Plans for your tax returns?

Treadmill, new flooring in my daughter's room and bathroom, new clothes and savings :) Oh and a HRM.

we expect a 5000, to 6,000 return. $700 goes toward paying y grandpa back for having him pay to fix my husbands car, $200 for an elliptical for me, a couple hundred to fix a few minor problems on my van like a belt and brakesthen $1000 in savings and the rest put toward my car payment to get it paid off as soon as possible so we can be car payment free by the end of 2012 and never ever get another car payment again

State return into savings. My half of the Fed return will get me new clothes, some new hiking, running, and fishing gear, an incline/decline bench. Maybe some new ink.

We will get ourselves closer to being DEBT FREE! 2012 will be our debt free year! 80k down 19k to go!

Make sure you scream it from the rooftops when you reach it. That's fantastic!

I'll be re-building our emergency fund, and catching up bills so in the future I can pay them on-time or early instead of at the end of the month.

Dave Ramsey fan huh?

Yep!

For those of us not getting bent over and screwed by Uncle Sam, what do you plan on doing with your tax refund?

I would consider having given Uncle Sam an interest-free loan all year "getting bent over and screwed" too.

you don't have to do it that way. Change your deductions...

Understood. It always cracks me up to see celebration about a big refund. one could adjust his deductions, and stow the money away in an interest-bearing account and come out with even more dough.

Regardless, the fact that only 53% of us pay taxes, and those that make more pay a higher percentage, is what really grinds my gears.

Just starting this thread so forgive me if this has been addressed.

Many people who get large tax refunds do so because of year end bonuses that are taxed higher at the time but reconfigure when doing your taxes. So it's not really a "year long interest free loan to the government." In most cases it's a 2-4 month loan to the government. With interest rates for savings accounts in the toilet the amount you'd have made is negligible at best. OTOH, if you owe the government more than $500 they charge you interest and penalties. I'd much rather play it safe and get a few hundred/thousand than cut it too close and end up owing even more.

Also, let's say someone reduces their withholdings so they keep an extra $10/week. At the end of the year that's $520 less refund they get. If thy keep it at $10/week they'll probably have absolutely nothing to show for it at the end of the year. If they take it as a lump refund then they can put it into an IRA or pay down debt (that they probably would have only increased with that $10/week) or do some sort of home improvement.

A large amount refunded or due equals bad planning.

Not so true, I own an Income Tax Office, Client can work and earn about 10k have a few babies and pay ZERO in to the Federal Government and get about a $9000.00 refund.. I see it hundreds of time every year...So did they badly plan?

You want to do my taxes? I could use a $9k refund...ha ha ha.

I also do taxes. Last year the best refund I got a client was $40,000. No, that's not a typo. Yes, I did have a talk with them about adjusting their withholdings. In their defense, they were working overseas so they got the foreign tax credit for each of them and they thought it was a total, not a total for each of them that was allowed.

It will all go towards my husbands student loans. Trying to get them paid off since my payments start in January and it will knock us down to the 1 loan payment.

A large amount refunded or due equals bad planning.

Not so true, I own an Income Tax Office, Client can work and earn about 10k have a few babies and pay ZERO in to the Federal Government and get about a $9000.00 refund.. I see it hundreds of time every year...So did they badly plan?

You want to do my taxes? I could use a $9k refund...ha ha ha.

I also do taxes. Last year the best refund I got a client was $40,000. No, that's not a typo. Yes, I did have a talk with them about adjusting their withholdings. In their defense, they were working overseas so they got the foreign tax credit for each of them and they thought it was a total, not a total for each of them that was allowed.

If they would have planned better they wouldn't have got such a big refund and improved their monthly cash flow. Talking to an accountant about the implications of working on foreign soil would have benefited them.

Yes, that's why they talked with me. They really didn't need the cash flow. Obviously someone getting a $40,000 refund is more than financially solvent, especially when they are working overseas and had no expenses. They were a unique situation but it's not at all uncommon for my ex-pat clients to get refunds that would buy them a decent brand new car. That was just the only one that would buy a decent new luxury car.

Again though, it's a matter of how much you make. For some of those people a refund that most people would consider obscenely large and a waste of interest was really only "on loan" to the government for a few weeks/months tops. It wasn't a year long loan. They didn't start to overpay until Nov/Dec and if I file their taxes in Jan/Feb they weren't without the money for much time at all.

Treating myself to a 25th birthday vacation in the Caribbean!!!

Pay off student loans!