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CliffMongoloid said:
on the tax subject,



i think of it differently, its just me tho and i do what works for me. i claim 0 on my w-4 then claim 1 on my w-2. i know myself and am more likely to spend that extra a month then likely to invest it. when i get my refund back i use it to pay of debt from the year or make a purchase i would be less likely to save for during the year. like i said this is just what works for me, i dont lose sleep over giving the goverenment a so called free loan... im sure i will get beat up for this statement but i think alot of people are like me and do the same



afternoon coffee
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I understand. But think about it this way, send me that money and let me do what I want with it (invest and make $ with it). I'll give what you gave to me right back to you next year. I promise.
 
A shiner birthday beer it's a chocolate stout, not bad I guess, while brewing my own choc oatmeal cream stout.
 
CliffMongoloid said:
on the tax subject,

i think of it differently, its just me tho and i do what works for me. i claim 0 on my w-4 then claim 1 on my w-2. i know myself and am more likely to spend that extra a month then likely to invest it. when i get my refund back i use it to pay of debt from the year or make a purchase i would be less likely to save for during the year. like i said this is just what works for me, i dont lose sleep over giving the goverenment a so called free loan... im sure i will get beat up for this statement but i think alot of people are like me and do the same

afternoon coffee
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If it works for you, so be it.

It does take a different mindset to watch your income / taxes on a quarterly basis to make sure you don't get too out of whack and adjust accordingly. I screwed up one year and underpaid by a big chunk - big enough to get hit with penalties for underpayment. Writing a multi-thousand dollar check on April 15th cured me of that.

still on the water...still in the office. I need beer tonight...
 
mhurst111 said:
big enough to get hit with penalties for underpayment.
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And that is the breaking point. If you have this, you did it even more wrong than getting a big refund. I always say if you are really smart, and good with your money, you pay the bare minimum not to get a penalty, and owe as much as possible at the end of the year as you can owe without paying a penalty.

I am not that extreme. I make mine a near break even each year...unless I do something wrong in my calculation or have something weird happen towards the end of the year.
 
DisturbdChemist said:
He is in the frozen tundra up north though he would fit in well down here. Just have to get used to the humidity :p
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Yeah... he's about an hour and a half east/northeast of me if you drive the speed limit.

The whole town smells like **** (packing plant).

Lol .
 
Ridire said:
And that is the breaking point. If you have this, you did it even more wrong than getting a big refund. I always say if you are really smart, and good with your money, you pay the bare minimum not to get a penalty, and owe as much as possible at the end of the year as you can owe without paying a penalty.

I am not that extreme. I make mine a near break even each year...unless I do something wrong in my calculation or have something weird happen towards the end of the year.
Click to expand...

So, you flatlanders do have brains. :ban:
 
Water.

On topic: I finally got my last 1099misc today and just filed my taxes. I had almost $10k of commissions that I didnt pay taxes on and still got a refund. I must be doing things right. I got to keep my money and got more money. :D ;)
 
mhurst111 said:
If it works for you, so be it.

It does take a different mindset to watch your income / taxes on a quarterly basis to make sure you don't get too out of whack and adjust accordingly. I screwed up one year and underpaid by a big chunk - big enough to get hit with penalties for underpayment. Writing a multi-thousand dollar check on April 15th cured me of that.

still on the water...still in the office. I need beer tonight...
Click to expand...

Thats is my worry. Rather pay a little more than owe more when I am not prepared to pay what ever. My taxes are taken automatically out of my paychecks and escrow so I do not see it taken away in a way. If I open a business I'll go insane with taxes which is just so confusing. I got an audit one year because my parents claimed me and i calim independence in college and got squat back which got annoying getting screwed out of my money.
 
cool thanks for the feed back on the taxes thing. i would just put the extra towards debt (student loans) but it would pay them down faster and less in interest i suppose. this is the way i have always done it and it scares me to change, cause i always know i will get a refund and not owe. to be honest i have actually only taken my fiances serisouly for the last 5 years or so, things i did as a kid screwed me for a bit... pretty much student loan debt- always looking to learn tho so thank you

water... im done with this week
 
Ridire said:
@Remmy - I've thought about dragging the BK down to the basement to chill. I foresee very bad things whenever I consider it.

@TaxReturns - if you are getting a big refund, you are doing it wrong.

@Finsfan - Hi, Finsfan.
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Every year I hear this and every year I somehow **** the bed. I think for me my income has fluctuated so I could not nail down a solid amount that I should ensure I get each paycheck. Last year I made a **** load less because the very last bonus I'll see came in March. Now that I know I won't see bonuses and my paycheck should remain roughly the same, I am trying to figure this out now. I liked the returns, but I'd like it more if that money were doing something all year. The only thing I am unsure about is how drastically numbers can change as I pay down the principal on my home which ultimately means the interest I'm paying is lower. It's a balance that I have yet to put enough time into figuring out.


Lets see...**** day...
coffee, water, protein shake, cherry coke, sample of Amarillo SMaSH which I think is more hoppy pale than an IPA due to low AA of Amarillo, water...aspirin and beer in a bit. Not fully better but I need to get out and do something, and have a beer.
 
