tax
- Thread starter kuulani
- Start date
Altron
Well-Known Member
Right. The Man isn't paying you any interest. So, if you give him more out of your paycheck than he asks for, he's getting to hold onto it until April 15th of next year, then giving it back to you without paying a dime. By not paying any more than you need, you get more money in your pocket, which you can then invest and make a return on. However, if you're irresponsible at investing or spending, it can be a drawback. Which is why most people like to get big tax returns. If they had just gotten that much more money spread out over each paycheck, they would have spent it. Instead, they get a nice big check to get something nice with, or to invest.
The smart investor knows how to use interest to make himself money. For example, when my grandpa buys something, if they offer no-interest financing, he gets it. Then he pays the minimum for as long as possible. Then, at the latest date possible before getting slammed with all that interest, he pays the rest off. He easily could have paid for it in cash, he's a fucking millionaire. But instead of being in someone else's pocket, he was able to have that much cash earning him a decent amount of interest.
The smart investor knows how to use interest to make himself money. For example, when my grandpa buys something, if they offer no-interest financing, he gets it. Then he pays the minimum for as long as possible. Then, at the latest date possible before getting slammed with all that interest, he pays the rest off. He easily could have paid for it in cash, he's a fucking millionaire. But instead of being in someone else's pocket, he was able to have that much cash earning him a decent amount of interest.
Inkara1
Well-Known Member
I got a 10 percent discount on my washer and dryer for opening up a new Sears card account and six months no interest financing. I paid it off the day before the interest would have been tacked on. 
It's amazing how many people simply cannot grasp the concept of "interest will accrue but will not be applied for six months" and are surprised when they get hit with six months' worth of interest in the seventh month.
Otherwise, Altron hit it right on the head. If you get a $7,000 return, you gave Uncle Sam an interest-free $7,000 loan. If you're only getting a few hundred back on your return, your best bet is to leave your W-4 form be, because that's close enough that tweaking it might tip the scales in the other direction and you'll owe a bit on tax day depending on your wage income, investment income, etc. But also, getting your taxes spot on, with a $0.00 refund and $0.00 owed, would be pure chance and is probably less likely than lightning striking the same lottery-winning midget in a giant sequoia forest twice.
So a refund of a few hundred isn't cause to do anything. But a few years back, greenfreak got a big enough tax refund to buy a high-level camera setup (more than $2,000 worth of equipment) and HomeLAN told her to tweak her W-4 so she gets more of what's rightfully her money each paycheck.
It's amazing how many people simply cannot grasp the concept of "interest will accrue but will not be applied for six months" and are surprised when they get hit with six months' worth of interest in the seventh month.Otherwise, Altron hit it right on the head. If you get a $7,000 return, you gave Uncle Sam an interest-free $7,000 loan. If you're only getting a few hundred back on your return, your best bet is to leave your W-4 form be, because that's close enough that tweaking it might tip the scales in the other direction and you'll owe a bit on tax day depending on your wage income, investment income, etc. But also, getting your taxes spot on, with a $0.00 refund and $0.00 owed, would be pure chance and is probably less likely than lightning striking the same lottery-winning midget in a giant sequoia forest twice.
So a refund of a few hundred isn't cause to do anything. But a few years back, greenfreak got a big enough tax refund to buy a high-level camera setup (more than $2,000 worth of equipment) and HomeLAN told her to tweak her W-4 so she gets more of what's rightfully her money each paycheck.
A tax guy told me that it's best when you get $0 back on your tax returns, because you're getting the most out of your paycheck.
So my $3 state return was pretty damn good
Absolutely. Never give Uncle Sam a interest free loan. He'll just demand it again next year.