From: Snowflake, Arizona
I don't get refunds (or I get them every month anyway. Wouldn't you want $55 more a month instead of giving the government a free loan of $675 as you do? I pay between $200-300 every year and up till that time I'm not only making more (it evens out afterall) per month but I'm also able to draw interest off of it (such that the government is almost giving me a loan, in a sense). I used to do it the way you speak of it, but doing the math I saw how I got ripped off that way. All getting a large sum in one lump does, or so it seems, is feed the mentality that it is some sort of weird bonus, when in fact it's just filing the W2 badly. Doing this, of course, often just leads people into blowing it as though it's some sort of gift anyway. Having to pay some back at the end of the year, little as my totals may be, does quite the opposite, as it encourages thrift.
I'm not sure my employer would allow me to claim such a high dependant on the W-2 but I have heard of people that paid no tax and at the end of the year paid the entire amount (now that encourages ultimate thrift). I could actually pull this off pretty easily if my finances continue to hold up as usual, but as I say I'm betting my employer won't allow it. Sure would make for some swelled paychecks and extra interest!
This was the first year since my divorce that I wasn't a poor student collecting the Earned Income Credit for my kids. I had no tax withheld and then collected a $4,000 refund from the EIC for being part of the "working poor". Of course, now I am facing the real world for the first time in a few years. This time the witholding through my school district is quite painful and I wasn't even sure if I wouldn't be paying this year due to part of the year being in a student job at IU and half as a teacher. I'm happy to have the refund!
I'll probably consider adding a phantom dependent on a W-4 to reduce withholding (my kids are all grown and on their own as of last year).
Anyway, good advice!
Love & Peace,
Far Dareis Mai
My old Piczo site seems to be gone, so no more Navajo Nation pics :(