Anonymous
Post 01/06/2014 11:46     Subject: Re:What to do wth 5k tax refund?
Anonymous wrote:
No its stupid you should be putting 400 a month into savings and making interest.


We have some investment income, and DH is not a W4 employee. My income also varies from year to year by a couple thousand dollars for technical reasons that aren't worth going into right now. Anyway, the point is, sometimes it's not easy to accurately estimate exactly how much I should withhold every month. I have never had a refund of $5,000, but I have had ones as high as $3,000.


We have to do the safe harbor amount each year (110% of prior year tax). Sometimes this is on target, sometimes we get big (like $40k) refunds, which we apply to the 1st quarter estimated payment. Big variations in income. Being protected by the safe harbor is more important than interest.
Anonymous
Post 01/06/2014 11:39     Subject: Re:What to do wth 5k tax refund?
No its stupid you should be putting 400 a month into savings and making interest.


We have some investment income, and DH is not a W4 employee. My income also varies from year to year by a couple thousand dollars for technical reasons that aren't worth going into right now. Anyway, the point is, sometimes it's not easy to accurately estimate exactly how much I should withhold every month. I have never had a refund of $5,000, but I have had ones as high as $3,000.
Anonymous
Post 01/06/2014 11:33     Subject: Re:What to do wth 5k tax refund?
Oh, and $$ invested in the stock market last year earned 28%. That's a whole lotta stamps.
Anonymous
Post 01/06/2014 11:33     Subject: Re:What to do wth 5k tax refund?
NP. From a financial perspective it is not smart to have a large tax refund. But if you know that you cannot otherwise control your spending and you need the government to hold onto your money for you as a way of forced savings, well then, that's a different perspective. Regardless, max out your IRA first and then look into low cost funds at Vanguard, Fidelity, etc, as the pps have said.
Anonymous
Post 01/06/2014 11:27     Subject: What to do wth 5k tax refund?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Also, adjust your withholdings so you don't get this stupid refund again next year. You could have another $400 a month in your pocket.


It's not obviously stupid-- it's a personal choice which is "better".


No its stupid you should be putting 400 a month into savings and making interest.


And at the end of the year you can buy a couple of stamps. woo hoo. What's stupid is not paying attention to your personality-- or assuming that everyone's is the same-- and whether adjusting your withholding makes you less likely to save the $, or otherwise undermines your longterm strategy.
Anonymous
Post 01/06/2014 11:15     Subject: What to do wth 5k tax refund?
Anonymous wrote:
Anonymous wrote:Also, adjust your withholdings so you don't get this stupid refund again next year. You could have another $400 a month in your pocket.


It's not obviously stupid-- it's a personal choice which is "better".


No its stupid you should be putting 400 a month into savings and making interest.
Anonymous
Post 01/06/2014 10:44     Subject: What to do wth 5k tax refund?
Last year we put it back into our home and made some needed updates
Anonymous
Post 01/06/2014 10:43     Subject: What to do wth 5k tax refund?
Anonymous wrote:Also, adjust your withholdings so you don't get this stupid refund again next year. You could have another $400 a month in your pocket.


It's not obviously stupid-- it's a personal choice which is "better".
Anonymous
Post 01/06/2014 10:15     Subject: What to do wth 5k tax refund?
Also, adjust your withholdings so you don't get this stupid refund again next year. You could have another $400 a month in your pocket.
Anonymous
Post 01/06/2014 10:07     Subject: What to do wth 5k tax refund?
Roth is a good suggestion, but it's more of a "where" than a "what", although you could always just pick a target retirement fund from Vanguard or T Rowe Price
Anonymous
Post 01/06/2014 07:04     Subject: What to do wth 5k tax refund?
Anonymous wrote:Roth Ira if you don't have one yet.


+1
Anonymous
Post 01/06/2014 05:59     Subject: What to do wth 5k tax refund?
Roth Ira if you don't have one yet.
Anonymous
Post 01/06/2014 00:13     Subject: What to do wth 5k tax refund?
What ever you decide to do with it, change your withholdings! You could have an extra $400/month in your paycheck instead of loaning it to the government.
Anonymous
Post 01/05/2014 23:45     Subject: What to do wth 5k tax refund?
have it refunded as ibonds.

or, come up with an asset allocation that you believe in for yourself, and consider how an emergency fund fits with that, and then let the results of that tell you where to put the refund.
Anonymous
Post 01/05/2014 23:30     Subject: What to do wth 5k tax refund?
I have about 5k in a savings account and another 7k in a Vanguard fund (as well as my tsp). Expecting about 5k total in tax refunds and wondering if I need to increase my savings account or put it all in my Vanguard account. No credit card debt.