Gotta brag a little....

[Gene Howe]

....because, we're never this early.

Saturday's mail brought the last two of our 1099s. By 10 AM yesterday, the taxes were done and efiled. Of course, they are in a queue and won't be processed by the feds or state until 2/1. But, they are out of my hair for another year.

Phyl is setting the refund aside for a house boat trip for the family on Lake powell in Sept..

[Ed in Tampa]

No body likes a show off.

But why are you getting a refund, adjust your withholding until there is no refund. That way you get to use the money all year instead of letting the government use it. They ain't paying you to use it.

I probably will get nothing back or maybe owe a little so I use their money until April 15 and I don't pay them for doing it.

[Gene Howe]

Well Ed, four years ago, we used some calculations that purported to tell us where to peg our withholding. Bear in mind that our only income is SS and our AZ state teacher's pensions. Neither vary from year to year. Still, the next tax season, we ended up owing a bunch. So now, we just get a refund and rest easy. Besides, any interest we are losing is almost nil, today.

No body likes a show off.

But why are you getting a refund, adjust your withholding until there is no refund. That way you get to use the money all year instead of letting the government use it. They ain't paying you to use it.

I probably will get nothing back or maybe owe a little so I use their money until April 15 and I don't pay them for doing it.

[JPG]

Simple 'solution'.

Over pay them.

Subtract any 'due' in future years from that overpayment.

Let the excess carry over to next year.

Forget about interest.

No worries about penalties or scraping up $ to pay them.



Sleep well all year!


Forgetting is the hard part!:D

[reible]

I have mine done on paper but can go no farther until they (the IRS) makes the fill-able forms available online (jan 31). Got the rest of my 1099 so I now have all the paper work I need.

Getting back more then I expected. When I totaled SCH -B it came in lean by about $2k (from the last couple of years). Of course I gladly have that money then a refund but you get what you get.

It is nice to get the taxes done for the year and as long as you are getting a refund earlier is better. I use most or all of the refund for our first property tax payment at the end of May. A savings plan as such. During my working days I tried to owe but that was then and now is now.

Ed

[charlese]

We have not had a refund for quite a few years. I like it that way:D I hate the idea of loaning the Government money. Look what they do with it. Bail out banks, and bad, poorly managed car companies, and the like. We (the Gov't) even decided to close out the loan and lose our money on the GM bailout.

Anyway, I look forward to paying what excess I owe, 4 months after the year ends. Therefore my witholdings are minimal. At least until I get a letter from the IRS telling me to increase them.

Side note: Last year the IRS sent me letter and told me I owed them $200 more from 2012. Took me a week to gather up proof that my calculations were correct. Then waited 4 more weeks to get a letter from them to say I owed nothing more and the "case is closed". That's pretty close to an apology.

Turbo tax instructions on how to deal with such demands was invaluable.

[reible]

Here is the facts about what it cost me in term of interest lost this year.

The amount I'm expecting is less then $2400 but for illustration purposes this works out well. If I were to start a savings account that is paying .5% and compounds 12 times a year and adding $200 a month then when all is said and done I would have gained $5.51 in interest.

Yep about a meal at a fast food place. So skip that meal and we are all even.

If and when the interest rate gets up to a few % I will revisit the issue.

Ed

[charlese]

Yes! I fully agree that any interest earned on monies withheld from the IRS until the last minute is small to the point of negligible.

My story is there is a little money left each month after all bills are paid. This money remains in my bank account. It adds up slowly during the year. This money can be used to jump on special tool deals, or other woodworking, household things or just held onto. It's nice not to feel constrained by a tool budget when a good deal comes along. If I would have instead, given (advanced/loaned) this money to the IRS I would have missed out on the deals that I am enjoying all year.

If it ever happens that I find it tough to make the final payment to the IRS, I have several months to save up that amount. Even more time if I file an extension.

[JPG]

Yes! I fully agree that any interest earned on monies withheld from the IRS until the last minute is small to the point of negligible.

My story is there is a little money left each month after all bills are paid. This money remains in my bank account. It adds up slowly during the year. This money can be used to jump on special tool deals, or other woodworking, household things or just held onto. It's nice not to feel constrained by a tool budget when a good deal comes along. If I would have instead, given (advanced/loaned) this money to the IRS I would have missed out on the deals that I am enjoying all year.

If it ever happens that I find it tough to make the final payment to the IRS, I have several months to save up that amount. Even more time if I file an extension.

Filing for an extension does not give one extra time to 'pay'.

Sure you can 'save up', just stay out of fast food restaurants.

[charlese]

Filing for an extension does not give one extra time to 'pay'.
D

DEPENDS ON HOW YOU LOOK AT IT!

This from the Feds:

Form 4868
Department of the Treasury
Internal Revenue Service (99)
Application for Automatic Extension of Time
To File U.S. Individual Income Tax Return
&#9654]www.irs.gov/form4868[/url].
OMB No. 1545-0074
2013

Late Payment Penalty
The late payment penalty is usually ½ of 1% of any tax (other than
estimated tax) not paid by April 15, 2014. It is charged for each
month or part of a month the tax is unpaid. The maximum penalty is
25%.
The late payment penalty will not be charged if you can show
reasonable cause for not paying on time. Attach a statement to
your return fully explaining the reason. Do not attach the statement
to Form 4868.
You are considered to have reasonable cause for the period
covered by this automatic extension if at least 90% of your actual
2013 tax liability is paid before the regular due date of your return
through withholding, estimated tax payments, or payments made
with Form 4868.