What is better to owe the IRS 1000 bucks , or to have 1000 dlls tax return at the end of the year?

Question

Depending on your answer, I will send my partial taxes accordingly.

Answer 1

It is better to owe the IRS 1000. Take the 1000 now and put it in a high interest bearing financial account. Next April, send the IRS the 1000 and pocket the interest.

Answer 2

The answer to your question is not a simple pay or owe. Why do you owe the IRS money? Is it from an increase in wage, capital gains, gambling winnings...? The answer to these questions weight in the decision. If this is additional income and you haven't accounted to the IRS for 90% of last years tax liability you should remit payment to the IRS. The IRS considers taxes due when income is earned. If however your other estimated tax payments will meet 90% of last years liability then investing it would be a great idea.

Answer 3

It depends on your circumstances, but sometimes the answer is owing. Here's why--if you HAVE to have the additional income now, you can just think of it as a short term loan, which can be paid back in 100 dollar installments over ten months without interest or penalties that amount to anything more than a few dollars--literally.

As long as your yearly tax debt doesn't exceed the amount you can pay back the following year, you're okay. If it's not a matter of necessity, then paying it back is a hassle, so keep that in mind.

Answer 4

If you owe $1,000 or less there are no penalties for underpayment of tax. So, from the standpoint of having control of the most amount of money possible throughout the year, owing them is better than getting a refund since you can earn interest on the money that you'll pay them up until the filing deadline. If they owe you, you get NO interest.

Answer 5

If you're going to owe, try to keep it under $1000. If you owe $1000 or more, you'll most likely be subject to penalties for underwithholding. If you owe less than $1000 and pay in full with your return, and file on time, there won't be penalties.