For those of us that receive tax refunds

[Cup of Joe]

What do you do with your refund?

I receive tax refunds each year, even years where I never paid federal taxes. All the investment talk lately has me thinking. I receive roughly the same refund per year (about $4k) multiplied by 10 years and 3% interest would $50K.

I realize most blow the money but what do BITOG'ers do with their refunds?

 

[HerrStig]

Many realize that a "refund" is the government giving you back your money WITHOUT interest for the time they kept it. TO go beyond that in an answer the TYPE of refund must be understood. Some "refunds" are actually "income redistribution" shch as the "earned income credit", or the "head of household" credit.

 

[volk06]

I claim 0 on my taxes since I'm a single guy. The money I get back I've been thinking about putting into a ROTH IRA each year. I know that by claiming 0 I'm giving the government "free money" during that time but I like being able to have that lump chuck of money to put it all in there at once and like knowing that I won't risk the chance of needing to pay in.

Just don't get in the habit of expecting a tax return or banking on it to pay things off.

 

[eljefino]

Originally Posted By: HerrStig
Some "refunds" are actually "income redistribution" shch as the "earned income credit", or the "head of household" credit.


If one is to criticize that, they should also criticise the IRA contribution credit, as it rewards sending money off to Wall St, for the one-percenters to molest for their personal gain.

Which I'm cool with, BTW.

 

[bk111]

It is BITOG afterall, The money goes into increasing the oil stash in the garage.

 

[ahoier]

For the past years of my working career, I have my refund wired directly to my savings account....I buy what I want, when I want throughout the year when needed/acceptable....so I don't find it necessary to "splurge" with this "refund" of funds that the government held onto for me throughout the year...

Don't get me wrong, I do treat myself....hehe. But within my means...

Ontop of the refund checks, I also have $20 a month wired to the savings account, so in a way it's another "emergency fund" per se...



On the other hand yes....I've heard people, that rack up their CCs through the year, and use their refund check to pay off their CCs.....

One approach I've heard anyways

 

[Spazdog]

Uhhh...I dunno', maybe a dinner out and a movie?

We're only getting back $78 this year.

The gubberman gets enough of my money. I don't need him to hold onto any more of it than that.

 

[otis24]

I rarely get more than $2500. That usually goes into "catching up" on bills or paying down debt. I am hopeful (based on looking at my W2's) that for ONCE, I will be one of those getting the EIC. If so, these funds will be used to recuce debt as I work towards a lifestyle of debt-free living.

 

[JHZR2]

I pay forward bills, which means put it into ING or similar to use towards bills and other things, and then up tax-deferred stuff to lower my effective income going forward for an allotment of time.

 

[FowVay]

I spend most of mine on women and cigarettes. The rest I just waste.

**I've always wanted to use that line.. haha

 

[91344George]

Originally Posted By: eljefino
Originally Posted By: HerrStig
Some "refunds" are actually "income redistribution" shch as the "earned income credit", or the "head of household" credit.


If one is to criticize that, they should also criticise the IRA contribution credit, as it rewards sending money off to Wall St, for the one-percenters to molest for their personal gain.

Which I'm cool with, BTW.


Agreed!

I always have to chuckle when I see people getting irate over poor people getting a small amount of "income redistribution" yet when the rich get a very large amount of such money they never have an issue with it. Hypocrisy? Yep!

 

[PandaBear]

I deposit them back in the savings account.

 

[tenderloin]

Originally Posted By: 91344George
Originally Posted By: eljefino
Originally Posted By: HerrStig
Some "refunds" are actually "income redistribution" shch as the "earned income credit", or the "head of household" credit.


If one is to criticize that, they should also criticise the IRA contribution credit, as it rewards sending money off to Wall St, for the one-percenters to molest for their personal gain.

Which I'm cool with, BTW.


Agreed!

I always have to chuckle when I see people getting irate over poor people getting a small amount of "income redistribution" yet when the rich get a very large amount of such money they never have an issue with it. Hypocrisy? Yep!

People getting back money that they never paid (earned income tax credit) is not similar in any fashion to tax breaks or tax credits or anything else where people are actually contributing or paying.

 

[xBa380]

Mine is usually around $700 or 800 I believe... It will most likely go toward the new Canon 5D Mark III SLR... Been waiting! (speaking of which, may have just been spotted in the 'wild'... Or the new 7D II). So I am excited!

 

[91344George]

Originally Posted By: tenderloin


People getting back money that they never paid (earned income tax credit) is not similar in any fashion to tax breaks or tax credits or anything else where people are actually contributing or paying.


It is, because the wealthy are benefiting with the resulting significant interest gains on the money. Absolutely.

 

[JTK]

Pay off VISA, the rest to savings to be blown later.

 

[dwcopple]

pay any debt, then pick one beneficial home improvement project. Last year was new replacement windows. This year is a kitchen refresh.

 

[abycat]

I dont get any money anymore. I do get to pay some though I guess so i dont feel left out.

 

[bustednutz]

Refund??? HAHAHAHAHAHAHAHAHA!!!!!! Whats that? Being single, high earner, and childless means that I get to pay even more into the income redistribution system.
So glad my hard work is going to help those that won't do it.

 

[mechanicx]

Originally Posted By: 91344George
Originally Posted By: tenderloin


People getting back money that they never paid (earned income tax credit) is not similar in any fashion to tax breaks or tax credits or anything else where people are actually contributing or paying.


It is, because the wealthy are benefiting with the resulting significant interest gains on the money. Absolutely.


The way I see it, just because your employer chose to pay you say $10/hr and no benefits doesn't mean you didn't create maybe $50-$100/hour of wealth. So who's really paying the tax? And just because the executives made $100s of thousands or millions doesn't mean they were worth it either. Point is there's little fairness so why complain about income tax "unfairness".