How Much of Tax Refund Do You Save/Spend..??
- Cautious Optimist
- Posts: 69
- Joined: Mon Jun 03, 2013 4:32 pm
How Much of Tax Refund Do You Save/Spend..??
I'm happy to be getting a refund but disappointed I can't invest it all.
- About 35% will be invested (replenishing EF)
- About 50% is paying costs of a professional conference slash mini-getaway (conference, airfare, hotel, expenses)
- The remainder will be spent on stuff I need (shoes, clothes, etc.)
For those getting a refund how will you allocate it in terms of saving and spending/paying debt..??
(For those who owe, sorry)
- About 35% will be invested (replenishing EF)
- About 50% is paying costs of a professional conference slash mini-getaway (conference, airfare, hotel, expenses)
- The remainder will be spent on stuff I need (shoes, clothes, etc.)
For those getting a refund how will you allocate it in terms of saving and spending/paying debt..??
(For those who owe, sorry)
Re: How Much of Tax Refund Do You Save/Spend..??
I've never been good at tweaking withholding to end up at a near break-even point, so I do end up with a refund. I don't allocate it to anything in particular, it all goes into savings.
Re: How Much of Tax Refund Do You Save/Spend..??
How much would this be worth had you not over withheld?Cautious Optimist wrote:- About 35% will be invested (replenishing EF)
I always wanted to be a procrastinator.
Re: How Much of Tax Refund Do You Save/Spend..??
I'll use this year's refund ($3,170) to pay for my recent vacation to Costa Rica....
Re: How Much of Tax Refund Do You Save/Spend..??
Leaders, good morning/afternoon/evening
Good conversation.
The few times we have received a refund we have saved/invested all. Now, I can't remember the last time our family received a refund, that happened too many moons ago.
Thanks for reading.
Good conversation.
The few times we have received a refund we have saved/invested all. Now, I can't remember the last time our family received a refund, that happened too many moons ago.
Thanks for reading.
~ Member of the Active Retired Force since 2014 ~
Re: How Much of Tax Refund Do You Save/Spend..??
I honestly can't remember the last time I received a significant refund. I have considered overpaying, so I could purchase a $5K Ibond, but I just cant bring my self to give uncle Sam an interest free loan
If past history was all that is needed to play the game of money, the richest people would be librarians.
Re: How Much of Tax Refund Do You Save/Spend..??
We just treat it like a normal pay, which is into savings, with extra at the end of the month to the mortgage. $203 this year, we owed last year.
Re: How Much of Tax Refund Do You Save/Spend..??
With interest rates on savings so low, generally less than 1%, I don't mind overwithholding for now. So I lose maybe $20 bucks, or about $15 after taxes. I look at it as forced savings and money that if I otherwise had, I would probably end up spending it. I look forward to the yearly refunds while interest rates are so low.jvclark02 wrote:I honestly can't remember the last time I received a significant refund. I have considered overpaying, so I could purchase a $5K Ibond, but I just cant bring my self to give uncle Sam an interest free loan
Re: How Much of Tax Refund Do You Save/Spend..??
Not a big refund (relative to income), but every cent going toward debt reduction.
cheers ... -Mark |
"Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau |
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- englishgirl
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Re: How Much of Tax Refund Do You Save/Spend..??
I haven't finished my taxes yet, but I think that I will get a refund this year. Last year I owed, and made estimated tax payments this year, but my income dropped so I think I pretty much get the estimated payments back again. It's all already mentally spent - there are some home repair/improvement projects I have been putting it off that I will gladly put a tax refund to. If the two projects that are most urgent miraculously don't take all of the refund (actually, I expect that to do them both will be more than I think I will get back), then I'd put extra into my EF.
Sarah
Re: How Much of Tax Refund Do You Save/Spend..??
This year, I'll probably spend most of it on a vacation to Thailand.
Re: How Much of Tax Refund Do You Save/Spend..??
I plan to use my refunds toward a down payment for a condo, as I tiptoe through the perils of home ownership after having been a lifelong renter.