Ridire said:
And that is the breaking point. If you have this, you did it even more wrong than getting a big refund. I always say if you are really smart, and good with your money, you pay the bare minimum not to get a penalty, and owe as much as possible at the end of the year as you can owe without paying a penalty.

I am not that extreme. I make mine a near break even each year...unless I do something wrong in my calculation or have something weird happen towards the end of the year.
Click to expand...

Yes - i learned the hard way, but that was 20 years ago. My goal now is +/- $500.

Remmy said:
So, you flatlanders do have brains. :ban:
Click to expand...
who you calling flatlander?:D

Denver_mountains.JPG
 
Ridire said:
And that is the breaking point. If you have this, you did it even more wrong than getting a big refund. I always say if you are really smart, and good with your money, you pay the bare minimum not to get a penalty, and owe as much as possible at the end of the year as you can owe without paying a penalty.

I am not that extreme. I make mine a near break even each year...unless I do something wrong in my calculation or have something weird happen towards the end of the year.
Click to expand...

I'm kind of dreading tax season this year. With all my out of state travel for work over the last 2 years, I was compensatory for most of the year. Basically my out of state expenses (mostly hotels, rental cars, and per diems) counted as taxable income. My company covers the estimated tax implication each pay period, but there's a true up once the year closes to make sure they didn't over or under pay you for the extra tax burden.

With fluctuating weekly expenses, it's tough to predict. Hoping I don't have to pay back sig money to my employer, not to mention the IRS. At least Texas has no income tax, so time spent working there helps the bottom line in that sense.

Short version - taxes suck.
 
Hello said:
Every year I hear this and every year I somehow **** the bed. I think for me my income has fluctuated so I could not nail down a solid amount that I should ensure I get each paycheck. Last year I made a **** load less because the very last bonus I'll see came in March. Now that I know I won't see bonuses and my paycheck should remain roughly the same, I am trying to figure this out now. I liked the returns, but I'd like it more if that money were doing something all year. The only thing I am unsure about is how drastically numbers can change as I pay down the principal on my home which ultimately means the interest I'm paying is lower. It's a balance that I have yet to put enough time into figuring out.


Lets see...**** day...
coffee, water, protein shake, cherry coke, sample of Amarillo SMaSH which I think is more hoppy pale than an IPA due to low AA of Amarillo, water...aspirin and beer in a bit. Not fully better but I need to get out and do something, and have a beer.
Click to expand...

I'd figure this out if I were you. Regardless of student loans or credit card debt, if you pay down your mortgage with additional funds per payment, you will save in the end. For example, if I pay $800 more per month on my mortgage, I'd save just over $100K in the next ~27 years. This is also my second home.
 
Remmy said:
I'd figure this out if I were you. Regardless of student loans or credit card debt, if you pay down your mortgage with additional funds per payment, you will save in the end. For example, if I pay $800 more per month on my mortgage, I'd save just over $100K in the next ~27 years. This is also my second home.
Click to expand...

That much I get. What I think I need to do is re-do my AM schedule accounting for the little extra I give each month. This will actually tell me how much interest I am paying and will let me hopefully dial in what I can keep back from taxes. I do not qualify for any deduction from student loan interest because of my income. I did not know that until last week when I felt like I did great by making additional payments only to find it was sort of all for nothing, kind of. An old financial advisor friend did always tell me that if I want to pay more than I owe on something it should be on my student loans because my interest rate after I consolidated is about 1/2 basis point higher than my mortgage. I am in line to pay my truck off 9 months early this month. So that extra, I believe I will allocate half to my student loans and the other half to something that works in my better interest, like towards my home.

The end.
 
Still on the water. Thinking I might have a beer tonight, as I've been good about not eating like an ******* this week.

On the predictability of taxes...I have had 30% of my income come in during one month of the year before. It's a nightmare to figure it out. But my income comes from two places, my business (which is erratic) and a steady paycheck from another business. I manipulate the withholdings on my weekly salary check from time to time to fix my taxes without making quarterly estimates.

When did this turn into the Susie Orman show? Don't get me going on the theory behind not paying your mortgage off early...it'll probably start a fight...
 
Ridire said:
Still on the water. Thinking I might have a beer tonight, as I've been good about not eating like an ******* this week.

On the predictability of taxes...I have had 30% of my income come in during one month of the year before. It's a nightmare to figure it out. But my income comes from two places, my business (which is erratic) and a steady paycheck from another business. I manipulate the withholdings on my weekly salary check from time to time to fix my taxes without making quarterly estimates.

When did this turn into the Susie Orman show? Don't get me going on the theory behind not paying your mortgage off early...it'll probably start a fight...
Click to expand...

You say do not?
In truth, for me I kind of need to keep the mortgage because my income + lack of children makes for a terrible position.

I'll stop.
 
