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Doronron
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This time of year, those of us in America with haircuts and real jobs find ourselves playing the annual lottery -- the IRS tax return.
This year, it seems I'll be getting a nice chunk back (which makes up for having to pay the last two). This brings up an interesting delimma.
1) The cash could be a nice nest egg towards an upgrade WinPC, covering the purchase of an nVidia 8800 and possibly a GB or two of RAM. This would solve any worries over whether my machine would be able to handle Spore and Hellgate and kill issues with overheating, but force me to stick with the upgrade grind for another couple of years as I watch the monster machine dwindle to a decrepit old man.
2) The cash could go towards a Nintendo Wii and a small starter library of games. A nice shift away from PC gaming, and possibly useful for some excercise (!) with Wii Sports. This is, of course, if I could manage to find one.
3) Nickel and Dime my tax return as I pick up games, music, movies, and books for the next three months. Lots of nice little things, but no definite improvement over my general quality of life.
4) Pick up some high end software and possibly a small laptop for a hobby I intend to turn into a business by the end of 2007.
5) Kill a couple of large bills.
So what about you guys? Those of you with with Tax Returns this year, are you going to have some fun with it, or be a bit more responsible and perhaps relieve some financial woe?
This year, it seems I'll be getting a nice chunk back (which makes up for having to pay the last two). This brings up an interesting delimma.
1) The cash could be a nice nest egg towards an upgrade WinPC, covering the purchase of an nVidia 8800 and possibly a GB or two of RAM. This would solve any worries over whether my machine would be able to handle Spore and Hellgate and kill issues with overheating, but force me to stick with the upgrade grind for another couple of years as I watch the monster machine dwindle to a decrepit old man.
2) The cash could go towards a Nintendo Wii and a small starter library of games. A nice shift away from PC gaming, and possibly useful for some excercise (!) with Wii Sports. This is, of course, if I could manage to find one.
3) Nickel and Dime my tax return as I pick up games, music, movies, and books for the next three months. Lots of nice little things, but no definite improvement over my general quality of life.
4) Pick up some high end software and possibly a small laptop for a hobby I intend to turn into a business by the end of 2007.
5) Kill a couple of large bills.
So what about you guys? Those of you with with Tax Returns this year, are you going to have some fun with it, or be a bit more responsible and perhaps relieve some financial woe?
Doronron on
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Pay off any high-interest debt you might have and then buy a Wii if anything is left after that.
Remember it's really simple: first pay off all your liabilities and then buy what you consider assets(Games, Computers, Music).
I hope this helps
I think I'll upgrade my PC, maybe. My XP 2100+ can't do a thing at this point. I'd like some dual core goodness.
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The rest, we're planning to save for emergencies and a vacation fund.
Shit, my tax rate for last year came out to -12%, according to TurboTax.
So uh...thanks guys, at least a small portion of the taxes you paid went to me
Exactly. It always makes me laugh when people get excited about their tax refund.
So this year the wife and I are getting a nice new LCD HDTV to replace the 25+ year-old BayCrest Radiation King that we're currently using as a TV. Then we're paying off the Visas and doing some work on the car. If we get waaay more than expected, it's Wii time for this dude. Or perhaps I'll do some upgrading on my computer...
This means, however, no fun money until then. Everything not going to bills, food, and rent will go to debt.
Not using my tax return towards this adds perhaps a month to the budget.
Definitely something to think about.
As for getting excited about tax returns, try having a job for a few years that didn't quite cover everything and having to figure out a way to put food on the table while maintaining utilities. Stop being being jackasses, guys.
I hope you realise that from a financial point of view this makes no sense at all.
From a personal one, however, it makes perfect sense. I mean, what is he more likely to enjoy, a new PC now, or a slightly lower percentage of his monthly payment being interest (which is tax deductible anyway)?
I dont get to decide how much is withheld. My company automatically takes a percentage away from me, and then the government pays me back at the end of the year.
I dont mind, its like free money that i dont have to save. If it slowly piled up through out the year, id find some way to piss it away over the weeks. Now i can blow it all at once on something big and not feel bad.
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I guess in the technical sense, but I'll be paying off the loan for decades even if I did dump my full tax return into every year. I'd rather actually enjoy some of the money I have now instead of throwing everything I have into getting rid of the mortgage. Yeah, I'd be out of debt quicker but I would have nothing to show for the 15 or 20 years of time I spent paying it off.
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You do get to decide. Unless your company is completely fucked up. It's your W-4 information that determines how much money is withheld for taxes from every paycheck, not some random guy in accounting.
If this were the case, you should have taken more exemptions. You would have had a smaller refund in April, but more money in your paycheck.
And jclast is correct.
I took what exemptions I could without putting myself at risk for an audit. You still don't have the right to be a jackass.
Im in canada and we dont have W-4's, and ive never been given the options to decide how much is withheld. And every job ive had, its either been the choice of "Withhold the proper amount" or "withhold nothing". This particular company i didnt even get that choice, they just automatically took. Generally they over-take so you dont come back at the end of the year screaming about owing money to the government.
