Do you usually get a tax refund or have to pay
- Thread starter walterjay
- Start date
Don't file taxes usually until October and give a few thou estimated tax that I usually get all back since business expenses nearly wipe out profits.
I wish to add something more to this point. The longer you have money working for you the better. You mentioned that the $1200 is pretty much the same whether a one time amount annually or twelve monthly installments of $100.
Time is a huge factor in savings and interest accrual. Discipline is another factor here. Once that discipline of putting away money each month is established it becomes second nature to the individual and over time that monthly amount will increase as your income increases.
Back in the mid-80’s I started investing with Twentieth Century Mutual Funds. They advertised that anyone could start with just $25 a month. I was making about $5 an hour at the time so this was perfect for me. Back then I had to write a check each month. Eventually that $25 became $50 then $100 a month and on and on as my income grew. I had established that discipline of paying myself first. I will just say that over time my portfolio grew into a very nice amount in the $500,000 range despite never making more than $25 an hour. Time and discipline.
When I budgeted for that monthly amount the first thing I did was to adjust my withholding. I was claiming zero like many others and getting the big refund. I changed that to come close to break even and used that money each month to go into my investments. That same discipline was applied to other things in my budget as well.
Frugality is something of a lost art these days.
One can save money, invest and still be successful while getting a tax return. I’m not getting a $20,000 return for the pete’s sake. I really think you’re creating a false dichotomy here. Hey if this is the way you see it then go forth.
Nick1994
$100 site donor 2024
I always get a refund, but this year I’m sure I’ll owe. Had some odd financial things that I’ll owe on.
Shouldn't matter. Your W-4 can be adjusted to help fine-tune the amount of withholding
Even if I had them take absolutely nothing out, the child tax credit is more than my tax liability.
I try to break even, some years I pay, some I get back. I dont like to see more than $200 difference either way.
The reality - middle class has a modest tax burden. You’ve discovered this in your own case by doing the math.
If more people actually did their own taxes, and understood the actual overall rate they pay, as well as the marginal rate to which their subject, they would understand how ridiculous, how specious, the political and media rhetoric around taxes actually is.
But most people are ignorant. Getting a refund is “good” while writing a check is “bad”. They actually have no idea how much they’ve paid over the year, or in which marginal bracket they are.
I do my own taxes, so I know our bracket, and our overall burden, to the dollar. I can compare year over year. I know the effects of policy changes.
I wrote a check this year. Not much. About a grand. Not enough to incur a penalty - and I didn’t give the government an interest free loan for the year.
Right about the balance I had planned.
Preach on dude, nailed it/my sentiments exactly. The biggest problem we face w/r to taxes/taxing IMHO is that folks don't actually understand the math. Total bottom line tax liability off your 1040 divided by your gross income = effective tax rate. Most folks aren't paying much here w/r to federal income tax (as a % of their gross) and it's going to be significantly lower than the top marginal tax bracket your income falls in.
I am the same - I am my own accountant and know my taxes inside/out being self-employed and understand any policy change and how it impacts me to the $. I do the math first and run my mouth second.
Is the child tax credit now fully refundable i.e. you can fully zero your liability AND get a refund?
Right...I hear people say they pay almost 50% of their income to taxes because they're "in the 35% or 37% tax bracket" and with state income taxes yada, yada, yada. I immediately know they have no idea what their tax situation is or the concept of marginal tax rates. We pay relatively little tax in the US compared to other countries with similar standards of living.
The first year I was doing this on my own (2017) I goofed big time not setting up my spreadsheet/calcs correctly for Trump's pass-through business deduction. So little was availabe on how it would work until early 2018 when the software came out I just did my best guess on estimates using some white papers/info I could find from various sources online during the year. I knew I had a chance of being wrong so I was careful having a lot in the bank which turned out to be a smart move...holy cow I was off...owed $15K that year in April..hahahaha but I was ready and it wasn't a huge deal. After that I've always been close on either side and I usually try to ride the line of paying the min. I have to while not incurring a penalty then "settling up" in April with a payment. This year was a different with a small return which I just take but yeah, applying it forward seems to be the way to go.
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100% dude. I had some guys workign for me at one point making modest incomes ($50-60K) telling me they were tired of paying 50% taxes. We had a math session on the white board that day. There was a killer podcast episode of planet money (NPR) about a year ago that laid out our tax system fairly and planinly and it was shocking how little we actually pay vs. the ROW but most here don't undestand or get that...but we also have less public services than many countries so that makes sense. My main beef is simply the complication of it and the politcal weaponization of something that should be fairly simple.
Again, when I take all our local, state, fed taxes, fees, etc together - well suddenly 30%+ of MY money is being sucked away. Then we add in the amount - the hidden amount - businesses pay, that we pay them - probably close to 40% total now.
So, for what exactly? Seattle alone wants $10,000,000,000 yes that is a B for homeless.
And again, we don't have a taxing problem we have a spending problem.
So, for what exactly? Seattle alone wants $10,000,000,000 yes that is a B for homeless.
And again, we don't have a taxing problem we have a spending problem.
Highboy
Site Donor 2022
I had to pay to the Ukraine fund!!!
Every year I do an "all-in" tax calc estimate. All of it...state/federal/local/gas/sales/fees (all those stupid ones on your utility bills)/social security/medicare/DMV,vehicles/anything etc. etc. That divided by gross and this year I was around 23% all-in. That's reasonable to me for the income I earn and and the standard of living I have. Clearly everyone makes that determination on their own.
What is hidden business tax that you pay?
