Poll: Tax Refunds

jf198400 · April 2014

Are you getting a refund this year or do you owe Uncle Sam money? If you are getting a refund, are you doing anything fun with the money?

Last year between DHs bonus and our refund we took a trip to Jamaica. But this year we are being practical, boo. Our money is paying off our granite countertops and one of my student loans.

Nita14701 · April 2014

Very small refund- we're putting into a savings account for LO. Very boring I know but I'd like for her to be in a better situation for paying for college than I was.

jf198400 · April 2014

I have to adjust my withholding too, or we will actually owe money next year. Damn marriage penalty.

*sparky* · April 2014

We owe too. Sadly, I was excited this year because we owe less than $1,000. The last few years I have had to write a check for over $10,000.

jc&cat · April 2014

federal refund! getting a new driveway since ours in sinking. i could think of about 3000 or so fun things i would rather do with it though...

Ridgebackmom · April 2014

We didn't get much back b/c we don't own our own home AND we use the DC reimbursement. We saved a little of it for our vaca in a couple weeks. My friend got like 6k back (no kids, own home) I was so depressed to hear that. We didn't pay ANYTHING off, it just went into account for bills etc.
We owed a little bit abd we had to pay for Tax Act or whatever we used. Darn it!!!

jlaOK · April 2014

We got a little bit back and it just went into savings.

We always try to get back as little as possible w/o having to owe but we got more back this year because of DD being born. Is the only way to have less taken out to adjust dependents? I hate having to find that magic number of withholding enough not to owe but not getting a huge refund.

jf198400 · April 2014

jlaOK said:
We got a little bit back and it just went into savings.

We always try to get back as little as possible w/o having to owe but we got more back this year because of DD being born. Is the only way to have less taken out to adjust dependents? I hate having to find that magic number of withholding enough not to owe but not getting a huge refund.

Have you tried the IRS withholding calculator?

Pips09 · April 2014

We owe. We try to break even, but I'd rather owe a little than get a refund. (But I'd rather get a refund than owe a lot!)

mae0111 · April 2014

We owe. A ton. DH withheld at the rate recommended by our accountant, and my entire cash bonus is going to pay our federal taxes. When we asked her what went wrong, she told us she based our withholding on scenarios that we never discussed and were absolutely off the wall.

Can you tell I'm pissed? Time for a new accountant...

kmh2201 · April 2014

We did get a refund. It is going towards paying off the loan we took from DH's 401k to cover the loss from the sale of our old house almost 3 years ago. That will get paid off this month or next month. DH's paycheck loan deduction is almost $200 per check, so I'm really looking forward to getting it paid off!

mexicolombiana · April 2014

tas1883 said:

I have a wash. I owe the federal the same amount as I owe the state. I did bad tax planning in December but then I wasn't expecting over a $3000 capital gain distribution from my H's investments that got reinvested on 12/31. We haven't had one of those in a few years. I try and get it so we get a couple hundred back each year.

I take our tax liability at the end of the year and keep an eye on our pay-stubs year to date total to see that what we owed last year is equal to what we are taking out in the current year and do a projection. You can always look at the tax tables and see how much more $ will come out each check if you add or subtract a dependent and then multiply that by the number of pay periods to see if it will help or hurt you by changing your W4.

You are smart. This is what everyone should do. People with more complicated tax situations like owning multiple buildings, or owning businesses can't exactly do this, but if you're normal W2 employees it's not too hard to do this.

I'm a bankruptcy lawyer and it's surprising how many people just don't understand how income taxes work. I had a woman complaining about taxes in general one day to me, and I looked at her tax returns for 2 years and she doesn't even PAY taxes. Her AGI is so low and then w/all her deductions her tax liability is ZERO. So her big fat tax refund consists of her $5,000 SHE put in herself form her w/holdings plus some more credits from the gov. I explained this to her and told her she absolutely does not have to w/hold fed. taxes from her paycheck and she still didn't understand.

Anyway we're getting a ridiculously high refund this year due to my husband selling off a condo and a big loss that we did not anticipate. We stupidly w/held fed. taxes and we're getting it all back. I admit it was dumb but we didn't know. Next year we'll be taxed a little more normally and we probably won't get much of a refund.

Since I just went part time at my job I've really been worried about money so I'm sticking in savings and trying not to spend it. We are going to Disney World though!

mlee116 · April 2014

Yep, we got a refund this year. Coincidentally, the same week we also received the hospital bill for having tubes put in DS's ears, so we forked over the refund. Kinda sucked not getting to spend it on fun stuff, but they did shave off about $200 since we paid it in full.

Yay for being fiscally responsible

ImJessesGirl · April 2014

Because I was not married in 2013, I filed single with one dependent. Therefore, I got money back.

