Financial question?

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Originally Posted by arch0nmyc0n

I don't know much about American taxes but that sounds like you're suggesting fraud?

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Uhhhh ... no. There's no fraud involved, as Ya Know has mentioned. Unless there are unusual events that cause a sudden one-time jump in your deductions it is financially unwise to let your employer deduct that much money from your paycheck. In effect you're giving the United States a one-year interest-free loan of that six thousand clams.

If you invested it at 5% return that would be $300 you could have earned yourself with it.

Or if you had bought $115 ($6000 / 52) worth of beer, wine or spirits each week you could easily have spent the $300 on Tylenol and electrolyte-replacement drinks to help recover.

Your choice. :devil:

Agree with Yaa_know on this one

Daft as it sounds, here, it can make sense to overpay your taxes if you have the cash flow, the Inland Revenue pay better rates of interest on overpaid taxes than most high street banks :eek2: & its tax free too ! :thumbs:

So Uncle Sam doesn't pay you interest on overpaid tax ? What happens if you underpay then - he charges you interest ? Is that why you overpaid so much, I dunno what your rates are but surely that's like $25,000 worth of income 'extra' you paid tax on by 'accident' ... I'm guessing 25k based on tax rate of 25% = multiply $6100 x4 is 'nearly' ..

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Originally Posted by confus-ed

So Uncle Sam doesn't pay you interest on overpaid tax ? What happens if you underpay then - he charges you interest ? Is that why you overpaid so much, I dunno what your rates are but surely that's like $25,000 worth of income 'extra' you paid tax on by 'accident' ... I'm guessing 25k based on tax rate of 25% = multiply $6100 x4 is 'nearly' ..

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No - but if your underpayment is too large there is a "penalty" charged as a percentage of the underpayment.

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Originally Posted by Ya_know

Don't be such a tool!

First thing I would do is change your W4 so that you have much less taken out each month by the IRS! You realize the amount of money you lost in interest alone on that $6100 if you had an allotment for savings over the past year, and government owed you nothing!?! Why let them keep your money this long interest free???

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I got this under control, I claimed 4 exemptions on my W4....my W4 isn’t why I got so much money back. The reason why is because I bought 2 rental houses and was able to write off thousands for remodeling them. Plus we refinanced our house last year. You don't need to worry; my tax person will take care of me. Besides our credit card, I have my financial situation under perfect control. Making money is what I'm good at. O ya, I'm getting ready to pocket $20K from another house I've remodeled and sold. You only need to worry about your financial situation, not mine!

If you overpay and don't get it back (don't do your return right) but then ammend the return in a later year, they'll pay you interest from the end of the filing year where you didn't get it all back.

That was confusing, even to me, so.....
When I filed my 2000 return, I forgot education expenses. When I sent in my 2001 return, I also ammended my 2000 return, getting an extra $200 back. The IRS sent me a check for just over $218. That's not bad interest.

By the same reasoning, if you miss the deadline to pay, they charge you interest from the due date.



(I think)