Do You Get a Tax Return?

we get a refund. i normally always do. and with that refund i get caught up on bills, and buy my daughter new clothes, and go out a few times. this year it paid my bill for school so i can re register. we are planning to use my fiance's money to pay rent for a few months and some car payments so we are ahead on those. so when money gets tight again we won't lose either. We were both in school full time last year so we qualify so lots of tax breaks.

It's a bad idea to set your exemptions so that you get a *hefty* return in the first place!
(I asked this same question last year around tax time, I believe.)
That is YOUR money! If you're getting a large refund, then you're living without a significant amount of money in your paycheck each week/month.
Your filing exemptions should be changed so that you break even at the end of the year.
We've got that exactly spot on now.
So we break even. And WE invest and save our money. We don't use the Federal Govt as our interest-free savings account. Very unwise.
If you get all that you EARN in your pay then you can:
1. Invest in an account that actually earns *some* interest.
2. Afford to buy what you need throughout the year, therefore eliminating the urge to splurge when you get YOUR money back.

A *hefty* refund is nothing to be proud of--it's just poor financial planning and poor financial management!

***ETA*** Could YOU use an extra $400/month in your pay? If you are getting a 5K refund, and adjust your withholding staus, that could mean an extra $400 per month in YOUR pay! That can be position-changing for a family or single mother!

Not anymore :-( but we used to. When we did get refunds it would be spent before it even hit our accounts, usually to catch up on bills that we hadn't been able to meet with our regular budget or for a vacation or large purchase that we needed (furniture, etc.), but it was because we were using my withholdings as sort of a forced savings plan. We wouldn't buy things that we didn't need or hadn't planned on spending on.

A few years ago we decided that it was better to stick to a tighter budget and either pay down our debt or force ourselves to save for big expenses without loaning money to the US govt for free all year, which is what you do when you get a refund. This year we actually owe because my husband is self-employed and we under-estimated his taxes. I hate owing!

Edited to add...people really don't get what a refund is, do they? If you are living paycheck to paycheck and money is tight yet get a $5000 tax refund, that means that an extra $96 has been taken out of your paycheck EVERY WEEK for a year. Someone in that situation could have an extra $416 PER MONTH to pay bills and avoid accruing debt, which comes with hefty interest. Seriously, if you're living hand to mouth but getting back a huge refund, adjust your withholdings so that you can pay your bills and build emergency savings. Have the difference between your "old" and "new" paychecks direct-deposited into a savings account or use it to replace regular expense that you are charging to a credit card. You can put more deductions in your paycheck than you actually have so that you get the right amount withheld - at one point, I was claiming 7 deductions even though we only claim 3 of our 4 kids because that got the correct withholding so that we didn't overpay throughout the year.

We have not gotten a refund in over ten years. We usually have to pay in a little bit. Anyone that gets a refund should not be rejoicing, they obviously do not understand how the system works. All a refund is, is the money back they let the Government borrow interest fee. They need to adjust their withholding by the amount they are getting back. That way they get to keep more money in their paycheck.

Lisa

With momof3girls on this one. We do whatever we can NOT to get a tax return. Any time we have gotten a return of any sort, my hubby gets especially frustrated (it has happened twice in the past 12 years). We don't like giving interest free loans. We found out yesterday that some changes in the tax law mean we will get a return this year. My hubby went in immediately to change his with holdings.

If you get a big tax refund then you are having too much withheld from your taxes throughout the year or you somehow qualify for some type of federal "credit" program. You would be better to adjust the the number of dependents on your withholding so you don't keep paying out so much. Maybe consider taking that extra cash each month and putting it directly in a college savings program for your children.

Yes - pay the bills.

I have been trying to not get a refund for a few years now. :) One year I had a child, one year I bought a house, and I even increased my deductions again last year and still got a bigger refund! The money that I do get usually gets split up into fourths. One fourth towards bills or extra mortgage principal, one fourth toward long term savings (my IRA and my son's 529 plan), one fourth toward short term savings (my regular savings account), and one fourth towards something fun. I'm only getting back about 2 grand this year, so it's not like I have a ton to spend. I like to take a little and do something fun, either with a purchase or some kind of small trip, because it's hard to put all of that money away every year and not have any fun at all. I agree with you that some people do need to manage their money better. It annoys me to no end when people complain about being broke all of the time, yet they shop for new clothes every weekend and go out to nice dinners 2 or 3 times a month. If you're that broke, stay home!

We are maxxed out on our withholdings & we still get a large tax return. If possible we would choose not to get a return but until the IRS changes their guidelines we cannot bypass getting a return. We saved it for several years to finish our basement. Now we are applying it towards my husbands new car.