This year, I invested into starting up my own makeup business. I now will do makeup for proms, weddings, photo shoots, etc.

djm31012 · April 2014

kdc2007 said:

no refund. we owe. (

this. in fact...i cant remember the last time i got a refund. UGH.

itsmevkb · April 2014

We are getting a small refund which will go to help us pay to hopefully do a frozen embryo transfer this summer

rubber_chicken · April 2014

You ladies are all so smart! I feel embarrassed now - we are NOT fiscally savvy at all. DH and I are both "spenders" - we have to trick ourselves into saving.

We get our tax refund and my bonus within a few weeks of each other - it goes into savings. We do dip in during the year, to buy heating oil, pay for unexpected bills etc. But at the end of the year we'll have put more in than we've taken out. It's slowly growing.

This year we did the same, but we spent half the tax refund on paying off my student loans, and half my bonus on paying off DD's medical bills. On the one hand, I feel really nervous that we put so little into savings - what if we have a huge emergency this year?! On the other, I feel a huge weight lifted having those bills paid off!

jf198400 · April 2014

itsmevkb said:
We are getting a small refund which will go to help us pay to hopefully do a frozen embryo transfer this summer

@itsmevkb‌ wow you are going for baby #5!?! Can't decide if you are brave or crazy haha, that's awesome.

jlaOK · April 2014

jf198400 said:

We got a little bit back and it just went into savings.

We always try to get back as little as possible w/o having to owe but we got more back this year because of DD being born. Is the only way to have less taken out to adjust dependents? I hate having to find that magic number of withholding enough not to owe but not getting a huge refund.
Have you tried the IRS withholding calculator?

I just tried it and got some errors but will look at it again when I have more time.

CarrieB. · April 2014

We are getting a large (for us) refund this year. I feel like the government is saying that we don't make enough money to have two kids, but whatever I adjusted my withholdings after baby #2 was born in November. Money is going into savings for some as yet to be determined house projects.

Question- do bonuses get treated differently than regular income for tax purposes? I got 2 bonuses this year and I don't know if this played into our refund.

mae0111 · April 2014

Estwd2 said:

Refund. I've never owed. I actually don't really understand taxes or investments at all. Is it common for people to owe? Do you plan it that way because there's some kind of benefit or is it more of a "Damn it" moment when you realize you owe? (I realize that's probably a really complicated question and that I'm revealing just how clueless I am about this subject. All my sorries.)

I don't think it's common for people to owe. We tried to plan it so that we'd get as close to owing/getting nothing, and failed. For us, it's a bit harder to just use the IRS withholding calculator due to rental property, equity compensation for both DH and I (but our companies handle it very differently), etc. Which is why we relied on our accountant to estimate it for us. And she failed. Miserably. This, coupled with other big IRS issues that she indirectly caused, are forcing us to look for a new tax professional.

ss265 · April 2014

We have owed every single year except for maybe 2 years ago when we got a refund. I even owed when I was single because I didn't do my w4 correctly. Luckily we keep the owe amount low enough that we have yet to pay a penalty. It has been difficult to plan our taxes because one of us has always had a salary change in the last few years. I am hopeful that we will actually get a refund next year or owe less because we will have 2 dependants to claim and I have to go out on STD while on maternity leave which should reduce our taxes.

emberlee3 · April 2014

We got a little back. I'll use it to put toward paying off student loans.

oughtonk · April 2014

We always end up paying....Uncle Sam must like our money way to much to let us actually spend it. Hopefully next year will be the year we finally get money back.

Tink112011 · April 2014

We received a small refund. DH keeps an eye on it though, and we adjust our withholdings when necessary. It's nice to get a little bit of extra cash back, but not the windfall that others talk about.

I think we put it toward our mortgage. Or in savings. I really don't know. We never do anything exciting with it and DH makes all those minor decisions about our finances.

itsmevkb · April 2014

jf198400 said:

We are getting a small refund which will go to help us pay to hopefully do a frozen embryo transfer this summer
@itsmevkb‌ wow you are going for baby #5!?! Can't decide if you are brave or crazy haha, that's awesome.

@jf198400 A little bit crazy and whole lotta Catholic guilt. Ha!

mexicolombiana · April 2014

Estwd2 said:

Refund. I've never owed. I actually don't really understand taxes or investments at all. Is it common for people to owe? Do you plan it that way because there's some kind of benefit or is it more of a "Damn it" moment when you realize you owe? (I realize that's probably a really complicated question and that I'm revealing just how clueless I am about this subject. All my sorries.)

So essentially the way your tax return "works" is this.

You report your wages and all income first.

So say you make $40,000 per year.

Then you get some deductions (business losses, student loan interest and other stuff found on page 1 of your return)

Then that equals your AGI.