Gordon
Re: How Much of Tax Refund Do You Save/Spend..??
I will probably spend 100% of it on a bottle of wine.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
- pennstater2005
- Posts: 2509
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Re: How Much of Tax Refund Do You Save/Spend..??
I'll save mine, I mean ours.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
Re: How Much of Tax Refund Do You Save/Spend..??
I self-escrow for the IRS, property tax and condo and car insurance within an Ally MM account which is also an emergency catch all account kept at 3-4% of portfolio (I'm retired). When the account is over a certain threshold the overage is used for trip money. I try and project all of them a year in advance and monthly escrow what is needed + a margin for error. IRS refunds go back in.
EDIT NOTE: I use the IRS EFTPS system and use Turbo Tax Estimates near the end of the year to adjust the last payment (January 15th) to keep the overage as close to zero as I can practically get it.
EDIT NOTE: I use the IRS EFTPS system and use Turbo Tax Estimates near the end of the year to adjust the last payment (January 15th) to keep the overage as close to zero as I can practically get it.
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Re: How Much of Tax Refund Do You Save/Spend..??
Money is fungible so I won't treat this any differently so any refund will go into the bank and be used or invested as the need arises.
Re: How Much of Tax Refund Do You Save/Spend..??
Exactly. Mine goes into my checking account, as does my social security and my pension. When I buy groceries, which money did I spend? I know, I spent my tax refund on groceries. Now it is up to you to have faith and believe.placeholder wrote:Money is fungible so I won't treat this any differently so any refund will go into the bank and be used or invested as the need arises.
Re: How Much of Tax Refund Do You Save/Spend..??
I will probably invest the bulk this year. I have some lofty saving goals for 2014, will probably need every penny I can find to meet.
Re: How Much of Tax Refund Do You Save/Spend..??
In my twenties, I thought it was free money. That was 40 years ago.
placeholder wrote:Money is fungible so I won't treat this any differently
Re: How Much of Tax Refund Do You Save/Spend..??
I save all of it or it pays down debt. I got a sizable refund accidentally. I took the correct amount of deductions, but my credits added up to too much. I might take an extra deduction on my W4 this year to balance it out. The refund is a little over $1300. I'll use it to get a jump start on next year's Roth, or put it in the vacation fund and shorten my monthly contribution.
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Re: How Much of Tax Refund Do You Save/Spend..??
It's not a big refund but it will be 100% invested until I need to spend it.
Re: How Much of Tax Refund Do You Save/Spend..??
Well, this year I ended up owing a couple hundred bucks, so no refund to spend.
Normally, I use it towards debt reduction.
Normally, I use it towards debt reduction.
Re: How Much of Tax Refund Do You Save/Spend..??
This thread reminds me of one of my favorite words...."intaxification." Defined as the euforia one feels on the receipt of a tax refund, only to be followed by the hangover of realizing it was your money to begin with.
Re: How Much of Tax Refund Do You Save/Spend..??
Love it!92irish wrote:This thread reminds me of one of my favorite words...."intaxification." Defined as the euforia one feels on the receipt of a tax refund, only to be followed by the hangover of realizing it was your money to begin with.
- Clever_Username
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Re: How Much of Tax Refund Do You Save/Spend..??
I'm getting $1500 back. Consequences of five income streams -- I didn't get withholding just right. Hopefully I'll get less from my 2014 taxes.
It's all going into my portfolio as per my AA.
It's all going into my portfolio as per my AA.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ |
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- tuningfork
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Re: How Much of Tax Refund Do You Save/Spend..??
My 2013 tax refund will go toward my first quarter 2014 estimated tax payment.
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Re: How Much of Tax Refund Do You Save/Spend..??
Because I have no taxes withheld any more (not since 2008 when I early retired), I never overpay my estimated taxes just to get a refund. Before that, I still rarely ever got a refund because of my investment income which had zero taxes withheld.
