What are you going to do with your Tax Returns?

[Shikarnov]

Thanks to the First Time Homebuyer credit, this will be the first year in a long long time that I'm getting something back from Uncle Sam (or, more accurately, since it's a credit and not a refund, I'm getting something extra from all of you. Thanks!)..

Of course, now comes the question of what to do with the extra dough... After much deliberation, my wife and I decided on the following:

• Buy a couch.
• Pay off two credit cards.
• Get a new iMac for her.
• Get an IRA, or pay some additional principal on the mortgage (any advice here?).

And, being the nosy bastard that I am, planning out my purchases got me thinking: what will you all be doing with your tax returns this year?

Z

 

[the 4th hanson bro]

I'm going to file mine.

Any tax refund I get will be minimal due to planning ahead. I'd rather have the money through the year than let the government use it free of charge until they send me my money back.

 

[Sakrysta]

Save toward paying my property taxes.

 

[TheBrew]

Going to Vegas.

 

[SpockWeed]

Out of the choices you listed, you should pay of the credit cards unless you wife needs the iMac for work and will help her earn more money.

In my case, my refund goes to my property taxes as that how I have planned it the last few years. I'm terrible at saving so I overpay during the year.

 

[Shikarnov]

I'm going to file mine.

Any tax refund I get will be minimal due to planning ahead. I'd rather have the money through the year than let the government use it free of charge until they send me my money back.

Me, too, usually. As I said, though, this is a credit. So it's gravy over the top (which is actually stupid since people that can afford to buy a house probably aren't the ones that need a hand during these trying times).

Save toward paying my property taxes.

I thought mortgage companies were supposed to handle that?

 

[Mr. Laser Beam]

Save toward paying my property taxes.

I thought mortgage companies were supposed to handle that?

They are. At least that's what my bank does. I thought that was common practice.

As for my tax return: Uh, yeah, I think I'm gonna file it. I usually get a refund, though I don't plan on doing anything special with mine - I haven't got any large, major purchases planned. Perhaps I will put it towards my ultimate goal of collecting all World Series DVD sets (there are about a dozen that I don't have).

 

[Sakrysta]

Save toward paying my property taxes.

I thought mortgage companies were supposed to handle that?

They are. At least that's what my bank does. I thought that was common practice.

I inherited my house, so I don't have a mortgage. Which means I don't have a mortgage payment. I just have to make sure I save up throughout the year.

 

[Mr. Laser Beam]

^ Oh. Okay then. Didn't think of that.

My accountant's got it easy. I have a rather simple tax return to file. I'd almost do it myself (I did major in accounting in college) but I figure if I get audited, I can get my accountant to represent me. Plus it's easier to hand him the forms and say "Work it out", then not worry about it anymore.

I must admit that I gotta give the government props for pushing that 'Making Work Pay' credit through. Now I'm not having as much withheld from my paycheck, and (if this is any indication) I won't see my refund reduced as a result.

 

[Shikarnov]

I inherited my house, so I don't have a mortgage. Which means I don't have a mortgage payment. I just have to make sure I save up throughout the year.

I just took did a 180 from empathizing with you to envying you.

I still have 29 years and 9 months left on my mortgage (although my plan is to have it done in around 12 years -- assuming no kids or other catastrophes rock my budgetary boat).

 

[Mr. Laser Beam]

^ The upside to having a mortgage is that the interest payments are tax deductible. So even if I won the lottery and got enough money I wouldn't pay the whole thing off at once.

 

[Dingle Fritz]

Put it twords fixing up my daily driver. It's got 199,500 miles on it. Body is sound, engine is sweet, the transmission is sixteen kinds of fail though. Replace that and I can get another hundred thousand out of it.

 

[Shikarnov]

^ The upside to having a mortgage is that the interest payments are tax deductible. So even if I won the lottery and got enough money I wouldn't pay the whole thing off at once.

I forgot about the tax deductibility of the mortgage interest. I wonder if you can refinance near the end of your mortgage, improve the house with the credit, and continue deducting interest for another 30 years. Or if it'd be worth it to do so...

 

[Mr. Laser Beam]

^ I think refinancing is overrated. It's usually not worth the hassle.

 

[auntiehill]

My return? I file it. The IRS is funny about those things.

My refund? Most of it will go into savings. I'm hoping we can use some of it to replace the floors downstairs.

If I were you, I would most definitely pay off the credit cards. That seems a bit of a no-brainer to me. The interest on those cards can accrue like you wouldn't believe and it can completely bury you before you know what hit you. I used to work for a credit card company--I saw that sort of thing every day.

However, if you literally have no place to sit, then buy the new couch, IN CASH. Or, if the laptop is work-related, you could buy that and maybe claim it as a business expense.

 

[Mr. Laser Beam]

Why do they call them tax RETURNS, anyway? We're not returning our money to the IRS, they're just taking it first.

 

[Jetfire]

I got to put it in my bank account and save it...my balance is 0...Checking & Savings. Until I can get a job I need to be very careful how I spend any extra money.

 

[Shikarnov]

Re: What are you going to do with your Tax Refund?

Out of the choices you listed, you should pay of the credit cards unless you wife needs the iMac for work and will help her earn more money.

If I were you, I would most definitely pay off the credit cards. That seems a bit of a no-brainer to me.

I think I might have been misunderstood somewhat. The bullets in my original post are not options, they're all part of the plan. First time homebuyers get an extra $8000 credit from the government, on top of whatever other refund was coming.

And thanks to everybody for pointing out my erroneous thread title. I should have said Refund, but it seems too late to edit it.

 

[Mallory]

Any tax refund I get will be minimal due to planning ahead. I'd rather have the money through the year than let the government use it free of charge until they send me my money back.

Same here.

 

[Robert Maxwell]

I actually put my federal exemptions down on my W-4, and I'm still going to get a refund. Go figure. My wife will get the federal so she can put it down on a vehicle. She was buying a used minivan, which crapped out, so the dealer gave her a different one (that cost more money!) and it crapped out today. So, she has had it with these people, and is just going to get a vehicle from someone else.

I didn't put down any exemptions on my state taxes, so I will get a lot back from that. I didn't know how bad taxes would be once I moved to NJ, so I didn't want to take any chances. There are a few things I need to do with it, but I'll probably have enough left to buy a computer and some music equipment.