| Author |
Message |
    
greenetree
Supporter
Username: Greenetree
Post Number: 7209
Registered: 5-2001
| | Posted on Wednesday, April 12, 2006 - 10:05 am: | 
|
Some people like to hang on to their money and pay a little in April; others like getting the refund. I am making no judgements on this.
But, I think that each person should make the decision on their withholding based on what it is best for them and not the direction that the IRS pushes them.
I just played with the withholding calculator on IRS.gov for the first time. The results are that, at my present withholding, I will owe $340 for 2006. If I change my withholding, I will get a $200 refund.
What pisses me off is that the website instructs me to change my W4 so that I won't owe money and tells me what to do in order to money back instead. How many people see that and think that if the IRS says to do it, that they'd better?
Personally, I'd rather pay them than float them the loan, even if it is for $200. But people who choose to follow the "instructions" of the IRS should do so because they want to, not because the misleading message makes them think that they have to. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2374
Registered: 10-2001
| | Posted on Wednesday, April 12, 2006 - 10:14 am: |
|
Agreed. You should absolutely be paying the IRS in April and not the other way around. The IRS' position is that if they can get you to pay they 1) get the use of that money up front and 2) don't have to go chasing down people who can't pay. I always do a projection in July and adjust my withholding accordingly so that I have to pay in April. |
Thenewguy
Citizen
Username: Thenewguy
Post Number: 110
Registered: 4-2004
| | Posted on Wednesday, April 12, 2006 - 10:29 am: |
|
The IRS calculators are worthless. They underestimated my withholdings (again) this year and we have to pay the gov't |
greenetree
Supporter
Username: Greenetree
Post Number: 7211
Registered: 5-2001
| | Posted on Wednesday, April 12, 2006 - 10:46 am: |
|
So, is there a good one that you accounting-types can recommend? |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2376
Registered: 10-2001
| | Posted on Wednesday, April 12, 2006 - 10:58 am: |
|
Besides me?
I personally didn't like any of the "free" ones. I use the professional version of TurboTax. It can be downloaded for free but you have to register with them. I believe that you can use the version you download for free, you just won't be able to print or file it unless you pay the fee. Currently that fee is $15 for a federal return and $11 for each state return. But since you are only using them for projections you shouldn't have to pay for them. If you've used TurboTax in the past you can convert your files to ProSeries and import the files.
http://www.proseries.com/products/professional/index.aspx?page=pay_per_return&li d=home_ppr
You might want to give it a try. |
kmk
Supporter
Username: Kmk
Post Number: 1174
Registered: 5-2001
| | Posted on Thursday, April 13, 2006 - 9:50 am: |
|
We are an example of the silly folks who have uses the IRS withholding to help us save....You know - we get GIANT refunds at the end of each year...
I have recently "seen the light" and have decided that I don't want the IRS holding our money until it is due.
I would like to divert the exact amount that we have set aside now to a savings account instead.
Here is my silly question...do I still pay the IRS a little something quarterly throughout the year or is it all due in one big chunk in April?
I plan to set up my own "personal" withholding account and I need to know how liquid it should be.
I am also hoping that the bank will take the direct deposit paychecks and divert my "withholding" to it's own account before I see it! |
greenetree
Supporter
Username: Greenetree
Post Number: 7229
Registered: 5-2001
| | Posted on Thursday, April 13, 2006 - 10:21 am: |
|
Kmk - it should be quite easy to set up an automatic transfer from your direct deposit account into a separate account.
We pay our own property taxes and do exactly this. Every payday (when the checks go in),XXX dollars go straight to the account we use strictly for property taxes, insurance premiums, etc.
I keep inceasing our number of exemptions and we still get a couple thousand back each year. I can't seem to get it right. I may try Sports' suggestion of TT.
This year, like an idiot, I just bought Basic. Then, because I ended up waiting until this week to do the taxes, I ended up buying the state products (NY & NJ) separately. It doesn't take more than a couple hours to do both by hand, but I just didn't have time to deal with it. Had I bought Deluxe to begin with, it would have cost me half as much. Live and learn. |
MBJ
Citizen
Username: Mbj
Post Number: 206
Registered: 10-2005
| | Posted on Thursday, April 13, 2006 - 10:29 am: |
|
KMK, the IRS has rules regarding estimated payments throughout the year. If the amount you owe when you send in your taxes in April is "too big", the IRS can deem that you were underwithheld throughout the year and hit you with extra penalties and interest. There are some safe harbors that let you avoid this, but you need to see how they apply to your personal situation. |
Closed: New threads not accepted on this page