Before I was married, I was a very young single mom & grew up very poor. I couldn't believe I had $4,000 each year. I really could have used the money but I opted to save it & used it to build my very 1st house at the age of 22. But all my friends splurged on everything but saving it. They regret it now that they are pushing 40.

The feeling of being responsible with money is better than any shopping spree, IMO.

Hubby and I haven't gotten any $ back in about 10 years, we have had to pay, ick!

~ We are hoping to actually get a refund this year, hubby took a 30%pay cut and hubby has dissolved his Internet company so (knock on some wood) we might actually end up getting a refund instead of paying this year! If we do get a refund we are going to blow it on a new living room TV, woo-hoo!

*We deserve to have some fun with our $, we have NO credit card debt, payed off our Suburban this year (early no doubt!) and have the mortgages on our house and our rental house paid up a full year in advance.
So, please don't judge me and my hubby when we are out there with the rest of America blowing OUR tax return, you might not know everyone's full story?!

**Fingers crossed we don't have to pay this year...

On our end we are paying bills ahead for a few months, adding to our savings, purchasing a low economic car that is not a gas guzzler, investing in a deep freezer to cut the grocery bill and a snow blower if we can find one at a good price. Our thought this year is how to lower our monthly bills as much as we can.

My W4 is set up to where I get most of my money each pay period on my paycheck rather than the government getting it and me waiting on them to send it back to me. I'd rather put money in MY savings account and gain a little interest. I got money back from the state this year, just enough to pay the feds and it left me with a teeny refund that we used to go have some steak and lobster and a movie. So, I guess we did "splurge" ours :)
It's your money to use as you wish, you earned it right?
I know most people play the waiting game for that check to come in and depend on it for bills. I've been in that position before when I was young and didnt know any better. That big return would come in handy and always just in time. Managing your money throughout the entire year is the smarter way to go, we all learn that eventually.... and especially when you dont have any kids for deductions anymore :)

Yes we receive State & Federal taxes back we have never owed them money since I don't work my husband has always took out extra in his paycheck for me not working (just incase they didn't take out enough).We put it all in savings,we don't have any debts to owe so that money will be used in case of emergencies,or when we need it.
I don't see blowing it all,why would people do that ok I can see people doing it because they have waited for money to come their way from loss of employment,need food in the cupboards & clothing on their back & that extra boost to get down their debts or to pay off something.But other than that just to go out & buy needless things noway my husband worked to hard for that money & we will enjoy it when it is time to spend it.

I LOVE all these answers cause I have been trying hard to NOT get a return but over the course of the past few years we have had major changes in our lives, delivery of 2 more children, new house & now we are landlords. One day I will figure out how to adjust my withholdings so I can break even.
I like to pay bills ahead because your “suppose” to have 6 months paycheck in savings but this is a temptation for my spouse (he is a spender) I would rather be debt free then going on a spending spree. I however have seen the pattern time & again. Most people who do this, however, don’t have a concept of financial planning and even if you explained it to them they wouldn’t get it

We are currently using ours to pay off old debt. My husband and I both made some mistakes with credit cards, so when we get our return we pay off one major bill.
Once we get all of that taken care of, we'll use our return to buy the things that we NEED like new appliances, or to pay off one of our vehicles.
We do take a small amount and put it toward a family stay-cation. Usually no more than a $250 goes for that.
I would eventually like to put half of it in savings and not touch it at all.
I do know a lot of people that go crazy with their return. They buy, buy, buy, buy and then go "What happened to my money?" I know a lot of folks that use their return to buy the big ticket items they need, but can't afford otherwise.
Always remember that you don't walk in these other people's shoes. You have NO idea why they bought what they bought. Perhaps there was a need there that you're not aware of. After all, it's their money to do with as they please. As long as they're not asking you for a loan come Christmas time it's none of your business.

Denise P. is right!

If you get a hefty refund, you're not doing yourself any favors. You're letting the government take more out of your check than they should. They use it for the year and don't pay you any interest, then they give it back as a refund and you feel good about it.

It would be much better to have an accountant sit down with you to help you figure out how to break even at tax time, or maybe even pay a tiny bit. If you keep the money out of each check that the government normally takes, you can put it in the bank and make a little money on it.

i got 4000$ back this year. We put all into savings towards buying a house

We get a heafty return, but it all goes to our kids tuition for private school. They are 3 & 5 and have to attend year round...school then summer camp because we work. The total tab comes to $24,000. Ugggggggg. Thankfully we can cover close to 1/2 of that with taxes. Other wise they would be in Public schools :)

I think most people blow it! And I think that's silly. We don't get a lot back, a decent amount that we could blow, but typically do not. We usually put ours into savings and it's gets widdled away at through the year for emergencies or unexpected expenses.

