Comments on: 3 Reasons why Tax Refunds are Bad & how Allowances can Help

By: torg

torg — Mon, 28 Sep 2009 17:16:32 +0000

Means if not to do overpayment that return it is unnecessary better really this money to invest

By: Hoa Binh

Hoa Binh — Fri, 18 Sep 2009 18:47:25 +0000

Thanks for your information I agree with Andrew… I think that most people will not save with weekly or biweekly checks, instead prefer geting a thousand or so check in march or April over $40 dollars extra a week… Bui Thi Xuan, Marie Curie, Nghe Nhin, Article Directory,

By: Cj

Cj — Fri, 27 Mar 2009 19:50:28 +0000

Just completed our joint tax filing and ended up owing the Feds about $1700. I was claiming 2 and my husband was claiming zero and we still had to pay. We have a daughter in college and are filing for divorce this year. My income is about $80-$85k. Any suggestions on what I should set my tax allowance for this year??

By: CJEH

CJEH — Fri, 06 Feb 2009 21:27:44 +0000

We’ve always gotten a large tax return, have never owed taxes, and we’d like to start having that money coming in during the year, but the numbers I get off the IRS calculator seem pretty unbelievable.
After plugging in my cottage-industry income (less than $1000/year), my husband’s salary (about 75k), kids, mortgage interest, FSA, 401k, ect… the IRS wants us to take *20* allowances!

Now, I know they’d much rather us pay, then them owe us money, but that seems pretty crazy. How can I find out where a safe line is? How much money will end up in our checks per allowance anyhow?

By: sheehan

sheehan — Thu, 01 Jan 2009 19:26:54 +0000

receiving a tax refund is better than owing money to the government. most people don’t have $2K to just pony up at any given amount of time. this eventually leads to fees, debt and what not.

By: G.E. Miller

G.E. Miller — Thu, 02 Oct 2008 22:36:04 +0000

@ William – The problem is that people tend to view a refund as ‘bonus’ money that should be spent as a reward. If they were to get an extra $40 per week I would think that they would tend to value it more as hard earned income and work it into their monthly cash inflow/outflow. Anyone have data on the percentage of people that spend all of their refund?

By: William

William — Thu, 02 Oct 2008 16:21:57 +0000

I agree with Andrew…
I think that most people will not save with weekly or biweekly checks, instead prefer geting a thousand or so check in march or April over $40 dollars extra a week…
If you are already leaving on that budget or schedule, I suggest keeping it that way, because it is more likely that you are going to spend it as it comes in… consider it a savings account.. (by the way the amount the government makes on that money over the span of a year is minimal – consider that the first couple of months there isn’t much earned on that account)… Enjoy that that free money in april..

By: G.E. Miller

G.E. Miller — Tue, 24 Jun 2008 11:20:22 +0000

@ J.D. – it looks like you’ve run the math, but as to whether or not the IRS will take notice of 14 allowances, I’m not quite sure. If it’s something you’re concerned with you may want to consult a tax professional, I’d hate to lead you astray.

By: J.D.

J.D. — Wed, 30 Apr 2008 02:48:24 +0000

Question: Can I claim a really high amount of allowances in order to more closely estimate my final tax liability? I will only be working for a few months and don’t want to pay taxes every 2 weeks where the withholding is based on an estimate of what I would make if I worked for the rest of the year. I used a tax calculator and figued out that if I claim 14 allowances my bi-weekly withholding will be just slightly over my end-of-the-year tax liability (giving me a very small return), which is exactly what I want. My only concern is that the IRS is going to take notice of my claiming 14 allowances…

By: Andrew

Andrew — Sat, 05 Apr 2008 17:11:54 +0000

ppl tend to blow their tax refunds
but, ppl tend to blow pay checks too