Hello said:
That much I get. What I think I need to do is re-do my AM schedule accounting for the little extra I give each month. This will actually tell me how much interest I am paying and will let me hopefully dial in what I can keep back from taxes. I do not qualify for any deduction from student loan interest because of my income. I did not know that until last week when I felt like I did great by making additional payments only to find it was sort of all for nothing, kind of. An old financial advisor friend did always tell me that if I want to pay more than I owe on something it should be on my student loans because my interest rate after I consolidated is about 1/2 basis point higher than my mortgage. I am in line to pay my truck off 9 months early this month. So that extra, I believe I will allocate half to my student loans and the other half to something that works in my better interest, like towards my home.

The end.
Click to expand...

Not the end.

Do the math. I can't imagine student loan being any higher than 4%. Mine is 2.5%. I pay more off of my mortgage than I do against my school loan (half was athletic scholarship - other half I am responsible for). Let's say you owed $30K at 2.5%. Paying an additional $500-600 against your mortgage (depending on what your mortgage is to begin with) would save you a lot more $ in the long run - that is, if you decide to keep that house. Higher amount of $ owed + same interest rate = more $ you're spending on interest in the long run.
 
Remmy said:
Oh, that's right. That's the view from Aurora aka Kansas. :D :D :D
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yeah - that was just an image off the net. I live to close to the foothills to see the mountains...

i really need to work, but this thread (even without the beer drinking) is more entertaining...
 
Ridire said:
Still on the water. Thinking I might have a beer tonight, as I've been good about not eating like an ******* this week.

On the predictability of taxes...I have had 30% of my income come in during one month of the year before. It's a nightmare to figure it out. But my income comes from two places, my business (which is erratic) and a steady paycheck from another business. I manipulate the withholdings on my weekly salary check from time to time to fix my taxes without making quarterly estimates.

When did this turn into the Susie Orman show? Don't get me going on the theory behind not paying your mortgage off early...it'll probably start a fight...
Click to expand...

I suggest we continue. Although, you may aggravate the people here who's parents helped them buy their homes. Or people still living with their parents. :D
 
Remmy said:
Not the end.

Do the math. I can't imagine student loan being any higher than 4%. Mine is 2.5%. I pay more off of my mortgage than I do against my school loan (half was athletic scholarship - other half I am responsible for). Let's say you owed $30K at 2.5%. Paying an additional $500-600 against your mortgage (depending on what your mortgage is to begin with) would save you a lot more $ in the long run - that is, if you decide to keep that house. Higher amount of $ owed + same interest rate = more $ you're spending on interest in the long run.
Click to expand...

My interest is not 2.5%. I would do bad things to someone if they'd give me 2.5%. I finally consolidated and got down to something much more reasonable. Some were at 6.5%.
 
Hello said:
You say do not?
In truth, for me I kind of need to keep the mortgage because my income + lack of children makes for a terrible position.

I'll stop.
Click to expand...

Not in every situation, but often I believe the better financial decision is to pay the interest on the mortgage and not pay it off early.

My thinking is that there is bad interest and good interest. Bad interest = interest at a rate which is higher (net of any tax savings from deducting it or getting a credit for it) than what you can expect to get, on average, as a return on investment. Good interest = not bad interest.

For example, if I have a $100,000 mortgage at 4%, which I can deduct on my taxes (assume a marginal rate of 25% for taxes), then I am paying 3% to keep the mortgage.

If I found $100,000 is the street (which happens to me all the time), would I be better off to pay off the 3% mortgage or to invest it in the stock market if I feel I can get a 7% average annual return on my investment?

If I pay off the mortgage, I am up $0 at the end of the year. No debt, no money.

If I invest, I am up $4,000 at the end of the first year (I made $7,000 on my investment, but paid only $3,000 in interest, net of the tax savings).

Which was better?
 
I hate drinking beer. I'm going to be fat soon. Ordering Chinese instead of grilling the choice NY strips I made SWMBO get today.

Orange juice with crushed ice. Yes.
 
The other thing you have working in your favor by keeping the mortgage debt, assuming it is a fixed interest rate loan, is inflation. The amount of debt and the amount of payments do not go up due to inflation. But the income you have, with which you pay the monthly payments, will likely go up with inflation. This offsets interest rates. If your interest rate is at the 3% effective rate I described above, and the inflation rate is 3% per year, you are essentially paying no interest at all on your mortgage loan.

Oh, and I'm drinking water...still.
 
@Remmy Still alive! After my early morning beer, I had to be prepared to run errands in the car...and I do NOT need a DWI. So...on to the afternoon coffee.

As to taxes and finances...I have always been told to get rid of your debts in order by highest interest percentage to lowest. Lowest is usually your mortgage, but it is also usually the biggest; so, if you can designate an additional monthly amount towards the principle...even a small amount...it can save you big money. I also hate the idea of the government getting to hold my money for free, but I dread getting caught short and having to write a big check or use a credit card. I owed thousands of dollars one year and had to borrow. I would rather get a refund than go through that again! Finally managed to get rid of tens of thousands of dollars in credit card debt recently. Need to see if I handled it well for taxes...after this year, it should be pretty smooth sailing. For you younger folks out there, a little advice: don't use credit cards for more than you can pay off that month! It turns into 30 years of quicksand and stress.
 

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