Why don't I ever get a good tax refund?

Question

This year my friends, who all earn about the same amount of money as me, all got hundreds, if not thousands, of dollars back from tax returns. But every single year I get a total of like $4 back. The people at H&R Block told me I am probably getting a lot less money taken out of each paycheck and it's all evening out in the end, but upon comparison with friends, we're still getting about the same amount taken out each paycheck. Why am I always getting screwed over?

Answer 1

First your buddies have to be in the same situation as you--such as single with no dependents and no deductions or credits for student loans, etc. If your buddies are willing to let you compare their federal return with yours, compare your Adjusted Gross Income, the federal tax assessed from the tax tables, the federal tax that was withheld from wages, and the refund. If the wages are comparable, you will see the difference reflected in the federal tax withheld from wages. You really want a small refund because that means you are getting your money for yourself throughout the year rather than loaning it to Uncle Sam. All of that money your friends are getting back is money they let the government use all year without any benefit to them because the government doesn't pay interest on your money that they are happy to use all year before they return it back to you.

Answer 2

Ask your employer to withhold an extra $100 a week from your paycheck for federal taxes. There's a line on the W-4 to ask for additional money to be withheld. Then next year you'll have a refund of over $5,000, and your friends can envy you.

Doesn't sound like a good idea? I didn't think so. But people get big refunds because they have too much taken out.

The other possibility is that they have a couple kids and are eligible for the earned income credit, and you don't have any kids and you're not eligible.

Answer 3

If you want a bigger refund, fill out a W-4 with your employer, and tell them you want more money withheld from your paycheck.

A better question would be, "Why would I want a big tax refund?"

When the IRS refunds your money, it just means that you've been letting them hold your money. For free. In other words, they're ripping you off.

If I were you, and if I didn't anticipate my tax status to change next year (meaning no significant raise, no marriages or divorces, no kids), I'd simply take 10% out of every paycheck and put it someplace that would earn interest--a short term CD, or a Savings Bond.

Personally, I favor the Series I Savings Bonds. They're safe, and they pay about 4.52% interest right now, compounded every six months. It's a good place to park your cash if you don't have a lot of money put away, and if you don't really know much about stocks and mutual funds.

If you do this for two years, you'll have a nice fat wad of cash waiting for you, with more coming the following year. In the meantime, start learning about stock picking, and you'll be ready to invest when you've got the cash. That's when you'll start seeing bigger returns.

Answer 4

You're not. Your ARE getting more of your income in your paycheck. It's just that you're not subsidizing the government with an interest free loan like your friends are. Fact is, YOU are the smart one, not them.

Do you actually WANT to get a smaller paycheck all year and give the government an interest-free loan? No? Well, that's how you get a nice fat refund. Personally, I hate loaning money -- least of all to the GOVERNMENT!

Unless you're examining their W2 and their tax return, you can't make a valid comparision between yourselves. And frankly, NOBODY gets to see MY tax return except the IRS computers so I could blow smoke and you'd never know.

Answer 5

you need a financial advisor.

there are so many things that take place when people file income tax returns.. mortgage interest and any other interest... annual income, withholdings, dependents

i would have someone look at your portfolio and see.
you should be happy you don't owe, at least you get your money all year long..most people have to wait for the returns and then Uncle Sam still holds back

:) don't fret, you're doing ok. Just because they get a big refund doesn't mean they are better off than you.

maybe they have alot of high interest debt on their books ;)

Answer 6

I'm fairly certain that this is going to help you in your efforts to save money with regards to taxes.

THE WHOLE PURPOSE OF TAXBACK IS TO OBTAIN FOR YOU THE MAXIMUM POSSIBLE LEGAL REFUND IN THE FAST TIME POSSIBLE AND WITH THE MINIMUM AMOUNT OF HASSLE.

I should also say that that approx. 60% of all people who submit their taxes for review are due money back from mistakes in filing or simply missing deductions.

The last thing I will say about Taxback is that it is 100% FREE to submit your taxes for review. So what this means is that the worst case scenario is that you aren't owed any funds back and you have the peace of mind knowing that you have maximized your refund. Ideally though, our Professional Tax Analysts will find and issue you the funds withheld by the IRS that are owed to you.

Currently, I'm installing a franchise of Taxback and we should be processing requests around March 1st, 2007. Until that time, I have put together a small webpage where you can lock in your submission request. As soon as I get the franchised website, (within the next 2 weeks,) I will send an email to you then informing you as to what to do next.

Please visit my temporary webpage for more information. I hope you find this information helpful and good luck to you. I look forward to helping you save money on your taxes!

http://www.1upadvantage.com

Answer 7

You don't want a big tax refund. If you get a big tax refund, that means you are giving the government your money to use interest free. The only way to pay less taxes is to take deductions for mortgages, student loans etc.

Answer 8

You need to change how many exemptions you are claiming. If you claim 0 you will have more money taken out. But if you claim 1 or 2 less will be taken out but you won't have much of a refund. H&R is right. It will even out................but if you're not happy change your exemptions to zero.

Answer 9

You need to file single and zero (exempt). They will take as many taxes from your check every week as they can. This means you will get the excess back in an Income tax return. Good luck next year.....

Answer 10

It hasnt got here approximately to me individually, however the guy who owes me toddler help continually gets his refund taken, alongside along with his stimulus verify all got here to me. he's $40,000 in the hollow in toddler help. Its the only money ill ever see from the loser.