What's everyone's plans for their Tax Refunds?

[Frugal Nurse]

Jan 15, 2011 12:41:53 GMT -5 chiver78 said:

Jan 15, 2011 9:04:39 GMT -5 Frugal Nurse said:

I have looked into an individual short term disability plan, but in my state, none of them will cover maternity-related disability (individual insurance plans also will not cover maternity. Apparently in Kentucky, maternity is only covered for married people).

do they think being married is the pre-requisite to finding yourself pregnant? sounds like a sex-ed course should be required for the insurance industry down there! hugs, frugalnurse

Haha, those were my sentiments exactly. Then again, nobody ever boasted that ANY kind of education in Kentucky was up to par, especially sex-ed (having multiple babies by the time you're 21 is the norm down here!)

[The Home 6]

Twinmama~I'm going to buy an entertainment center as well! After not having one for a year and a half, it is about time! I might buy a nice couch for our living room, but am still thinking it over. I'm trying to decide if we don't use the living room because we don't like it, or because there isn't a couch in there...

I'll tell you what we are NOT going to do with our tax refund this year. We are NOT going to give any money to my sister-in-law for a truck like we did last year. Hopefully DH is onboard with this.

[Deleted]

Between state and federal, I usually get about $500 back. I'd like to pare that down a bit further, but I would really rather not owe each year. I like getting a little reward for doing my taxes. This year it may be a new handbag with the rest going to savings.

[shelby]

I will get $7965 back and it is not because I was over paying, I just get a ton of credits for being single head of household with 3 dependants. $4000 to debt which will be totally wiped clean, the rest to my EF which currently is zero. I want a new couch too but might not be the best idea for now.

[steph08]

We will get a fair bit back this year, I am estimating about $4k because of all the stuff we will get 30% back on for the energy savings credit (new insulation, windows, doors, etc.) and also because of the education credits for DH. I started graduate school in 2010 as well so that is even more.

We are going to pay off the last of our debt (besides mortgage) which includes DH's credit card and our ATV loan (which is scheduled to be paid off in June anyway). With the remainder (about 2k), we will paint our house and do the outsides of the windows and possible new soffit, fascia, etc. That will pretty much finish off our house upgrades (well, once DH gets around to finishing the rest of the inside! all the stuff is bought, he just has to do it). We wanted new siding but we have probably already maxed out the value of the house so it wouldn't make much sense since we will be selling in a few years (hopefully).

[telephus44]

Mostly fund the ROTH - some to EF - and we'll get something off our big purchase list (generator, back up sump pump, dining room set, etc.).

[dragon2008]

Planning on saving most of it, although I'd love to get a dresser....

Depends on how much I get back - I've taxes on a Roth conversion, so we'll see!

[doxieluvr]

Anything we may get will go directly to our debt.

[mak]

I am not sure how much we will get back, but it will all go to savings (or at least 80-90% will).

We don't try to get a big refund back, but our income is variable and tax credits confuse me, so we usually get money back due to those things. If the tax credits do not get renewed then we will/would probably break even near zero.

[mommydl]

I'm a single mom w/ 2 dependents & also own (and live in 1/2) a 2-family home, so I can NEVER get my taxes to break even with write off's and rental income but always manage a decent sized refund of 3-4k.
I take my refund and the first thing that I ALWAYS pay is my car, homeowners, and life insurance for the year. I planned the billing periods that way purposely. After that's paid, whatever is left will go into savings since I have no CC debt and refuse to make any I can't pay off when the bill comes due.
I'd really like to be able to take the kids on a vacation this summer, so I'm "looking" around...but I will disect it to death before I make a decision!

[dragonfly7]

I am not expecting much of a refund, so it will go toward renewing the vehicle registrations and annual state inspections as usual. If there's anything left, DH and I both need to visit an optometrist.

[notasbadasithought]

I honestly don't know what I'll do with our refund this year!! It will be about $1000 - 1500. I have NO debt, not even a mortgage. I will be getting a year end bonus in about March for around $3000 - don't know yet what I'll do with that either. This is totally new for me as I had CC and Car loan debt up until December! I guess I'll stick everything into savings until I figure it out. I must say, this is one of the nicest dilemmas I've every had!

[Firebird]

I wonder why people over-pay during the year, why not have an extra $250/m auto-deposited into a Roth (or something) a year earlier, and putting it where it can compound?

Because most people don't have a perfectly logical hold on their finances. If you don't manage money well, you're likely to p*ss away that $250 per month if you had it, whereas if you get it in a lump sum you might actually save it where it could compound for the next year.

For savvy money managers, naturally it's best to minimize your refund. But a lot of people have to take baby steps to a solid savings plan.

[Gardening Grandma]

just wanted to see what everyone's plans were for their tax refunds.

