Do You Look Forward to a Big Tax Refund Check?

Clark doesn’t recommend big tax refunds. See his tax refund advice instead. Do you agree or disagree? Tell us why!

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I not only agree but prefer to owe money. That way I’m able to hold more money in savings until it’s due and earn a bit of interest. Just be careful not to under withhold to the point of getting an under withholding penalty,

Since I retired I pay estimates for Federal tax instead of having money withheld from my pension and social security. I use a tool I found a couple of years ago that is surprisingly accurate. Since I am on a mostly fixed income, I plug in my income numbers and it will tell me how much tax I owe. I divide that by 4 and pay the IRS online every quarter. For 2021 I had a refund of $7.

Yes I prefer to owe too

My wife likes the refund. Guess who wins?

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Try to come out about even, usually pretty close.

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I always want to owe money come tax time. This is especially reinforced when I hear about all of these people waiting to get refunds back for over a year.

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I try to owe a little and don’t mind missing the mark too far because the late penalty isn’t too bad. This year I ended up with a $49 penalty on a $4600 under estimate.

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I owe another $4100.00 and got by without a penalty. Score one for me. :slightly_smiling_face:

I concur. We have taxes withheld from RMDs, but have a variety of other income. So, we wait until later in the year to take RMDs and get the withholding close but within the safe harbor. If I mistakenly over withhold, I just apply it to current year taxes. We owe the Feds $750 for 2021 and the state about $2,200 (but withheld more than 2020 tax, so no penalty).

I pay estimates. My income is not subject to state income tax, since it’s from a state pension, which is not taxable income in Kansas. But if I withhold Federal from it or any other source, the the state law says that I have to withhold 5% for the state, even though my taxable income will be zero. It’s easier and far more cost effective for me to estimate federal and pay them.