Offical huge tax return thread!
Registered User
iTrader: (7)
Joined: Oct 2008
Posts: 451
From: San Jose, CA
Car Info: 2002 WRX (RIP) // 2007 STi "OMGASTI"
done with taxes and getting enough for ideally an accessport v2 unless a v1 comes up in the classifieds and if enough, a downpipe to go stage 2 and save some money also
VIP Member
iTrader: (3)
Joined: Nov 2002
Posts: 4,074
From: BAIC Wagon Clique
Car Info: '02 WRB WRX Wagon
Simple answer, more money in your check by claiming 1. 0 means the government takes the maximum amount of money in taxes from you that you get back at the end of the year.
That number is the withholding exemptions. Basically, the IRS takes out a small amount of taxes out of each paycheck. When you put 0, its basically telling the IRS to take the maximum amount. For most people, this will result in getting money back when you file your taxes because the government needs to get paid, and they ensure that by taking a little more than you are projected to owe.
If you are single/non-homeowner/no other tax writeoffs, then you usually want to put 0 or 1. If you put 1, you'll get a little more in each paycheck, but less back at the end of the year. Even with 1, your still likely to get a little money back. I used to do 2 when I was in that situation, but then I always owed come April 15th. Not a lot, but I'd definitely owe some money. Personally, I like owing a little each year, rather than getting a fat check back. I'd rather save/invest (or spend) my money during the year rather than get one big check at the end of the year. Your situation may vary based on a lot of factors, so if you just started working, claiming 0 exemptions is not a terrible while you figure out what's going on.
If you are single/non-homeowner/no other tax writeoffs, then you usually want to put 0 or 1. If you put 1, you'll get a little more in each paycheck, but less back at the end of the year. Even with 1, your still likely to get a little money back. I used to do 2 when I was in that situation, but then I always owed come April 15th. Not a lot, but I'd definitely owe some money. Personally, I like owing a little each year, rather than getting a fat check back. I'd rather save/invest (or spend) my money during the year rather than get one big check at the end of the year. Your situation may vary based on a lot of factors, so if you just started working, claiming 0 exemptions is not a terrible while you figure out what's going on.
That number is the withholding exemptions. Basically, the IRS takes out a small amount of taxes out of each paycheck. When you put 0, its basically telling the IRS to take the maximum amount. For most people, this will result in getting money back when you file your taxes because the government needs to get paid, and they ensure that by taking a little more than you are projected to owe.
If you are single/non-homeowner/no other tax writeoffs, then you usually want to put 0 or 1. If you put 1, you'll get a little more in each paycheck, but less back at the end of the year. Even with 1, your still likely to get a little money back. I used to do 2 when I was in that situation, but then I always owed come April 15th. Not a lot, but I'd definitely owe some money. Personally, I like owing a little each year, rather than getting a fat check back. I'd rather save/invest (or spend) my money during the year rather than get one big check at the end of the year. Your situation may vary based on a lot of factors, so if you just started working, claiming 0 exemptions is not a terrible while you figure out what's going on.
If you are single/non-homeowner/no other tax writeoffs, then you usually want to put 0 or 1. If you put 1, you'll get a little more in each paycheck, but less back at the end of the year. Even with 1, your still likely to get a little money back. I used to do 2 when I was in that situation, but then I always owed come April 15th. Not a lot, but I'd definitely owe some money. Personally, I like owing a little each year, rather than getting a fat check back. I'd rather save/invest (or spend) my money during the year rather than get one big check at the end of the year. Your situation may vary based on a lot of factors, so if you just started working, claiming 0 exemptions is not a terrible while you figure out what's going on.
You get about the same amount either way.
Registered User
iTrader: (25)
Joined: Jan 2004
Posts: 2,325
From: san francisco
Car Info: 2008 Forester XT 5spd
Not sure exactly what I'm gonna get back this year, but what I try to do is figure out "what I claim (in both state and fed)" to get a return that either breaks even, or is within $1000. The philosophy that I've adopted is if you have any outstanding debt(like us) with an interest rate (car, credit car, school loans, etc.), then I want to get the maximum amount of cash, without owing anything or getting just a little back in returns at tax season. With debts you have interest to contend with, and breaking even at tax time means I'm letting my money work more efficiently to get me out of the debt hole. If I'm getting a small check and a huge return, the gov. is using my money for their purposes, meanwhile my interest rates are continuing to compound my debt.
Over the past few years, this philosophy has aloud my wife and I to kill all credit cards, almost all school loans (my BS, wife's Masters), and car loan. All that is left is the mortgage (eek) and the wife's car (under 6K).
Well, this is what has worked for us.
Over the past few years, this philosophy has aloud my wife and I to kill all credit cards, almost all school loans (my BS, wife's Masters), and car loan. All that is left is the mortgage (eek) and the wife's car (under 6K).
Well, this is what has worked for us.
But the most valid point (with the exception of making people pay taxes monthly):
...right now interest rates are abysmal. If you're getting $1500 back you're losing less than $15 in interest... IF you would have kept it in some medium yield liquid account. Most who would have kept that in their checking account are losing like three bucks year off that interest 
It's really not a huge penalty to have a big return right now. Maybe once the gov't can no longer hold interest rates artificially low and they start skyrocketing...
It's really not a huge penalty to have a big return right now. Maybe once the gov't can no longer hold interest rates artificially low and they start skyrocketing...
Thread
Thread Starter
Forum
Replies
Last Post