Author Topic: Tax Man  (Read 6122 times)

RatBastard

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Re: Tax Man
« Reply #15 on: January 18, 2014, 11:35:01 pm »
Last year may have been our best ever. Maybe $600 in returns. Would like to widdle that down just a bit lower.

I am going to adjust our W-4 situation here.  The optimal tax situation from a financial point of view is, of course, to owe as close to the maximum that you can without having to pay a penalty.  Plan for the tax liability each April and invest an equivalent amount as early in the year as possible...


With Savings accounts returning .01 percent annual interest and US savings bonds returning next to nothing I wouldn't worry so much about the small amount of money you are talking about.  I got back 4000 dollars last year but I am expecting less this year.   I have had to pay 5000 dollars before and let me tell you I prefer getting money back.


It is this exact type of short sighted thinking that keeps poor people poor and unwise investors behind.  It isn't so much the rate you are getting on an investment as much as it is the spread on the time value of money.  Most CDs pay at least ½% which is 50 times your quoted .01%.  There are many other ways to invest as well, such as the stock market that could easily pay a lot more. 

Another thing many people miss with any tax refund they get is that they go out right away and blow it all as if it were free money.  Which, of course, is the absolute worst thing you can do.  A much wiser (and true investment) would be to pay off as much debt as possible starting with the highest interest bearing debt and working your way down.  (I wish I was disciplined enough to do this.)
FUKIT

atomic

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Re: Tax Man
« Reply #16 on: February 03, 2014, 06:12:08 pm »
Last year may have been our best ever. Maybe $600 in returns. Would like to widdle that down just a bit lower.

I am going to adjust our W-4 situation here.  The optimal tax situation from a financial point of view is, of course, to owe as close to the maximum that you can without having to pay a penalty.  Plan for the tax liability each April and invest an equivalent amount as early in the year as possible...


With Savings accounts returning .01 percent annual interest and US savings bonds returning next to nothing I wouldn't worry so much about the small amount of money you are talking about.  I got back 4000 dollars last year but I am expecting less this year.   I have had to pay 5000 dollars before and let me tell you I prefer getting money back.


It is this exact type of short sighted thinking that keeps poor people poor and unwise investors behind.  It isn't so much the rate you are getting on an investment as much as it is the spread on the time value of money.  Most CDs pay at least ½% which is 50 times your quoted .01%.  There are many other ways to invest as well, such as the stock market that could easily pay a lot more. 

Another thing many people miss with any tax refund they get is that they go out right away and blow it all as if it were free money.  Which, of course, is the absolute worst thing you can do.  A much wiser (and true investment) would be to pay off as much debt as possible starting with the highest interest bearing debt and working your way down.  (I wish I was disciplined enough to do this.)

The stock market could easily pay a lot less. Like the negative returns it has presented so far this year.  If you can gurantee you could would make money over a year but there is certainly no gurantee. And for some of the money it will be a few short months.  If we were to say you could get away with 4000 dollars short (which is probably not even true). And say you could get 2000 dollars at 1/2 percent (which probably isn't going to happen with a 9 month CD.  that would be 10 dollars you would net.  Yeah that is really worth all the trouble you go to and not even really feasable.   Looking at real rates for this time period I found .15 percent which equates to 3 dollars.  You advice is probably the worst that I have read.

As for the debt thing. You own money and you are thinking about putting your taxes in CD's to get .15 interest?  I don't even know where to begin with you. 

As for myself I owe 2000 dollars of federal taxes.   I do get 700 back from the state.  No money to blow here.  But if I did have money to blow I would glady blow it on stuff for the house.

atomic

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Re: Tax Man
« Reply #17 on: February 03, 2014, 06:16:59 pm »
I am sorry a .15 percent on  a 9 month CD of 2000 dollars would not pay 3 dollars it would pay less.   Only $2.25. 

i am gay and i like cats

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Re: Tax Man
« Reply #18 on: February 03, 2014, 06:18:14 pm »
are you talking to yourself, again

Got Haggis?

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Re: Tax Man
« Reply #19 on: February 05, 2014, 04:16:50 pm »
i use my refunds to pay my cc balance down to $0

i am gay and i like cats

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Re: Tax Man
« Reply #20 on: February 05, 2014, 07:15:57 pm »
im an independant contractor . . . and i pay all of my taxes at once, and i never get a refund, ever.  so stop complaining.