I don’t. I run up a huge tax bill every 4/15 because I don’t feel like giving the government an interest free loan: Fiscal Fitness: Give Yourself a $200 Raise Right Now user Do you like lending money to the IRS? The answer is yes for three-quarters of taxpayers. Every year, about 75% of us overpay our taxes. By quite a lot. In fact, the average tax refund last year was around $2,400, which amounts to $200 a month lining Uncle Sam’s pockets until he pays it back to you … without interest. http://shine.yahoo.com/channel/life/fiscal-fitness-give-yourself-a-200-raise-right-now-562577/
I do because most of my pay is taxed as a bonus and there’s nothing I can do about it. My payroll exemption is a 16 - no federal taxes paid out of my salary all year and I still get hosed.
wowzers must be some bonus!! I have 0 allowances and so does my husband… still have to make quarterly pmts 
Where do you think interest rates are, right now, today? Answer: 0.00% Secondly, it is not as though you “invest” the $2,400 tax refund on January 1st. That money is placed in this “interest free loan” throughout the year. This needs to be figured in to your calculation. Three, 75% “of us” are not fiscally fit enough to manage their own tax bill. That 75% that overpay taxes look at the “average tax refund” as a savings method. The tax refund comes and is immediately sent to the credit card company to pay for Xmas. Four, keep in mind that interest from US Treasuries are taxed as ordinary income. So subtract 25% from your calculation of the interest you could have earned elsewhere.
#1 Gunner Wrote: ------------------------------------------------------- > Where do you think interest rates are, right now, > today? > Answer: 0.00% That means I must be earning monopoly money on my bank accounts then, since I see a statement that says “interest earned” every month.
thought this thread was about buying government notes.
CPierce Wrote: ------------------------------------------------------- > thought this thread was about buying government > notes. Nah this is AF. We talk about checking accounts, politics, and entry level ER jobs.
and hookers and blow. never forget about the hookers and blow
SMIRK Wrote: ------------------------------------------------------- > I don’t. I run up a huge tax bill every 4/15 > because I don’t feel like giving the government an > interest free loan: How huge is “huge”? You have to pay penalties if you’re over by too much.
There is a kid in the Tech group at my office that pays taxes quartely just to stick it to govt (clearly on principle). Anyways…he said that you have to estimate foward earnings and if you are wrong by more than the allowed spread…you get fined a penalty.
SMIRK: Aren’t you in 50% cash? (as per other thread) You essentially are lending your money to govt at 0% by default.
I was going to post a sarcastic response but since you were the only one on the other thread to have even a remote understanding of what asset allocation means, I won’t.
I always file exempt, unfortunately there is no way to do this for performance/bonus pay (which I get every other paycheck). Also for those of you claiming checking accounts return 0% right now you are wrong (although the majority are damn close to this). You can find accounts that will pay as high as 5%!
Sure I could earn a few more dollars in interest by not getting a refund, but the thought of writing a check and mailing it to the government makes me want to puke. But as already said, with such low interest rates it’s hardly worth trying to game this.
^So what do you think you are doing every time you get a paycheck then? Also, its not so much the risk free rate that matters here as it is the opportunity cost of capital to you (which could be substantially higher: ex. you have a 20% credit card you are trying to payoff, if you file exempt you can pay it off in 6 months if you don’t you can only make minimum payments until you get your refund).
adavydov7 Wrote: ------------------------------------------------------- > ^So what do you think you are doing every time you > get a paycheck then? Also, its not so much the > risk free rate that matters here as it is the > opportunity cost of capital to you (which could be > substantially higher: ex. you have a 20% credit > card you are trying to payoff, if you file exempt > you can pay it off in 6 months if you don’t you > can only make minimum payments until you get your > refund). +1
adavydov7 Wrote: ------------------------------------------------------- > I always file exempt, unfortunately there is no > way to do this for performance/bonus pay (which I > get every other paycheck). Also for those of you > claiming checking accounts return 0% right now you > are wrong (although the majority are damn close to > this). You can find accounts that will pay as high > as 5%! Who is offering 5%? From what I’m seeing, 1.5% is great right now.
Do a search there are at least ten banks offering in the range of 4-5 percent on checking accounts right now (and this is just ones I know of).
If withholding was abolished there would be a revolution when everybody had a to cut checks at the end of the year (or quarter).
adavydov7 Wrote: ------------------------------------------------------- > Do a search there are at least ten banks offering > in the range of 4-5 percent on checking accounts > right now (and this is just ones I know of). What? http://www.bankrate.com/funnel/checking-account/checking-account-results.aspx?market=2&prods=31 There are better rates on MMA products, but nothing close to 4% unless you’re talking about 5 year+ CDs, and if you’re willing to put your money away at 4% for 5 years in this environment I have some can’t miss Florida real estate to sell you.