I owe the IRS $4,000

[Coach]

Another tip.

If you work and get W-2's, withhold more than you normally do, if you are able to. Yes, it doesn't accumulate interest at all, but it's another safe avenue to pay/lower your tax bill once the new year comes around.

If it's 1099's, then well, not much you can do about that one. But you can try to lower it by putting some of the money into Self-employed SEP, SIMPLE, and qualified plans, which would be an deduction of your income.

[Mennonite]

Originally Posted by Coach

Another tip.

If you work and get W-2's, withhold more than you normally do, if you are able to. Yes, it doesn't accumulate interest at all, but it's another safe avenue to pay/lower your tax bill once the new year comes around.

This seems like terrible advice. You're basically giving the government an interest free loan in exchange for what exactly? You end up paying the same amount in the end, and you could have used the income you prematurely forked over to invest in something that could have actually made you money.

[DaFace]

Originally Posted by Mennonite

This seems like terrible advice. You're basically giving the government an interest free loan in exchange for what exactly? You end up paying the same amount in the end, and you could have used the income you prematurely forked over to invest in something that could have actually made you money.

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

[lewdog]

Originally Posted by DaFace

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

This guy gets it.

Unless you are leveraging as much money as you can day trading in the stock market, the "interest" amount you may miss is negligible for almost everyone. I always end up with a small return each year (This should be most people's goal as breaking even is tough to calculate). It's WAY better than owing any amount of money.

[BryanBusby]

Originally Posted by lewdog

This guy gets it.

Unless you are leveraging as much money as you can day trading in the stock market, the "interest" amount you may miss is negligible for almost everyone. I always end up with a small return each year (This should be most people's goal as breaking even is tough to calculate). It's WAY better than owing any amount of money.

It's not a big deal to end up owing money as long as it's a number South of $1,000. Always paid in more money in April when I was single, but it was always a trivial amount like $300.

[Mennonite]

Originally Posted by DaFace

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

And I despise people so foolish that they can't handle their basic household finances and let the government hold their hard earned money with no ROI.

Why not just tell the dude to stick his money in a Mason jar in his backyard?

[Buehler445]

Originally Posted by DaFace

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

The other side of it is that only applies if you would have saved the money. If you would have just spent it on bullshit consumables anyway, it’s a net gain. I know that’s not shot people want to admit on the internet, that they are incapable of saving but it affects a lot of people.

Originally Posted by Mennonite

And I despise people so foolish that they can't handle their basic household finances and let the government hold their hard earned money with no ROI.

Why not just tell the dude to stick his money in a Mason jar in his backyard?

I hate to break it to you, but you despise a giant swath of the population.

After doing it awhile it is remarkably how otherwise normal and in some cases truly successful people have virtually no handle on business.

It’s one thing to suggest that it is dumb to take that approach. But to just stick your head in the sand and pretend that it doesn’t improve a massive amount of people’s lives is just incorrect.

I’d bet you’d be surprised how many of your friends and neighbors are incapable of doing what you suggest.

[Mennonite]

Originally Posted by Buehler445

I hate to break it to you, but you despise a giant swath of the population.

I can't argue with that.

[Coach]

Originally Posted by DaFace

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

Especially the fact that interest accumulates daily.

[Bugeater]

Originally Posted by DaFace

I always despise this take. Yes, it's technically true, but unless you are overwithholding by thousands, you're losing like $20 in the interest at most. That's well worth it to avoid the possibility of big bills come tax time for many.

I don't see the issue so much as money I could have had for myself as much as giving the gov't something for nothing. They get more than their fair share as it is.

[Coach]

Originally Posted by Mennonite

This seems like terrible advice. You're basically giving the government an interest free loan in exchange for what exactly? You end up paying the same amount in the end, and you could have used the income you prematurely forked over to invest in something that could have actually made you money.

With the refund back, you can fork it over to invest in something that can still make you money.

Again, it's not for everyone, I understand that. For me personally, it's just a simple strategy for me that I'd rather pay my taxes/bills first and not get absolutely murdered with interest and penalties. Those are a killer, especially if there are tax law changes for federal and state.

Then whatever left I get back, I move it over to my retirement or funds to garner more interest back.