You then take your AGI and you take all your deductions (or you take the standard deduction)

then you take some exemption # based on your household size.

That gives you your taxable income. So if you made $40,000 you could be down to like $22,000 or less by the time you get to that line.

Then you get taxed on JUST that amount of $. You aren't taxed on your wages.

Then you might have some credits.

Then on line 61 for most returns is your TOTAL TAX. This the amount that in a perfect world you should be withholding from your paychecks.

Most people w/hold WAY the heck more cuz they just don't know what their total tax will be. But some people get taxed about the same from the IRS every year. Check your "TOTAL TAX" number for the last 3 years of taxes and see where you're at.

Your refund is simply what you withheld less your total tax PLUS some credits like the Earned Income Credit or Child Tax Credit if applicable.

So you should never be getting back what YOU withheld. (in a perfect world) but it would be fine to get a refund consisting of just credits the IRS decides you're entitled to.

I have to do this planning with ALL my clients.

ASmallWonder · April 2014

We bought a snowblower and a new grill and are taking the boys to Sesame Place.

jesuisfatiguee · April 2014

I'm getting a refund and am stoked to pay down some bills!

rubber_chicken · April 2014

K3am said:

@rubber_chicken, if you're not paying down your student loans, won't you have more to put into your savings? We've always used eliminating a payment as forced savings. When we finished paying off my car, we continued making "car payments" to our savings account - our lifestyle wasn't effected at all, but we were essentially saving an extra $500 a month.

That's what smart people do. People like me end up spending the extra $500 a month on god knows what. It's embarrassing but I can't trust myself with money. I have to basically hide it from myself.

MereDe3 · April 2014

We owe.

laurakaz13 · April 2014

Huge refund and we are saving and putting some of it into two vacations.

jjdillie · April 2014

I got a pretty big refund. DS was born last year and the w4 form confused the crap out of me. I changed it this year so next year shouldn't be a big refund. I put the money in savings for now. I'm having some work done on my house so that's where part of the money will go.

[Deleted User] · April 2014

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jess9802 · April 2014

We got money back on federal. We owed slightly more on state than the amount of our federal refund.

MaggieF516 · April 2014

I'm getting $7500 back from state and federal. So excited. I'm beginning to think H&R did it wrong as it seems like a lot. I was claiming zero but I got to claim my son this year (his father did last year) so that really helped. I like claiming zero and having less in my paycheck and getting a refund at the end of the year. I would just spend it if it was more in my paycheck so it's kind of a way to save.

rockychryslerb2010 · April 2014

We are ending up about even - owe a huge amount to federal (most of this is payroll taxes from having a nanny) and are getting a small refund from one state we have to file in and a large refund from the second state. I've done all our taxes the last few years, but I think this was the last year. It was simple when I first started doing it, but now our financial situation is more complicated with our incomes, investments, having an employee, etc.

SoMoNY · April 2014

Getting about $5k back between fed and state, will likely throw it in bank for when we gut the kitchen in 2015.

KayteeGee · April 2014

We got a big old refund this year because of a loss we took on a rental property that we sold (hallelujah!!!!)
Typically we try to net zero (we have no state income tax) and come pretty close thanks to a REALLY awesome accountant.
I would never be able to figure out our tax situation, so I feel for the PP whose accountant botched hers... seriously, I feel sick even thinking about it.
Our refund will go into savings. But I am also getting a new car in the next few weeks and I think we have decided to finance instead of paying cash due to interest reasons ... So really, I feel like it's ultimately going to the new car.

mexicolombiana · April 2014

KayteeGee said:

We got a big old refund this year because of a loss we took on a rental property that we sold (hallelujah!!!!)
Typically we try to net zero (we have no state income tax) and come pretty close thanks to a REALLY awesome accountant.
I would never be able to figure out our tax situation, so I feel for the PP whose accountant botched hers... seriously, I feel sick even thinking about it.
Our refund will go into savings. But I am also getting a new car in the next few weeks and I think we have decided to finance instead of paying cash due to interest reasons ... So really, I feel like it's ultimately going to the new car.

That's exactly what happened to us. My husband finally sold a stupid condo he bought like a genius during the collapse of the real estate market. I've hated that condo because we had to rent it out at a loss for years and I had to run the Condo Association and file the annual reports and tax returns, and maintain insurance on the building. It was awful.

He owed about $170 on it and he sold it for something ridiculous like $40K so we had a huge loss on our taxes and had a negative AGI, hence the ridiculous refund we are getting this year too.

aibrean · April 2014

We got a nice amount back, but we owe around $1000 to the city. I do freelance so I have extra taken out just in case and last year with having the baby I didn't have time to freelance much.

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