What's a tax refund? We'll owe between $500-$1000. I will put the check into the mail April 14 and have a drink. That's MY plan.

[GirlGreen]

Update: I'll officially be using my $4 refund to pay my $4 state tax.

[lyn421]

We will deposit $6000 from our general savings into an IRA and get back about $4000 from IRS. The $4000 will go back into our general savings. I think it rocks that we can get $6000 into an IRA each year and have it cost us $2000 (rounded figures).

[jax]

I will get somewhere in the neighborhood of $2k. I also have a nice bonus at working coming at the same time.

Both will go to just about paying off my last cc debt!! SO excited about that. Will knock it down pretty low so I should have an easier time paying the remainder off and..... saving!

[Jake 48]

We add some to the EF, will use some for hardwood floors in the upstairs

[Deleted]

We will be getting back a pretty large refund. It is hard to figure out what to plan on what we will or won't get back because I never know when DH will be deployed. He was deployed for a large part of 2010.

The refund we get will go directly into savings. Every last penny. WE have to move when DH gets back from Iraq. Unfortunately we cannot sell our house so we have to rent it out. The market won't allow us to charge what we pay for our mortgage so we will have to pay about $400 of the mortgage ourselves. I want as much in savings as possible so that this won't cause us any hardships.

[Jem0607]

Our $4-6k refund will pay the hay, corn and pasture rent bills for this winter. Someday I would love to spend it on something fun but it is nice to be able to pay those bills without squeezing it out of the regular operating budget.

[SweetVirginia]

I'm a teacher, so my refund will go toward paying bills during my summer vacation.

[financiallyfreeinbc]

ours will be going to savings. We would like to eventually buy a new hotwater/filter/pressure tank system.

[Deleted]

Refund?
I heard such a thing exists, but I've never personally seen one!

[startsmart]

I really don't know why people get mad about NOT getting a refund or owing. It means you didn't prepare. And if, like me, you'd rather die than read the tax code then hire someone to do it and plan for you.

No idea yet what I'm looking at, will certainly owe for my freelancing but I've set aside plenty for my taxes as a percent of earnings. Plus I need to pay $500 for the first time home buyer credit which was finalized all of four months before the Feds made it non-repayable.

I will work with a tax guy I know and trust, planning on $300-500 for his fee so i can maximize deductions this year and last.

So while I don't expect money back, anything leftover in my tax account will go to retirement savings, general savings or back into my business.

[phil5185]

Our $4-6k refund will pay the hay, corn and pasture rent bills for this winter.

Huh??
If you have Farm Income, why would you overpay your Estimated Quarterly Tax by $6000? Why overpay it at all - why not wait and pay it in April?

[Jem0607]

We don't pay quarterly, our farm expenses are adequate to offset farm income. DH works off-farm as well, which is the income we live on. When the cattle are paid for (in 2 years) we'll have income- til then we just think of the place as "investment" or "entertainment" depending on the day.

Most of the refund comes from EITC since the farm loss balance's DH income. We don't pay in more than 1K during the year.

[shelly527in]

My refund will pay the house insurance of about $500. If I get more than that, it will go in the EF since my teaching job is not promised next year (hired w/ a stimulus grant which will run out). Last year I got $1,300 (the most ever) and the extra $800 went to the plumber who had to put a clean out pipe in my back yard! At least I had the money to pay it!

[ners]

My plan is 50% to savings 25% to home equity loan 25% to credit card debt. After being unemployed for 5 months, taking a position that pays less, and loaning my sister money this makes the most sense to me.

[Deleted]

Jan 18, 2011 11:07:43 GMT -5 shelby said:

I will get $7965 back and it is not because I was over paying, I just get a ton of credits for being single head of household with 3 dependants. $4000 to debt which will be totally wiped clean, the rest to my EF which currently is zero. I want a new couch too but might not be the best idea for now.

Congratulations on wiping the debt clean! But you actually are overpaying and can adjust it. When I was divorced and owned a home with big tax and mortgage interest deductions, I declared 15 withholding exemptions on my W-2 even though I just had DS. Perfectly legal. I still got about $1,500 back every year.

To answer the original question: our taxes are hard to estimate because we own mutual funds. They report capital gains and losses from sales of stocks in the year they occur, so we have no control over them. Once we got a capital gain distribution of $12,000. Ouch. I mean, it was good news, but also bad news. Anyway, I try to break even. This year we're getting about $1200 back. $200 will go to our church and the other $1,000 will be used for our trip to Spain in May.

[The Home 6]

We got our state refund back before our federal (weird, right?), and I just got back from buying my new entertainment center! I am SO thrilled. I told DH I feel like we are adults now, not college students. So far, no money has gone to the in-laws, but it sounds like some is going to have to go to fix the heater in our rental house.