Posted on 12/23/2015 8:36:17 AM PST by Maceman
Because they have the guns and we live in a totalitarian state.
Things will not get better until the federal government is gone.
I don’t worry about it. I usually have a federal refund that’s somewhere around what I owe the state. Very rarely do I net anything more than $100 back after that math works out. It’s hard to get it any closer without additional paperwork that would cost me more than the lost opportunity to earn 10 cents on that $100.
I under pay every year (90% no penalty) for an interest free loan from Uncle Sam.
My per peeve is the EIC
Because adjusting your withholding so it is correct is your responsibility, and it’s simple to end the year with zero balance.
“Study the rates, your situation and make a better claim on deductions. It isn’t that hard.”
Absolutely correct.
Some people use it as a savings account for SURPRISE money after filing taxes. As long as you don’t mind not getting interest that’s fine.
But, really, it isn’t that hard to figure out a withholding level that will work out to just about what you would owe.
For a very large chunk, the "refund" they get is actually from tax credits, usually on top of the refund of any taxes they may have paid in. Even adjusting withholding won't affect the tax credits for them.
I have long felt that there are only two simple steps required to restore sanity to government:
1. Make income tax withholding illegal. You have to write a check for the whole amount every year, and
2. Move election day to two weeks after tax day.
3) Ban air conditioning in DC.
I did get interest once but that was a long time ago - back in the sixties. I had filed in February and nothing had come through by September, despite numerous letters to the IRS. But then I wrote one letter to my Congressman and the problem was solved.
I no longer have the letters but it was almost comical. The first letter I received was a copy of one from the Congressman to the Secretary of the Treasury. The next day I got a letter from him (SecTreas) with a copy of his letter to the Director of IRS. The next day brought a copy of a letter from the Director to the manager of the office that issues refunds. Finally, on the next day I received my refund - with interest - and a letter of apology.
My wife (at the time) threw out those letters. I should have divorced her for that rather than waiting for her to find a boyfriend
The logic is this: you are not loaning the government money. Rather, you are being re-payed the overage. Since you can/could adjust your with holdings to near zero. then you are VOLUNTARILY asking the government to with hold more than the required amount. Thus, it is not a loan and thus no interest is required.
The rules don’t apply to the people who get to make the rules.
You appeal the assessment.
Yes, you can’t do that because payroll taxes are due quarterly. You could deposit them in an interest-bearing account and then pay them quarterly with the quarterly form you are supposed to send in. That’s basically what your employer or payroll company does anyway, if you are not self-employed.
“If you take into account a real interest rate on the money you get in the early years...”
Except we haven’t had “interest rates” to speak of in what, almost a decade now? There’s really no telling if the Fed will ever let us have significant interest rates again. I suppose economic forces might eventually force them to, but we could all be bankrupt by then.
Interest of refunds is based on Federal law - 26 U.S. Code Section 6611 (https://www.law.cornell.edu/uscode/text/26/6611).
Basically, the IRS has 45 days to process your refund. If you don’t get it within that time, they will pay interest.
You are correct about the interest rate and the fed, but I should have said "rate of return".
Most years, but keeping money in an index fund, I come out way ahead by not paying estimated income tax, just pay the penalty with the final return when it is due. This year has been poor in the stock market, so I am going to lose out, but over a long period of time it has averaged out to be a pretty good bet to do it the way I describe.
As long as you don’t mind not getting interest that’s fine.
Not getting any interest anyway.
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