Do you use your tax refund to cruise.

[Krazy Kruizers]

We haven't seen a tax refund in over 30 years.

What we paid just for the regular tax would have paid for 3 cruises.

And then their are the quarterly payments -- pay for more cruises.

[olemissreb]

Sadly, my tax refunds are getting scarcer and scarcer. We did get a small one this year and unfortunately, it will be sitting in the bank collecting a paltry amount of interest before we use it to make the first of probably 10 tuition payments to Auburn University!

[ducklite]

We put it into savings and as a result, some ends up used for vacations. We don't specifically earmark it that way though.

[spookwife]

When I figure out how to get my refund to zero, I'll let you know. In the meantime, I've used the return toward a cruise or something else fun.

 

we gave up trying.. for years we were getting 7 and 8 thousand back, then one year we went too far in the other direction and ended up owing THEM almost $2 grand. we had it, sure, but man I felt sick writing that check. that was the one year we did not file until 14 April heheheh.

 

now we have managed to basically get the same back ever year.. not the aforementioned 7 or 8, but a far more reasonable number and we just cannot seem to get to to balance out to zero or close.

 

but no we do not use tax refunds. I book and pay in installments throughout the year. I almost always manage to pay in full long before FP as well and the money then goes towards excursions and padding the on board account.

 

this year we ended up needing it to bring the checking account up to less panic inducing levels after having a few emergency car expenses that were not covered by the warranty. I had wanted to use it to buy a new pair of recliners. Oh well.....

[navybankerteacher]

Do you even know how taxes are collected????? They don't take all of it out of the first paycheck and hold on to it for an entire year. It accumulates gradually paycheck by paycheck. If they end up with $520 more than they should at the end of the year, they only take $10 more than they should out of each weekly paycheck. It will take months before the amount begins to add up to "hundreds or thousands". They won't have it all for "a whole year". :rolleyes:

 

It still means that you have made an interest free loan to the government - even if the refund is $520, you have still been out an average of $260 for the "whole year". The topic here is about using a refund to pay for a cruise - which means it is likely to be a lot more than $520. Additionally, many of those who do not take the trouble to closely figure their estimated tax and wind up having too much withheld as an interest-free loan also wind up paying interest on outstanding credit card debt - meaning that they are being hit twice for their carelessness.

[Warm Breezes]

Does anyone else use there tax refund as a vaction fund . This has been a good system for us, we have done this since we were married in 76 and most years we did get to do something. Over the years we have moved up in refunds and trips , we spend more than our refund but it is a good start .

 

We have 2 sources for our vacation funds account (which also is used for our household repairs or remodels and appliances replacements). My yearly bonus makes up the majority of the funds along with our income tax refunds. 2-3 months before we vacation I collect any checks I recieve, mostly from Flexible Spending Reimbursements and cash in our credit card rewards points for a check. When cashed, these usually give us enough for any spending money we may need.

[Warm Breezes]

All I was saying is that if you have to totally depend on a tax refund to pay for the cruise, you might want to consider if you can actually afford to cruise. Same is true for a savings fund ... if you have to go into it, you probably should not be cruising. :rolleyes:

Just my thoughts and my last post on this issue.