This year, we're making a lump sum payment on a student loan with the whole thing in hopes of having the loan paid off by years end. Now more than ever, we feel the urgency to stop acquiring stuff and be debt free with a comfortable emergency fund.

We usually use our tax return to pay off any debt we have from the previous year. If we don't have any debt we buy a few things for us and then put some money into fixing up our home and the rest into savings for a rainy day.

Yes we usually get a substantial return, both for business as well as personal.

We opt NOT to received the money back into our checking/savings account for the business. On our business account, we opt to apply it to the next year's taxes. We like this option better than ending up owing IRS, especially with a multi-million dollar business. My husband is very much a numbers/business man, Duke MBA grad and knows how to manage business finances well. This approach is used often with businesses such as ours and it is completely supported by our legal and financial counsel.

As for personal, we roll that straight into our retirement accounts. We live debt free and quite comfortably and we attribute that to staying debt free and saving wisely.

I got $5000 back. I put $4000 into savings, 1 month worth of bills into my "bills" account and the little left over into my regular checking account to spend however. I bought my daughter her entire summer wardrobe and two new pairs of pants for work with that money left over. I try to do this every year because I do work paycheck to paycheck (LONG story) and money is very tight. Having it in savings helps throughout the year with things that come up like car repairs, etc. Would I like to just spend it all? Yes! But, that is not an option.

Since our daughter has been in college we have been getting large refunds, we have tried to adjust each year, but we are fortunate that she is a great student and is good about applying each year for grants and scholarships.

But we do not always know what and how much she is going to receive so it is hard to adjust our withholding.. anyway, we always set it aside for the next school year for the other expenses that come up for her education.. The travel, the books, different fees, She needed a new laptop after 2 and a half years.. etc..

In the past when we have received a refund, we spent a little on the things we needed and saved the rest.

When I was single and working I had everything set up so that I didn't get a refund. My husband prefers to get the refund so he has a lump sum for spending or saving. This year we got a substantial refund (since we had a second baby). It is in our savings account. We intend on spending some and saving some. Our only debt is the mortgage so we feel we can afford to each splurge on a new item for ourselves (within reason of course, no more than $500 each but we are both so cheap it will probably just sit in savings) and a new swing set for the girls.

We get a tax return every year and for the most part we use a small amount of it to purchase something we both want or use it to get something we need. For example: Last year we used some of the money to redecorate the dining room and this year we are getting an elliptical machine. Then the rest goes to paying off debt. This year we are paying off a series of medical bills and at least 1 credit card. The rest will go into savings.

mine is spent differently every year. Generally we need the money, it's how we pay off any credit card bills we have, make home repairs ect. But we do spend some of it. This year we replaced the tires on my car, paid the year of insurance on the vehicles, paid a portion of our student loans (we are both still in school so we don't have to make payments yet, but I like to when we can) paid off all the credit debt, bought a new dinning room table that actually seats all of us, as well as a recliner and coffee table (things we didn't have) bought ahead on some things for the baby, like a new car seat for when he's out of his carrier. the rest is in the bank for bills and such because I feel better if we have extra money sitting there. My husband was laid off 2 years ago and that cushion kept us afloat for a year while he found a decent job. By about July it will be gone, but my ex husband is behind on child support so I get his return around that time.

and because it's been mentioned, not everyone gets a hefty return only because they have extra taken out of their checks. We get deductions for school as well as the kiddos and get a very nice return even though my husband actually has the bare minimum taken from his checks.

I personally have always viewed tax returns as paying too much to the government. I usually owe a minimal amount and handle all of my own money instead of the government.

It depends on the year. We're more like you are. Last year we put the money into our credit line. One year we bought a giant TV though...

I haven't read all the responses, but we save our return. We also get a sizable return, which is completely beyond our control. The way my paycheck works, there is no way for me not to give the government a "free loan" which I am also not happy about. The return is money I earned through hard work, unfortunately I don't get to use many tax credits. I am just receiving that portion of my pay late. We choose to save the money and use it as repairs need to happen.

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we were all excited thinking we were finally going to get to replace our shower and be able to use it again in our master bath, but the day, literally, that we found out we were getting a return, our hot water heater went out. Grrr!!!

My husband is the only one working and for many years his work did not take out taxes so we always owed. Now that we have a 2 1/2 year old and he claims me since i dont work we finally do not owe the IRS any more money thank god. And this year his work just started taking out taxes and we will have baby #2 come in Sept. We have all our bills paid and all our credit cards paid for. So next year we are going to buy our 1st home with the help of our in tax money we get back for a down payment. We wanted to have no debt before we buy a house and we are only 28 and 22. But we def. arent going to blow our money:)

I'm on the side of those who don't 'want' a huge return because of loaning the gov $, interest free.