About 10 years ago I had accidentally erred in a pair of estimated tax payments to my home state (NY) and the state I worked in (NJ) and filed a non-resident tax return. I paid NY too much and NJ too little which had me owing more than I expected to NJ and getting a refund from NY On the federal side, I last got a refund for my 2001 taxes because my investment income was nearly nothing following a bad year in the markets. But the same week I got the federal refund, I wrote a check to NY to pay some taxes owed. Those amounts were nearly the same (just under $200) so for me that is where the federal refund went.
About 10 years ago I had accidentally erred in a pair of estimated tax payments to my home state (NY) and the state I worked in (NJ) and filed a non-resident tax return. I paid NY too much and NJ too little which had me owing more than I expected to NJ and getting a refund from NY On the federal side, I last got a refund for my 2001 taxes because my investment income was nearly nothing following a bad year in the markets. But the same week I got the federal refund, I wrote a check to NY to pay some taxes owed. Those amounts were nearly the same (just under $200) so for me that is where the federal refund went.
Re: How Much of Tax Refund Do You Save/Spend..??
Ok, I am a little envious
I am in a salaried job, but my spouse and I owe just under $6k. Looking to start withholding more taxes after half of 2014!
I am in a salaried job, but my spouse and I owe just under $6k. Looking to start withholding more taxes after half of 2014!
Re: How Much of Tax Refund Do You Save/Spend..??
My refund this year is going toward building the emergency fund back up, after having to replace the roof last year. No sexy investing or spending for me.
Next year, or for this tax year, I'm hoping to get no or a very minimal tax return. I have received fairly large returns the past couple years and now made some adjustments so the gov't doesn't hold my money for me until March.
Next year, or for this tax year, I'm hoping to get no or a very minimal tax return. I have received fairly large returns the past couple years and now made some adjustments so the gov't doesn't hold my money for me until March.
Re: How Much of Tax Refund Do You Save/Spend..??
Funny, I'm so stealing that word!92irish wrote:This thread reminds me of one of my favorite words...."intaxification." Defined as the euforia one feels on the receipt of a tax refund, only to be followed by the hangover of realizing it was your money to begin with.
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Re: How Much of Tax Refund Do You Save/Spend..??
EFTPS out of Vanguard MM, direct deposit in, simple.
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Re: How Much of Tax Refund Do You Save/Spend..??
This year, I'm getting an iBond with some of my fed refund. I think the remaining amount will go to snowmobile repairs.
One year in particular, everything lined up and we bought a boat. Right around the beginning of March, I received my quarterly bonus, yearly profit sharing, a bounty for bringing someone into the company, a patent filing award and my tax refund.
4 years later, I sold the boat to regain half of my original purchase. We figured out that my family isn't really a boat family.
One year in particular, everything lined up and we bought a boat. Right around the beginning of March, I received my quarterly bonus, yearly profit sharing, a bounty for bringing someone into the company, a patent filing award and my tax refund.
4 years later, I sold the boat to regain half of my original purchase. We figured out that my family isn't really a boat family.
Bogle: Smart Beta is stupid
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Re: How Much of Tax Refund Do You Save/Spend..??
My overpayment just goes to reduce my payment due for that quarter so I never see any money back. I can't imagine spending my tax refund.
364
Re: How Much of Tax Refund Do You Save/Spend..??
we overpaid on the taxes when we converted a TIRA to Roth, so we are getting back a large amount. I split it with my wife and will use my share to pay off car note about 18 months early.
Marty
Marty
Re: How Much of Tax Refund Do You Save/Spend..??
I try not to over-withhold, so if I get a refund, it amounts to <1% of my income. It gets deposited in the checking account to pay bills. Nothing special.
Re: How Much of Tax Refund Do You Save/Spend..??
My refund this year was fairly large due to overpaying social security (switched jobs midway through the year in 2013).
It will be used to pay for my sister's tuition for summer college classes.
In that sense I guess it is an investment of sorts, though someone else will be enjoying the returns
If I were to keep it for myself it would be 100% invested.
