Author Topic: Tax refund - do you take the refund or do you apply to next year?  (Read 1176 times)

jeromedawg

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Hey all,

Curious but do you prefer cashing out on the tax refund (if owed) or do you apply it to next year's estimated payment?

ender

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #1 on: April 14, 2019, 07:48:40 PM »
I always take any refund I receive.


MDM

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #2 on: April 15, 2019, 12:00:30 AM »
Take the cash and resolve to do better about owing a little, instead of getting a refund, next year.

marty998

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #3 on: April 15, 2019, 02:11:19 AM »
Is this a trick question?

MoneyizHere

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #4 on: April 15, 2019, 07:29:57 AM »
I have always taken the cash refund.  Taxes for next year are not due for another year...why are you pre-paying? 
If you do want to do this for some reason - Perhaps this allows for you to mark exempt on your current year taxes until your tax liability actually catches up to you.  That will allow you to maximize 401k or other plans quicker in the beginning of the year without the tax withholding deductions?

BlueHouse

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #5 on: April 15, 2019, 07:49:31 AM »
I always take the refund for my personal taxes. 
For my business taxes, I apply them to my next payment.  But I pay quarterly estimated taxes, and I'm just trying to simplify.   But then that means that I have to record the transaction as a zero sum transaction in April with a receipt and a payment in the details, summing out to zero.  I've probably made it even more complicated so that I can see all my tax payments in the current year separate from my tax refunds. 

I'm a red panda

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #6 on: April 15, 2019, 07:59:22 AM »
Always take it.
I accidentally gave it to them early for a year; I'm not letting them hold onto it for 2 of them.

RetiredAt63

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #7 on: April 15, 2019, 08:02:34 AM »
I have to pay quarterly, so this's years refund went to that.  It was about one quarter's worth anyway.  I try to have a zero tax balance, getting closer every year.

This is a retirement income issue (and possibly Canadian) - no tax is deducted from investment income.

OtherJen

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #8 on: April 15, 2019, 08:26:26 AM »
I have always taken the cash refund.  Taxes for next year are not due for another year...why are you pre-paying? 

Some of us pay quarterly estimated taxes.

We took the unexpected refund this year (first time husband and I have gotten one in more than a decade) and dropped half of it into the high-yield emergency fund savings and half into the roof replacement savings account. If we get a refund again next year, I might consider applying it directly to the Q1 estimated taxes.

tralfamadorian

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #9 on: April 15, 2019, 12:58:00 PM »
I always take the refund unless the quarterly estimated payment due the same day is equal to or greater than the refund. If so, apply to quarterly. If not, I take the refund and write a new check for the estimated. I'm not in the habit of extending interest free loans to uncle sam.

frugaldrummer

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #10 on: April 15, 2019, 06:07:55 PM »
I pay quarterly estimated taxes so I always apply any refund to the quarterly estimated taxes which are due at that time. Why would I pay the full amount of estimated taxes out of my current money and wait for the government to send me the refund from the previous year's taxes when I can apply it directly.

Example: refund of $6k, estimated taxes due of 10k. Apply refund and I only have to send in $4k, leaving me with 6K in my pocket that I had saved for estimated taxes.

I prefer to overpay a little bit since the government only has that extra money for 3 months (or much less if I got my butt in gear and did my taxes in January) and that way I don't have any nasty surprises.  I would feel differently if I wasn't paying quarterly estimates.

FIREstache

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #11 on: April 15, 2019, 06:18:59 PM »
I take the refund, when I actually get one, which is usually small.  This year, I had to write checks for about $1000.

ForeverPoor

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #12 on: April 15, 2019, 06:57:27 PM »
Generally if you are getting a sizable refund it means you're letting the US govt. take too much of your cash in that year. Might want to check your finances more to make sure you don't get that.

BlueHouse

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Re: Tax refund - do you take the refund or do you apply to next year?
« Reply #13 on: July 25, 2019, 09:50:39 AM »
I always take the refund and then write another check for quarterly.  Helps with recordkeeping so I can show how much I paid in taxes byyear. I use Quicken and I want my reports to show Estimated TAxes, Q1, Q2, Q3, Q4.  for each year.  If I use a prior year refund for the following year Q1, then I have to have multiple entries that net out to zero and sometimes I delete a zero entry by accident. 

I'm near-OCD with my financial files, and I've been doing it this way for year.