gigantic tax refunds

NicB

I was reading this post on the money board and was shocked at some of the refund amounts people have.  We have a tax guy do our return so i feel confident that they are being done correctly...,

 

We have a house with a mortgage and a rental property that loses money each month and both claim 0 and married even though we have 1 kid and we still tend to get less than $1,000 on a refund (I know I know, why let the govt earn interest on our money, but i liked the "forced" savings and getitng money back in february.)

Some of these people have 5,000 to 10,000 returns!  Holey smokes.  I want that kind of refund! When I was single I would get about 2,000 back and I would use that money for an all inclusive vacation somewhere warm.  Then we got married and my 2,000 refund stopped turning into anything fun.

MCromwell

We're getting almost 4k back- but the only reason is because I got a 2k "credit" for having something like 15k in NEW government school loans in 2011. Yay for the short term, bad for the long term.

We're not doing anything fun with it, just dropping it in savings. 2011 hit our pocketbooks HARD (dead car, new car, vet bills, fridge explosion, new fridge, dead cat, new cat, sick cat, vet bills. ) 

WonderRed

I haven't gotten a tax refund since 2003.

DruidPrincess

Yeah, we average between $3K and $5K per year.  We usually use $1K on expenses which have accrued (medical, etc), and the rest goes to paying stuff down.

sara_c

Ifyou like the forced savings, why not set up automatic savings on paydays?  Same thing, but it earns interest and you can access it whenever you need it.

 Really, it's bad to have high refunds.  Especially if you have credit cards and such.  You are paying interest on those cards and gaining nothing on the money the government is holding for you.

swinsto3

We average $3-5k too. Ours has typically been split between paying things down and savings. I just use Turbo Tax and do it myself - we actually get more that way then we did when we paid someone, mostly because I think he was super old school and Turbo Tax walks you though every possibility.

azuremama

It's so much better to have small refunds!  A big one just means you've been paying too much all year long.  I like Sara's idea of putting money away each pay period so you can have it at the end instead of the interest free loan to the govt.!

RyanandManda

In 2010, we moved, I changed jobs, then lost said job, had a baby, gave to charity (a lot), and paid student loan interest and we OWED MONEY!!!  This year, with me not working all year, we're getting about 1k back.  I don't want a huge refund because I know that it's money I could be saving or putting toward debt all year long but I couldn't believe that we owed last year!!  

sam&val

Getting a big refund really isn't a good thing. It means you gave the government an interest free lain throughout the year. The goal should be getting as close to breaking even as possible. Granted, we have no kids, no student loans, no mortgage, but this year we got a $53 federal refund. I was happy with that because we didn't owe!

whitdog23

azuremama:

It's so much better to have small refunds!  A big one just means you've been paying too much all year long.  I like Sara's idea of putting money away each pay period so you can have it at the end instead of the interest free loan to the govt.!

This. Big refunds are not a good thing.  DH and I both claim 0 and both have extra money withheld each paycheck and we still barely get a refund.  You can go on the IRS website and calculate what you should claim and withhold to have whatever result you want but remember that big refund = giving the government an interest free loan all year.

taratru

I guess I'm in the minority in that loaning my government money doesn't really bother me. We are horrible at saving, so I'd rather give it to the treasury to hold for me and them use it in February to pay down debt. We got about $7k back this year-we have 3 kids, 2 mortgages and student loans. 

ELCJet

We were guilty of the ginormous refund this year.  And honestly, my 401K and other investments are performing well enough that I seriously regret that I gave the government that much money!  So be proud of your small refund -- it means you are getting it right.

My problem is that the withholding calculator doesn't seem to work for me!  It says we should be paying IN extra every month....which is crap.  So I just give up and am too afraid to change anything because I don't want to have to pay in. 

DownToEarthGirl

taratru:

I guess I'm in the minority in that loaning my government money doesn't really bother me. 

I'm with Taratru - I don't mind loan money to the government - in fact, I think I should be taxed more (as should everyone earning similar to me and above). 

I don't know our tax situation this year, but we usually get around $2-3k back.  It should be interesting considering I have income taxes in two states for both DH and I, student loans, moving expenses, childcare costs, rental income and loss, mortgage interest, etc. 

Interesting that someone said Turbo Tax might find more deductions than an accountant...an accountant acquaintance told me the same thing the other day.  She said that Turbo Tax is better if you're not paying upwards of $500 to have your taxes done for you b/c it's not worth the accountant's time to spend finding everything for you.  However, she was a little tipsy and also said that she primarily does business taxes, not personal. 

smilelari

We tend to get a pretty big refund.  Between losing $300 per month on our rental, having 2 kids, spending $$$ on daycare and DH being a full time student it's hard not to.