Tax Refund

[Faust]

Ok... I just read that the average refund for 90% of filers so far has been $3000..... my refund was $500... what did I miss?

[Red57Bird]

[BrentC5Z]

Nothing! You kept your money throughout the year vs. letting the gubment hold on to it only to return a portion.

Nice work!

[Zach M]

I owe $8

[dirtysparks]

90% of filers must not care too much about what their money could be doing for them the rest of the year.

[E.J.]

[chavez]

$8, nice! Sounds great.


I'm about to write $5000 in checks.

Good thing I bought a house, otherwise that'd be $10000.

[Corporate]

I think I am personally paying for one of those construction projects Bruky is doing. I don't remember the last time I received a refund but then again I don't like lending congress money.

[chavez]

[DCdave56]

Um Yah, I filed this year for the first time without a wife and house to write off...

I always claim double zero and get back about $5,000 each year. This year I owe about $3,000.

Ouch.

[goofyboy]

I paid $4000. I'd rather pay. hell even at 1.5% intrest i make $20 over the year. 1 case of beer for doing nothing.

[Nauty]

I am realistic about who I am. I realize that if I claimed the right number of dependents that I could get pretty close to owing zero or getting a refund for zero $, thus having my money in my pocket throughout the year as opposed to letting the govt hold it for me. However, as I said I am realistic about who I am. I know that I would completely piss away the extra couple hundred dollars I would see in my check every month. I would eat out more often or buy crap that I really don't need.

Sure, I could invest it in a low risk account and make a hundred or so dollars per year in interest. Again, I know me and that the extra money would be tapped into before the end of the year. Therefore, I choose to let the govt withhold it from my check and then give it back to me in a nice lump sum at the end of the year.

My year end bonus typically coincides with my tax refund, usually within a month of each other. The two together averages about $10,000 cash. My wife and I like getting that nice fat check(s) each year so then we can pay for a vacation in cash or pay for a home improvement in cash. This year we bought new hardwood floors for the house as well as new furniture.

To each there own, but I can live without the $100 of interest because I know that I am not disciplined enough to save it on my own. The same goes for my escrow account with my mortgage. So yeah, I'm a 90 percenter.... my refund this year was $2800.

[brew]

Writing my checks tomorrow. This time of year hurts my feelings, especially since I'm now considered self-employed. However, it doesn't hurt my feelings as badly as some of my clients.

[chavez]

brew, hurts your feelings?

[goofyboy]

I claim 0 and so does the wife. our companies take out enough if we did not combine incomes. as soon as that happens, boom, we owe. I would prefer to be at or around zero, but do not mind oweing.

[htownbdr]

I used to really hate this time of year. Then, I bought a company for the wife to have a "hobby" and it has made life MUCH better from a tax perspective.

[brew]

[Faust]

[_bruky]

[brew]

For the majority of people, I think it's best for them to over pay during the year and get a refund. It works as a forced saving that they can use for vacation, pay bills, etc. It would be even better if they would then have the refund put directly into an IRA, but that's probably asking for too much.

[arof]

[chavez]

[_bruky]

[fish6942]

[BrentC5Z]

fish6942, It doesn't matter what you choose to do or how much time it takes to do it. Just make sure a large portion of your home is considered "office". That percent gets to carry it's share of all your utilities & insurance.

[churchy]

I got a bill from the IRS last night saying that I owe them a s@#t load more for 2008. Now I need to figure out WTF happened.

[fish6942]

Brent - That's what our tax guy suggested as well. We're really leaning towards something outdoors related. With our property we are constantly buying and maintaining a fair amount of equipment (tractor, utility trailers, chain saws, commercial trimmers, tractor implements, truck, etc...) Plus we have an extra garage/shop that could be considered 100% used by the business.

Now the other thing our accountant keeps reminding us of is that the business still has to have a "profit motive". That's when the actual work component starts coming into play

[goofyboy]

does it matter how much money it makes? I have a little ebay company that i could make legit. I make an extra $3000 or so a year - not a ton, but a little something. Is that legit enough to make a business?

[brew]

[brew]

[goofyboy]

its more than a hobby. I re-sell construction equipment parts (excavator parts) for my father in law. It is all small stuff, but we make $3k or so in profit right now off of it. I'll look into it, since i have to pay taxes on the money i make from there, i should get a deductions too.

[STPHNSN23]

i'm reading wb.com instead of reading for my income tax class.... not looking forward to taking that exam.

[BrentC5Z]

brew, I've had my business going for 11 years now. Always claim my home office sq ft & space in my shop that I use for storage. Never had a problem. You must be realistic though, I agree with that. You can't have a 3K sq.ft. home and claim 1K' of office without raising some eyebrows.
fish6942, Keep it simple & Brew is right about it doesn't matter if you actually MAKE a profit vs. have a business INTENDED to make one. Ag is pretty tough in some states. When I had 11 acres, I used some of it for hay farming and acquired a farm tax ID. It didn't save me as much as you'd expect unless you're actually purchasing large equipment. You really need to choose something that requires business miles too if possible. That's a pretty big help.

[brew]

One other piece of advice, don't start a business for the benefit of being able to write something off. Start something because it's something you want to do. Otherwise it will never work and it will cost you more than you ever save.

I see people all the time wanting to start a business to help with their write offs. Guess what people, the only way you can write something off is if you spend it. So for every dollar you spend, you're going to get in the range of 10%-35% back depending on your tax bracket. Great news is your refund went up by $20, bad news is you spent $100 to make $20.

[fish6942]

Definitely the business has to intend to make money, "profit motive" is the term my tax guy uses. He has also mentioned some guidelines regarding having X number of profitable years over a certain span of years to help keep under the IRS radar.