furloughs, no raises, the dissolution of my company's public transit subsidy and higher consumer prices on almost everything. For the first time in many years I have been able to establish an emergency fund. It is still modest but gives me enormous peace of mind.
My husband is steadily self-employed and uses Turbo Tax. TT includes a federal worksheet that allows you to estimate taxes for the following year. We budget accordingly and try to keep it pretty close to avoid a big refund or payment due. This allows us the freedom to save more and gain a bit of interest.
Taxes for me swings wildly. One year I could end up owing $5000, the next year, I could get $2000 back. It is almost impossible to predict and I do not own a business!
For 2010, I am letting the government get their free loan, hopefull, as I am Head of Household and 2, but with hold at single and 2, and I own a home, so get the interest/taxes deduction. I do make a good income, and could save a lot of it, but I am tired of writing $4K and $5K checks.
I live in Missouri and had to pay a little bit of taxes this year to them. 4 months after filing, they mailed me a letter saying that they had received my return in March, but not the money, and now I had penalties and interest. I called them. They looked it up, said they had received the check, but not YET credited it to my taxes account!
This is yet more incompetence at the highest levels.
I have one solution for this mess: The FAIR TAX. There will be no more with holdings on a federal level, NONE. I say get rid of this mess and go to a consumption based system.
I was reading a few weeks ago that 75% of the legislation that goes through our federal government is TAX related! A FAIR TAX would eliminate all this work.
We aren't getting a refund this year, we adjusted our tax form so we paid a little bit and got more money to use during the year.
I got my federal refund by direct deposit and promptly spent it on dental work. Texas doesn't have state income tax, so technically I never got a state tax refund :)
It's relatively cheap, simple to use, maximizes the potential refund you get back, and (I think) it's fun to use.
I try to get the best of both worlds -- claim some exemptions on my payroll, but not the maximum I think I'm due because I like getting at least a little refund in April.
I strive not to get a refund (unless it is soley from a credit) but pay as little extra as possible. A tax refund is basically an interest free loan to the government. I like to put that money in an interest bearing savings account instead and budget for a payment every year come April.
I filed in early March and got my refund within a week of filing before the state ran out of money. File early and file online.
I go to the IRS website and use their withholding calculator (with my latest pay stub) to see if I'm on track or not. Last year, I checked it out right after getting married and adjusted my withholding so that it was dead-on (instead of having to owe).
http://www.irs.gov/individuals/article/0,,id=96196,00.html
I did have to run the numbers several times (because I was leaving things out) and the calculator was showing one more paycheck than I actually had coming (which I could adjust), but in the end, it was great to know about how much my taxes would be and where I stood.
I'm planning to get a refund on Federal Taxes, and probably on state, although I cut that closer. Can't seem to get it just right...
I'm not getting a refund this year. My income was not high enough for taxes (still a student...).
Taxes are tough in our house. We have one W-2 income and two self-employed incomes. Usually, we just claim zero and have the max taxes taken out of our one W-2 paycheck.
Although this has resulted in a loan to the gov't the past few years, we have found that with fluctuating self-employment income, it gives us a nice insurance policy against huge out-of-pocket tax payments at the end of the year. (We aren't always good at estimating taxes quarterly,mostly due to the self-employment tax penalty and medicare tax, plus our income is so irregular).
That said, I am trying to be more organized this year. Instead of throwing receipts and papers in a shoe box and having a two-week marathon with Turbotax every March, I am writing down expenses and potential deductions in a notebook as they occur. I have a page for charitable deductions, medical expenses, etc. Anything that could be useful.
This year is also a bit different because we are having a baby in November. the last one cost us at least $5,000 out of pocket for hospital, lab tests, etc. (Pretty standard fee, sadly). We are tracking all medical co pays, lab tests, expenses, etc. to see if we have enough to qualify for the medical tax deduction this year.
My hubby is also getting the "Snip" to avoid any more accidental babies, and we are moving the date of that procedure to this tax year, so we can potentially deduct those expenses as well.
The upside is we will also get a deduction for the baby this year as well.
We also replaced several old windows in hopes of getting the energy efficiency tax credit.
