Wednesday, April 14, 2010

Death and April 15th

When deciding how much you have with held from your paycheck each year ask one question:



When you die do you want to owe the government or do you want the government to owe you?




Here's a previous post explaining why it is in your best interest to OWE taxes in April- that's right, if you're getting a return- you failed.

7 comments:

adamf said...

I would totally agree if I didn't need someone like BIGGOV to save my money (albeit at a loss) for me... if they weren't taking out so much, I definitely would have spent it on something useless. Now I have $2800 to spend on something REALLY big AND useless... like summer tuition. The real problem here is me and my apparent inability to budget. :)

Silvs said...

What if I'm a lowly student at the BYU and had no withholdings whatsoever, but am now getting $750 even though I paid nothing? I'm one of the 49% (or whatever it is) of the US population not paying income taxes. It's hard not to like getting money back even though it goes against my conservative principles.

Jon said...

I'm with you...almost. If you don't pay enough then you are charged a penalty which is more than the interest you would have earned. Unless of course you were able to invest in your neighbor's neat new ponzi scheme, then you would have made more.

Steve said...

C'est vrai, although I tend to agree with Jon in that it is best to break even or close to it unless you took the money in the beginning of the tax year and invested it in a way that made money, probably not likely last year. Also, if you aren't wise enough to save up or set aside that money during the year, the tax bill could become a very expensive burden if you don't have like $2k lying around. Si I agree with you mostly on the purely economic theory, but not in practical terms. Much like church! haha.

Salt H2O said...

Jon,
What penalty are you talking about? I'n no accountant- we've owed every year except this year (FAIL!- we can't claim more on our W-2 forms without proof so I guess we now enter the same game as everyone else- trying to get our money back) and we've never paid any sort of penalty. There is a penalty if you pay on April 16th, but as far as I'm aware not on the 15th.

Anytime we share our theory of why we would rather owe than be owed with an accountant they with out fail answer "I try to get my clients to see that same thing but it's a challenge"

Steve- the tax bill is always an expensive burden, which is why it would be best if we all paid it in one lump sum at the end of the year in lieu of partially through our paychecks- if Americans did that there would be a tax revolt and congress would be hanged by their thumbnails for pork.

As it is the tax system lulls the people into thinking they're getting something back from the government in lieu of realizing they shelled out 30% of their income.

I guess the difference between you and I is the ability to live theory :)

Jon said...

Here is a link (http://www.irs.gov/taxtopics/tc306.html) that briefly explains the penalty. I only know this because I came close to it last year, and my brother (also the accountant that does my taxes) warned me about it.

Steve said...

Ha, I can totally live either theory you described here! :) The problem is more that more people aren't like you and me! haha. Sad, but true. I personally love the tax code and using my job to make sure tax money was being used correctly, I'd be on the side making sure it was brought in correctly.