As for how much we get back and what we do with it...

Even with one kid and buying a house and with our deductions, we would actually owe $$ if it weren't for the credits of daycare, child credit, etc... we would have owed $100 but with our credits we are getting back almost $2500. So I don't feel like we are giving the gov anything interest free because we didn't pay them the $ technically.

We have decided to use the majority of our return toward buying 3-4 new windows for the house (we are getting a few done at a time when we have extra $) and using about $100-200 for each of us to do something fun with it.

My husband and I just had our "blowout" shopping trip today with some of our refund money....it was several hundred dollars worth of laundry/dishwashing detergent, tp, household cleaning supplies, bathroom toiletries, socks and underwear for the whole family, etc...and we bought a year's worth of everything all at once....

Some is saved and some is spent but (IMO) not blown...preschool tution, car insurance and homeowner's insurance are paid in full for the year, if we have any credit card balance then it is paid off as well. In the past we have used a portion to pay for a family vacation, this year we are paying to have a baby....

What money we do get back we put it in an account and use it towards unexpected bills. At the end of the year (the following tax return year) We then take what is left over and put it towards savings or toward something that we are saving up for. ie deck, finished basement. I agree there is no point in going out and blowing all of it in a short amount of time unless it is towards bills or other needs, not wants.

Every time we get a refund its spent before its received. We have debt that needs to be paid.

I know a lot of people who blow their tax return, but they're usually the same people who charge more than they can pay off month to month and are constantly rack up debt. A close friend of mine is having trouble with her college loans because her father (who cosigned for her) just declared bankruptcy, then got all new furniture from a rental place. Some people just cannot handle money.

My husband already calculated what our return will be, and we're going to put some aside, and use the rest of some much-needed home improvements. That said, we're usually pretty strict with ourselves and stay on a budget, pay off our credit cards every month, and so on.

I prefer not to give the government a free loan and so we get a small return. It usually goes toward home improvement needs and some splurge. We are good at saving and not living paycheck to pay check, so you'll never hear me complain about being broke.

FWIW, and since we are stating our opinions...that "hefty" return you are proud of is just money you loaned the government interest-free. It's not a prize won for hard work. It's you letting the system take advantage of you. I prefer not to bend over and take it from the government. It's totally your prerogative to do it that way, but it's really nothing to be proud of. You'd have more money if you didn't give it up all year because you could be earning interest on it in the bank.

We got a huge return this year.
It has nothing to do with what is taken out of our weekly/biweekly checks.
It's because we are a first time home buyer (and we qualified for the full amount and for the year we purchased we aren't required to pay it back like the people before us), our dependants, and tax deductible stuff for work. If we didn't have any of those factors we wouldn't get anything back.
So am I happy that I am getting a return...yup. A good portion of it is going right back into our house, the rest we are holding onto. =)

Our refund since my hubby lost his job are are getting back on our feet, is your savings for the year, usually runs about 2 months pay in the bank, Honestly by the end of the year come Dec, Jan it is usually down do just a few hundred dollars, and then new refun and savings is back. Before hubby losts his job it was put into savings and stayed (we only got two years of refunds with a child so it only amounted to about 6,000 of money in addition to other savings but it's what made it so we could get through his job loss and survive without going into debt. Now until things get back to being better it will be our additional income. This year we did tap right away into a thousand of it to pay for a few things for our new house.

I do know a lot of people who treat it as a bonus and splurg, some of which are then hurting momths later because they have no money. But they enjoy their new T.V or video system...etc

We do get about a thousand, or a little under back from the state and fedral. Most of it is because at my hubby's works they take out a certian about from the pay check, we just get some of that back. We in no means do it to get a healthy return, we are just truthfully when filling W-2 or whatever paperwork. Just happy to get something back :)

What we do is put half of it in the college fund we have started for my daughter and the other half goes towards the house payment.

We do the same thing for a yearly bonus, if my husband company is doing good, which is never a for sure thing so we never count on it. We give some to church, put some in daughter's college fund, put some towards the hours payment and then the little extra (a few hundred) we may splurge if we need something like a new tv, fridge, snowblower, clothes or something along those lines BUT only if truely is needed (like if something is close to breaking or over 10 years old) otherwise it goes in the savings account not checking account.

Our return this year is "saved" for spending at Disney in May. We have saved money as well, but this will help tremendously. We usually pay our property taxes annually with the return, but have worked out payment in another way this year. So, technically, we are "blowing" (as you see it) on memories for my five year old twin girls, before their little sibling is born (and we won't have a vaca like this for a few more years until the little one is old enough to enjoy a trip like this as well). Two years ago we remodeled our way-outdated kitchen. (we owe a bit to the state as well, just get a refund from the federal return)