Overall, we are trying to be more diligent and organized. We haven't always been so in the past, and have probably ended up paying more than we should because of it. Let's face it. every penny counts now more than ever, so diligence is the safest route.
Since we just bought our first house and qualify for the tax credit and itemized deductions, we will officially stop withholding on our 2009 Federal taxes on our next paychecks. We might have a $1500 refund from the Feds next year, but we're aiming to get as much as that back in advance by adjusting withholding.
Since we live in California and have no idea what the current tax/deductions are or will be by the time we file, we're going to let our withholding stand and hope for the best.
Instead of changing your withholdings you can file a 2008 amended return and get your first-time homebuyer credit in about 6 weeks (even if you bought in 2009 you can take the credit in 2008). We bought a house in late April and this is what we did.
I am a recent grad who has had a hard time finding work after college so I try to concentrate on what I do have. I changed my withholding amount so that hopefully I don't receive much of a refund. I would rather pay a little extra each month on student loan payments then get a lump sum after I file my taxes. It doesn't make financial sense to be accumulating interest for my student loans while I am giving a free loan to the government. Since I live in Nebraska so I also have to pay state income tax but I am unsure if I can change how much they withhold. Does anyone have any ideas?
This is actually the first year where I won't be getting one. I worked at a work-study job and am now at an unpaid internship.
first year in 6 that I am not self-employed. Hopefully got the withholding right. I would rather pay a few hundred in April instead of getting back a few thousand of MY money. Check back in Feb and we'll see how I did...
Definitely going to get a refund this year. I've been paying the same taxes as last year, but furloughs have cut out 8% of my pay. I'm not sure I'm that happy about it.
How about this: if you can, eliminate withholding from your paycheck entirely. This would mean you are required to pay quarterly estimated taxes. It takes some willpower and discipline, but you can earn three month's worth of interest off that money before paying it to Uncle Sam. No tax refund, no interest free loan to the government.
I split my deductions throughout the year. I claim 0 for half the year and 1 for the other half. I should get something back, but it will be small.
I am expecting a nice tax refund this year. I like getting back a lump sum of money at the beginning of every year (EIC and over withholding). I pay off credit cards and do small home improvements. This year I installed energy star windows and a gas hot water heater, so I may be able to get more back. For me, it is easier this way than forcing myself to put the money into savings. A savings account is too easy to dip into when things get a little rough. Having the IRS hold it ensures that the cards and the house get taken care of. I prepare my taxes myself through turbotax online free file.
You must be kidding! We must pay on or before April 15 even though we claim 0 deductions/married but withhold at the higher single rate. I even considered having an additional dollar amount held out! Since an Insurance policy and Retirement account had to be cashed in to pay tax and other bills, this coming year will be worse. Also, with the "Incentive" less is being held out, so get ready to pay that back! Lots of Luck!
I own a small business, so my taxes are complex enough an accountant is worth the investment.
I do a midyear and third quarter tax projection, and adjust to have withheld just a tiny bit more than we owe.
Also, every month I put a designated amount into a savings account - which is eventually going to my retirement account, but would cover tax if it had to. At tax time (February), if I've estimated my withholding wrong, I take a little out of this account to pay the taxes. If not, it goes into an IRA, and I begin refilling the account.
It's sort of a multitasking way to save for retirement, provide myself a safety buffer for the taxes, and earn some interest on the money in the mean time.
I was taught that you want a big refund. Last year I adjusted my withholding and got more in my checks and less in a refund. It was kind of a bummer. I'm hoping for a refund this year. I use Turbo Tax (not the free one).
I have fed withholding set so that I owe/get back +/- ~$0.
State is a bit trickier, because I'm still consistently confused by NY state taxes, but I get back a little every year.
I almost always file during the beginning of Feb - as soon as I get a W2 and any other random forms. It also means that I pretty much always get any refunds by the end of the month.
Im glad not to live in California and be isssued an IOU insted of a refund , We try to make sure we are not getting a lot back, it just means our money is not available to work for us
Hobbies are tax deductible!! u can claim x-penses on your hobby..like that new computer you bought and were planning to create something artistic with...if u made no profits on your hobby u can claim it as a loss to deduct from your income. Taking of advantage of this loss is only allowed for 4 year in a row I believe (check w/accountant or irs).