What do you do with your tax money while holding it?

[DrJD]

In another front page thread the general consensus it is best to owe $0 at the end of the year, or ideally owe the government money because its a free loan you could be earning interest on!

So my question, what do you mustachios do with your taxes while you hold it during the year? 

[ShoulderThingThatGoesUp]

We built up a substantial buffer at the end of the year, then did the taxes to verify that maxing out tIRAs would be good for us, and did that. So we ended up getting money back. Maybe not the optimal strategy but it was very safe.

(Small portion of federal refund went towards the state of Pennsylvania, the rest went into SCHB.)

[MDM]

In another front page thread the general consensus it is best to owe $0 at the end of the year, or ideally owe the government money because its a free loan you could be earning interest on!

So my question, what do you mustachios do with your taxes while you hold it during the year?

For us it's not so much holding a big pot as it is balancing cash flow during the year.  When contributing as much as possible to tax-deferred plans and budgeted investments, one does still need to provide food, clothing, and shelter with the take-home pay.  Giving too much to the IRS during the year can make that more difficult than it needs to be.  Depends to some extent on one's ability to hold to an investment plan and not spend the "extra".

[Schaefer Light]

When we did our taxes this year, we owed the government for the first time in my working career.  I was pissed for about half a second, and then it dawned on me that the govt. had given us an interest-free loan.  I think I'll take another one this year.

[DrJD]

When we did our taxes this year, we owed the government for the first time in my working career.  I was pissed for about half a second, and then it dawned on me that the govt. had given us an interest-free loan.  I think I'll take another one this year.

What do you think you'll do with that interest free loan?


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[Freedom2016]

In another front page thread the general consensus it is best to owe $0 at the end of the year, or ideally owe the government money because its a free loan you could be earning interest on!

So my question, what do you mustachios do with your taxes while you hold it during the year?

I pay quarterly taxes. I have a dedicated savings account at Capital One to hold my set-asides for taxes, then I write the checks each quarter. I am only earning ~1% interest, but it's better than nothing. Can't do much else with the cash since the time horizon for holding it is so short (max of 3 months).

[frugaliknowit]

My cash is held in "kasasa" accounts.  Internally, money I am holding to pay taxes is in my "slush fund" (on a spreadsheet).

[MustachianAccountant]

In another front page thread the general consensus it is best to owe $0 at the end of the year, or ideally owe the government money because its a free loan you could be earning interest on!

So my question, what do you mustachios do with your taxes while you hold it during the year?

I doubt anyone does anything substantial with their "interest free loan." We're not talking about huge sums of money (there are penalties if you owe too much), and the time horizon (<1 year) isn't enough time to do anything even moderately risky with it.

[okits]

Just about everything is invested.  I owe only a few hundred dollars, so I've earned maybe $30 on the taxes I owe. 

[Schaefer Light]

When we did our taxes this year, we owed the government for the first time in my working career.  I was pissed for about half a second, and then it dawned on me that the govt. had given us an interest-free loan.  I think I'll take another one this year.

What do you think you'll do with that interest free loan?


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I'll probably just leave it in a savings account earning ~0.9% interest.  It's not a huge amount of money, so it's not like we're missing out on any big earnings by not having it invested.  Plus, the stock market could tank sometime in the next year.