*edit*, oh, and to be completely on topic, im really considering picking up a PS3, but thats pretty much with or without the tax return. Ive got the cash saved up already, but the tax return might pay for... oh, i dont know, a nice new receiver maybe. Ive got way too many audio/video devices right now, and some nice stereo speakers, but nothing to plug it all into. Of course with all the overtime i put in last year and all the exemptions im elligible for, ill probably be getting enough back to buy both... government take like 50 extra dollars for each day of overtime i do. But thats all comin' back to me now.
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Even if the government gets to borrow the money for a while no strings attached, it's worth it to me.
This year all of it's going straight into savings, due to certain job security concerns.
Maybe I am losing my mind but last I checked the Tuition Credit was a non-refundable tax credit.
Also, if your calculations are correct, $3500 is a huge amount to be lending the government interest free each year.
Take some of that money and hire a good tax planner to figure out if you can stop pay sooo much extra in taxes.
Audit? What are you talking about? You can take as many exemptions as you want. It's just if you take too many, you end up oweing in April instead of getting a refund.
I'm not trying to be a jackass, but seriously all you're getting in April is what you earned last year that the government has been holding onto interest free.
I think the way the tax credit works is that you can claim it against the income tax you paid normally. However, i did the math, and with the 15.25% income tax credit for tuition in canada, youd have to pay like 23000 dollars a year in tuition... i was going to make a comment, but he said 6 or 7 years, so i assume his kid/wife/self are doing their phd, which makes it seem not so outrageous.
So its not really a 3500 dollar loan, its like the government is saying "well, you paid this much money for this, so we can give you 3500 dollars back". I mean, you could withhold that money intially but im pretty sure youd get audited for something like that.
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Ah. Sorry 'bout that then. I have no idea how the Canadian system works. But those of you in the US have complete control over how much money is withheld for taxes.
I'm still considering driving myself just to avoid paying for a 1 hour-ish flight.
This is the "play now/instant gratification" attitude that the banks love.
Personally, I've pretty much given up on trying to have a gaming worthy PC for any period of time. Figure spending the money I would have spent on upgrading the computer on consoles & console games is a much better deal (spend $400 and get an XBox 360 that will last me around 4-5 years versus spending the same amount to upgrade my computer and have it become comparatively weak in a year or two).
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I need to actually edit my W4 to take another say $5 or $6 out every month. My employer estimates withholding incorrectly and I end up owing roughly $60 every year like clockwork. (Yes, you can specify an additional withheld amount on your W4 ... I made that mistake with my first job. I thought I had to specify how much I'd put toward income tax instead of it being automatically computed by my employer. Ended up with a huge tax refund, but was poor all year.)
Taxes are no mystery nor lottery. It's just that once every year you need to square up the books (tax return) with the estimates (income tax withheld).
More like 5 hours, once you factor in getting into the airport, waiting for boarding, flying, then getting out of the airport at the destination.
What a waste of time. :P
Yes, but it is non-refundable. Which means you can use the credit to reduce what you owe to the government to $0. But you can not go beyond that (ie get a refund). You can carry the remainder of the tutition credits etc into the future to use against future taxes owing.
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Perhaps you're not trying to be but the initial post you made in the thread was essentially "I laugh at people because I am so much smarter than them HAHA". You made this assumption without regards to financial situation I may have had to deal with or what other posters were dealing with. Your further posts reinforced that stance.
Notice my OP had a question in it. Care to answer the question, or would you rather continue doing your smug routine?
Say you're getting $600 back. That's $50 a month. What would you have done with an extra $50 every month? Even though I know that if I save $50 every month I could afford a 360 and a couple games I would have put that $50 toward paying extra on my mortgage.
If you have bills, be they mortgage, credit card, mob debt, whatever, that's where I think the money should go because in all reality, you're not getting a $600 chunk. You're getting 12 $50 chunks all at the same time that should have been yours every month to begin with.
And this is exactly what I'm doing with my refund. I miscalculated how much to withhold due to buying a house last year, so my wife and I are paying off (or significantly paying down depending on state returns I've yet to calculate) our car. I'm sure I'd have more fun with a 360, but getting rid of that debt is more important to me in the long run.
That's true. I anticipate putting my refund towards the bills. However, even once I get those completely paid, I doubt I'll suddenly end up using the extra money I'm no longer paying towards them to get something fun. In short, bills or no bills, I'm still not likely to spring for the Wii just based off of my normal monthly budget.
Sometimes it's just nice to have the option.
Pay off the loans and then you won't have loans to pay off when this comes around next year.
Yeah, basically. The debt's not that bad, though. Even without the refund, I'll still be able to get rid of it well before the end of the year. The refund offers about a month's difference.
I hope he makes the paying bills decision, but isn't this really a thread just to talk about big shit we wish we could afford?