Standing in line last night at Taco Bell, I overheard a girl say "I already did my taxes, and I'm getting back like $400". Her friend said, "What? I thought we made the same amount this year, you must have a good tax guy, because I only got back like $50."
OK. Maybe, just maybe, this girl made enough donations or took some college classes and got a tax credit. But most likely, both of these girls actually did pay about the same in taxes, and both of the girls' parents claimed their tax credits. The difference? One girl probably filled out her W-4 incorrectly, which means she had too much withheld from her paychecks. What a patriot! She made an interest free loan to the government!
Just imagine if people all filled out their W-4 correctly. Fewer refund anticipation loans to rip off the low-income folks, no annoying Turbo Tax commercials where the wife goes "if it's so good, how much are we getting back? [pause] [stupid face] WOOWWWW!", and more money to spend on Elvis throw rugs every pay day. OK, maybe it wouldn't be that great. And maybe you don't always plan on the IRA deposit or charitable gift until half way through the year (although you CAN change your withholding at anytime). But dude, seriously, W-4s.
3 comments:
Ja, this has been one of my long-standing pet peeves: people who treat their tax return like a savings account. When you try to explain it to them...forget it. Frustrating. I'm just thrilled I don't have to *pay* this year!
I filled out my W-4 incorrectly too, but in the opposite way: I usually end up owing $150 or so at tax time. I never bothered to fix it because a) I don't remember what I filled out wrong, and b) I can handle $150 once a year. Local tax eats up about half of my Ohio refund though.
If it's only $150 or so, why fix it? You are getting the interest free loan now...that's way cool.
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