It will be used to pay for my sister's tuition for summer college classes.
In that sense I guess it is an investment of sorts, though someone else will be enjoying the returns
If I were to keep it for myself it would be 100% invested.
Re: How Much of Tax Refund Do You Save/Spend..??
I created a $5,000 refund so that I could spend it on $5,000 of paper I bonds.
NightOwl
NightOwl
"Volatility provokes the constant dread that some investors know more than we do, making us fearful of ignoring such powerful price movements." |
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Re: How Much of Tax Refund Do You Save/Spend..??
We have 3 kids in college.
Guess where the refund is going.
Guess where the refund is going.
Re: How Much of Tax Refund Do You Save/Spend..??
Our refund (plus a little extra to max out) went into this year's IRAs.
"Ritter, Tod und Teufel"
Re: How Much of Tax Refund Do You Save/Spend..??
We pay every year. Never get a refund...
One of my favorite scenes from the movies comes from "Date Night" (a REALLY bad movie other than the scene I'm about to describe)
Two 20-somethings getting their taxes done
Accountant: You'll be getting a $2000 return this year. You might want to consider opening an IRA. Investing that money conservatively over the next 30 years could really make a big difference for your retirement.
Girl 20-something: Or we could go to Cancun, and have sex on the beach!
Guy 20-something: I choose that.
One of my favorite scenes from the movies comes from "Date Night" (a REALLY bad movie other than the scene I'm about to describe)
Two 20-somethings getting their taxes done
Accountant: You'll be getting a $2000 return this year. You might want to consider opening an IRA. Investing that money conservatively over the next 30 years could really make a big difference for your retirement.
Girl 20-something: Or we could go to Cancun, and have sex on the beach!
Guy 20-something: I choose that.
- dratkinson
- Posts: 6116
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Re: How Much of Tax Refund Do You Save/Spend..??
I bonds.
I did a draft fed return to know how much money to send in with my extension.
I did a draft fed return to know how much money to send in with my extension.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
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Re: How Much of Tax Refund Do You Save/Spend..??
Ours goes straight to the property tax fund. Tax refund goes to first half, and I save up some of my side money for the second half.
Re: How Much of Tax Refund Do You Save/Spend..??
What is a tax refund? I have been converting $20K per year from tIRA to Roth IRA with no withholding in the amount converted. Bumped other withholding on SS and pension to compensate but apparently not enough. Close though, only owe about a grand to the IRS.
Best Wishes, SpringMan
- bertilak
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Re: How Much of Tax Refund Do You Save/Spend..??
Well, what would you have spent it on if it wasn't withheld to begin with? The IRS just borrowed it from you for a while and didn't even pay you any interest.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Re: How Much of Tax Refund Do You Save/Spend..??
I bonds
New bed and night stands which are already ordered
New bed and night stands which are already ordered
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Re: How Much of Tax Refund Do You Save/Spend..??
What tax refund? I prefer not to give an interest free loan to anyone, including Uncle Sam.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: How Much of Tax Refund Do You Save/Spend..??
I stuck my $3K federal tax refund in my Ally online savings to be spent later on in the year.
Last edited by mickeyd on Sun Mar 02, 2014 6:26 pm, edited 1 time in total.
Part-Owner of Texas |
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“The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
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Re: How Much of Tax Refund Do You Save/Spend..??
Why would I want a refund? A refund means there was something wrong with my tax planning which needs to be corrected.
Refunds are for taxpayers who cannot figure out how the tax law works.
Refunds are for taxpayers who cannot figure out how the tax law works.
Re: How Much of Tax Refund Do You Save/Spend..??
manwithnoname wrote:Why would I want a refund? A refund means there was something wrong with my tax planning which needs to be corrected.
Refunds are for taxpayers who cannot figure out how the tax law works.
I used to say that too, but when they insist on sending you money it's difficult to turn down.
Part-Owner of Texas |
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“The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle