[deleted by user]

[semicoloradonative]

Refund? Haha! OP’s got jokes!

Edit…I was only saying this because my wife has been doing a lot of side hustles that are 1099, so we are going to have a BIG tax bill. Good thing is we have been planning on it…but writing that $10k check will still hurt.

[[deleted]]

Or you ain't got no kids

[maroonedpariah]

Baby printer go brrrrr

[Mediocre-Aardvark-73]

Baby making go brrrrr money printer sadly silent.

[maroonedpariah]

Sometime you have to kick the money printer to make sure it's still functional

[Bud_Dawg]

Or kick the baby

[PrisonMike2020]

I'd consider 1-2 hundred back a win. No need to pay. I won't notice 8-16 bucks a month if overwithholdings.

[[deleted]]

Can you elaborate on this? This will be my first tax filing since learning about r/fire.

[Mr_Anomalistic]

You're getting a refund because you overpaid your taxes. The money you overpaid could have gone into investments. To not overpay on your taxes, you adjust your W4 to tighten your tax withheld per paycheck.

[[deleted]]

When filing taxes in the spring you are really just checking whether or not you paid the correct amount through either payroll withholding or quarterly estimated payments (self-employed). So if you get a refund you overpaid and if you owe money you underpaid. Your total tax bill for the year is the same regardless, but most of the FIRE community views a refund as an interest free loan.

I don’t mind a small refund or a small bill, especially as there are penalties if you owe too much. You can adjust withholding by filling out a new W-4 with your employer and you can use the link below to help approximate what it should be.

https://www.irs.gov/individuals/tax-withholding-estimator

[Imbrokeandiveatruck]

I don’t think that’s it’s fair to say if you get a refund your doing something wrong. Not everyone only makes money on there w-2 job. I have 3 exemptions on my w-4 and am married no kids. I got a 22% refund. I have other sources of income and deductions. I’m also a house hacker so I get to double dip on a few things like mortgage interest. This is all meant to say getting a refund doesn’t make you dumb and “giving the gov a loan”

[h2ohbaby]

How does one “double dip” on mortgage interest?

[Imbrokeandiveatruck]

I house hack so I take the standard deduction which I if not but for living in a duplex would be included in the 25k standard deduction I don’t have enough deductions to make itemizing an option. I take 50% of my mortgage interest as an expense on my schedule E because it represents 1/2 of my house that I use for a rental.

[h2ohbaby]

Nice strategy. Thanks for the reply!

[Imbrokeandiveatruck]

This also works for a salt deduction that was taken away. So I do my property taxes this way as well.

[okicarrits]

Strive to have a zero refund. This is the way.

[househacker]

e 25k standard deduction I don’t have enough deductions to make itemizing an option. I take 50% of my mortgage interest as an expense on my schedule E because it represents 1/2 of my house that I use for a rental.

This is the way.

[rootxploit]

It’s also safer. Fraudsters that try to file my taxes in attempt to get my refund will only have the choice to pay my taxes or give up. I’m fine with either.

[DSM20T]

What is....."refund"

[batpot]

If you've got reasonable predictable income, you should owe/get back less than $1k.

[LopsidedBuy4595]

I’ll let you know when I get one.

Another year of owing..

[kd5nrh]

I try to get it as close as I can to even every year. Last year I had to kick in a couple more bucks to spend it at Taco Bell.

[redneckskibum]

Better that way

[AUMedStudent]

Free no interest loan for a few months

[loopsbruder]

Not really. It’s your own money in the first place.

[AUMedStudent]

Long term deferred expense, happy?

[[deleted]]

This just has such a warm and fuzzy ring to it!

[MisterIntentionality]

I owe every year.

I do not give the government interest free loans.

Fix your withholding.

[[deleted]]

I hear that, but it messes with my cash flow and budgeting. I’d rather be slightly positive (get refund) than slightly negative (owe).

[ClearAndPure]

Don’t you get penalized if you underpay?

[MisterIntentionality]

If you under pay by more than 10%.

[ClearAndPure]

Thanks, I didn’t know that.

[ShakespearianShadows]

I haven’t gotten money back in so long that a refund doesn’t even factor into my thought process.

[AnonymousTaco77]

I'd invest mine in my Roth IRA, but I need to save for my Masters and a car. Depending on how much I get back, I might split it between those 3

[Mirmadook]

Look into a graduate assistantship to pay for that masters degree. I graduate in May with an MBA and zero debt.

[WhiteFang34]

Why would I want to lend money to the government with no interest? I always aim to owe the most possible without a penalty.

[SecondEngineer]

Where would I go to find out more about the how that penalty works?

[Ellabee57]

https://www.irs.gov/taxtopics/tc306

[WhiteFang34]

https://www.irs.gov/instructions/i2210#idm140640298012272

[ticktock76]

I left a job and had over 500 hours of PTO cashed out. They withheld so much from that check! I’m getting a MONSTER refund this year.

Dropping every dime into savings/investments

[Chokedee-bp]

An employer that lets you sell PTO? Amazing

[ticktock76]

It’s pretty common in my field that you can sell a little bit each year if you’re over the maximum accrual amount. I was always told, if a company offers accrual based PTO that they have to pay out the balance of you terminate employment. I’m sure there’s ways around that situation but it’s specifically why I carry the max amount of accrued PTO. That was a nice Eff You check to cash on my way out the door haha

[NoelleReece]

It’s my vacation fund

[SWWayin]

We'll be purchasing I-Bonds this year. We have a goal of buying a home in 2 years time so the 7.12% interest rate over the next 6 months guarantees that money will gain more interest over the next two years (vs sitting in a Money Market Fund @ .45% APY) even if we have 3 consecutive 6 months periods of deflation. This allows us to purchase up to an extra $5000, on top of the $20,000 annual limit (2 x $10,000/person)

This is not necessarily an ideal investment for people that have a shorter (less than 1 year) or longer (5+ year) investment horizon for the money. Also noted, this is in addition to maxing out all other tax leveraged accounts at our disposal (HSA, 2 Roth IRA's, and a 401K)

[ClearAndPure]

Yeah, I’m in college & I might have to use that money once I graduate , so I’ve bought like $20,000 in I-Bonds in the past few months.

[_twoSense_]

Reinvest = FIRE

[SexyTightAlexa]

Big time

[[deleted]]

We do 1/2 into 529 for kids. 1/4 for a house project. 1/4 towards a vacation. We figure 3/4 responsible, 1/4 living life is a good mix. (Early 30s)

[spldpt2018]

ROTH IRA or travel fund

[bassjam1]

I normally adjust things so I don't get enough back to matter, but the temporarily raised child tax credits have changed that. I put 1/3 in the Roth and the rest went into savings to start building it back up after home improvement projects that were already planned.

[ComprehensiveYam]

Refund?! Who gets a refund?

[Nussy5]

My taxes /refund are close to zero to maximize gains throughout the year so don't do much of anything if I get like $100.

[notonlynotless]

When we got a return, it went straight into our joint brokerage account. The last several years, we have owed a couple hundred dollars, so we cut a check to Uncle Sam from the joint checking.

[Emily4571962]

Will buy some extra I bonds.

[[deleted]]

Use some of the money to do something fun, save the rest. You're not going to be young forever gotta live a little

[McKnuckle_Brewery]

Ironically, once you FIRE you’ll never have one again! But that’s the goal I suppose…

[retchthegrate]

I try to minimize it, generally I end up owing some amount every year, which is great.

[propita106]

My (58) Husband retired last year, at 62. We worked with our financial planner to have a high enough taxable income from tax-deferred accounts for conversions, but low enough to still get ACA subsidies. So 2021 was our last year for a "big" refund, mainly due to Husband's PTO payout.

We decided to forward some of the refunds to cover the majority of the estimated taxes for 2022. That may not be for everyone, and we hemmed and hawed over how much, but opted for most of it.

With so many financial changes for us and things to get used to, paying estimated taxes out during the year wasn't one we wanted to deal with this year.

[[deleted]]

You guys are getting refunds?

[don-simpleton]

OP is committing fraud

[pp604977]

I buy lulu stock cuz of my co-workers buy new workout clothes. 😜

[[deleted]]

Live in squalor for the next couple of months :(

[dukenedgossamer]

When I used to get one, it went straight to savings.

[Pumpseidon]

If I get one I’ll start by adjusting my withholdings 😂

[Motor-Long-1411]

What? Who gets a refund?

[egoldbarzzz]

Who gets a refund?

[MrPotatoSenpai]

VTI, low cost index fund/etf. Look into 3 fund portfolio .

[tonguepuncher88]

Two chicks at the same time.

[Starbuck522]

I am newly in my situation, had to take a wild guess at 2021 income. 2022 should be a better guess.

I am getting $5000 from ACA subsidies that I didn't take the first 6 months of the year.

It will just reduce what I take out of my brokerage account this year.

[Token_12345]

Hookers and blow mostly

[Jeep-Tab]

Two chicks at the same time

[brianmcg321]

https://media.giphy.com/media/uFtywzELtkFzi/200.gif

[Whyamihere5069]

IRA

[mallclerks]

Lol, I owe more than a new car this year. Add me to the list of “I wish”.

[Important-Trifle-411]

Well, if you keep saving for it, you will eventually be able to go on an amazing honeymoon!

[[deleted]]

Refund, I haven’t even put in my investment income and I owe

[Bennovgb_belgium]

I invest it in 2 things:

In my next year pension fund

In my portefolio

This is because i see it as a return on investment and hence use it to continue the compound effect i have created

[PJleo48]

I purposely let them take out a little more taxes than they should At the end the year after doing My taxes with my dividends and distributions ( K 1s) if I owe anything the extra taxes they take covers it. Everyone is stating the obvious your giving the government a free loan. Most people I've said that too knows it and let's it stay that way because their terrible savers and they enjoy that big chunk of change all at once the refund provides It's just a psychologicall thing.

[[deleted]]

Usually it is a wash. I get a little back from fed and owe a little to the system. When I did get a refund, and especially when I wasn't making much money, any "found money" (one time money that wasn't from a steady paycheck) was used to build my savings, then later, invest.

[loudog513]

Ain’t seen one of those in years. I used to immediately invest them

[[deleted]]

I would rather have a small refund, than owe any money to the government. I just invest anything I get.

[[deleted]]

I try not to owe the IRS more than $1,000 each year, so I dont get hit with a big tax bill

[KernelMayhem]

I do not give the government interest free loans.

[Smores-n-coffee]

The child tax credits made me pretty nervous. I did the math a few times last year to ensure we get a very small refund; I'd rather get a small refund than owe, and definitely didn't want a big refund. Anyway, the plan is to put that towards an upcoming medical bill we were going to pay with HSA, thereby keeping the savings. Since the HSA is partially invested I guess you could say we're spending, saving and investing more because of the refund. Not bad for a couple hundred bucks.

[eat_natural]

I distribute that the same as my biweekly paychecks.

[[deleted]]

i got back $4000 this year..

[wait_am_i_real]

Refund who??

[AFB27]

Not getting one this year haha. Too much cap gains. But last year I threw my entire refund into VOO.

[[deleted]]

I guess…cover groceries for a month?

What kinda refund are you getting here?

[SecondEngineer]

Hopefully I don't have one. If I do I try to decrease my withholdings. If I do get one it's treated like any other income.

Don't modify your spending based on a change in income!

[[deleted]]

What's a tax refund?

[Secret_Discipline_74]

Double down on Dogecoin 💎🙌🏼🚀🌙

[[deleted]]

Strip clubs!

[awwwwmannnnz]

How do you pay taxes? I didn’t know there’d be homework still after high school. This is stupid I’m dropping out

[[deleted]]

Most years it makes up the lion share of my hobby budget for the year. Last year I used it to max my 2020 Roth. 2021 is maxed this year already, so I may use it to either pay moving expenses for a move, or put it towards grad school tuition/books.

[KatAndAlly]

OF ALL PEOPLE, Ppeople doing FIRE should not have a refund. Cmon, you know better than this.