February 19, 2018, 06:54 PM
SRGot your tax refund yet?
quote:
Originally posted by Skins2881:
$20 is worth my peace of mind.
I honestly don't care what people do but, for folks new to all this, thought one point was worth tossing out....
$20 is really a big understatement of the opportunity cost on a $4,000 intentional tax overpayment - especially given last year's growth in the stock market. Adjust your withholding and direct the $4,000 as an auto deposit into an investment account. The money will be waiting for you if you do happen to owe a little something at April 15th.
February 19, 2018, 06:57 PM
SRquote:
Originally posted by chongosuerte:
The argument to give the government extra so one can get a refund later ignores two issues:
1. What if someone files a return fraudulently in your name, a common issue leading to a HUGE mess for you to clean up before you can hope to get any money back from the government, and
2. What says the government has to give you the refund, or when? I'd rather not have to depend on them to give back what was mine to begin with. It works great, until it doesn't.
Great points.
Anybody from Illinois? That state has been known to just not pay refunds to corporations that overpaid (or take years to get the refund paid). Maybe they pay refunds to individuals - since corporations don't vote.
February 19, 2018, 11:13 PM
DMFquote:
Originally posted by PeterGV:
I work it out so I get a whopping refund (like $20K) every year. And every year I treat it as found money. And every year the wife and I are happy to get the direct deposit.
My 401(k) is already maxed, including catch-up. So it would not otherwise go to retirement savings.
The $20K gets spent on “stuff” in the few months after we get it. Household repairs, whatever. I consider it enforced savings for the year.
I realize I could do a bit better if I put the money in VWINX or something. But then there’d be risk. Sure, I’m losing interest and inflation... but not every financial decision can be 100% rational.
I missed this before. Despite maxing your 401(k), you could be putting an additional $5500/year into an IRA (Roth or traditional), and $6500 if you're over 50.
Again, as chongosuerte first pointed out, there are additional risks associated with the free loan you're giving the government.
As for VWINX, IMHO you're better off in VTSMX, or better yet, VTSAX (which you could get into with one year's refund), as historical returns are consistently better, and expenses are much lower.