LuLu

~~~

:confused::confused::confused:But my bonus dollars and tax refund dollars go into my savings fund before I pull them out for a vacation. If the fund is dry because there was no bonus and no refund, then I can't afford a vacation at that time. If I had to pull vacation money out of my every day fund that I use to pay for normal monthly expenses or my 401k's, rainy day, or kids college fund or heaven forbid charge it on my credit card with nothing in my vacation fund to pay it off....then I'd be nervous and couldn't actually afford a cruise. Your logic confuses me on this one.

[cadien]

The thing is I doubt anyone is purposely over-withholding a significant amount as a way to generate savings.

 

No, many people do exactly that. And some react so angrily, I can only guess they think that the practice leads directly to the IRS increasing their own tax rates. Because otherwise it's none of their affair. (You have already clarified you didn't mean it that way but we have some other 'Irresponsible idiots!' posts in this thread.)

[Warm Breezes]

It still means that you have made an interest free loan to the government - even if the refund is $520, you have still been out an average of $260 for the "whole year". The topic here is about using a refund to pay for a cruise - which means it is likely to be a lot more than $520. Additionally, many of those who do not take the trouble to closely figure their estimated tax and wind up having too much withheld as an interest-free loan also wind up paying interest on outstanding credit card debt - meaning that they are being hit twice for their carelessness.

 

That's a wild assumption on your part. I don't bother trying to figure mine out to zero. IMHO the interest that I am losing on the $1.5 - $2k, given over a 1 year period, that I get back is not worth my time and trouble to try to figure out what that ultimate exemption number should be. And yes my refund this year was more than enough to pay for my March Cruise. I don't pay interest on my credit cards as they are paid off in full each month. It is a personal decision, but not necessarily a careless decision.

[ducklite]

That's a wild assumption on your part. I don't bother trying to figure mine out to zero. IMHO the interest that I am losing on the $1.5 - $2k, given over a 1 year period, that I get back is not worth my time and trouble to try to figure out what that ultimate exemption number should be. And yes my refund this year was more than enough to pay for my March Cruise. I don't pay interest on my credit cards as they are paid off in full each month. It is a personal decision, but not necessarily a careless decision.

 

 

Agreed. My vacation money comes out of short term savings, which to be honest doesn't generate enough interest to be worried about it. It might cover dinner at Flemings or the Capital Grill, but nothing more over the space of a year.

 

We never carry credit card debt.

 

I filed an extension and know I'll get a return, but no idea how much. I can say with certainty that it won't even cover the airfare for my upcoming cruise.

[uncleg]

I do use it for cruises, I've tried whole not overpaying taxes, but was always uncomfortable to the few times I ended up having to pay. I do it for my own peace of mind I worry excessively over stuff like that. However no cruise this year, need a new car so there goes vacation money, plus whatever else I have saved.

[fortinweb]

It still means that you have made an interest free loan to the government - even if the refund is $520, you have still been out an average of $260 for the "whole year". The topic here is about using a refund to pay for a cruise - which means it is likely to be a lot more than $520. Additionally, many of those who do not take the trouble to closely figure their estimated tax and wind up having too much withheld as an interest-free loan also wind up paying interest on outstanding credit card debt - meaning that they are being hit twice for their carelessness.

 

I don't know why some people have to put on their holier-than-thou-hat on and take the position that people who get tax refunds are poor money managers. :rolleyes:

 

I stack the deck so I always have a refund. I also ALWAYS pay off my credit card balances every month and NEVER get charged interest from their use. I also don't have any of those annual fee cards either. Using credit cards is a zero cost convenience for me. So I guess navybankerteacher is not as good a judge of character as he believes he is. :rolleyes:

 

That's a wild assumption on your part. I don't bother trying to figure mine out to zero. IMHO the interest that I am losing on the $1.5 - $2k, given over a 1 year period, that I get back is not worth my time and trouble to try to figure out what that ultimate exemption number should be. And yes my refund this year was more than enough to pay for my March Cruise. I don't pay interest on my credit cards as they are paid off in full each month. It is a personal decision, but not necessarily a careless decision.

 

Nice to see someone who isn't judge and jury about how people manage their money. ;)

 

I overpay and almost always receive a refund. Whether I put that same money aside or allow it to be taken as excess taxes, I eventually have it all available to use for the same things - cruises, repairs, college fund for the kids, etc. I haven't lost any of it. As for the lost interest? This amounts to a few dollars per year, a loss I am more than willing to take for the comfort of not having to write that check because I underestimated how much I should have taken out of each paycheck.

 

Bottom line - it's my money and I'll handle it however I want. I have been doing it for quite some time and somehow seem to be quite comfortable. What someone may think is "careless" handling of money, as navybankerteacher seems to insist some of us do by default, others may think other uses for money to be equally or even more careless or irresponsible. Hint: don't ask me what I think about people who give campaign contributions to a certain political party. :)

Edited April 16, 2014 by fortinweb

[navybankerteacher]

It's unfortunate that some posters get so defensive - to the point of being offensive - when someone simply comments on a topic raised by an original poster. I certainly do not care who leaves how much on the table - in fact, I suppose I benefit indirectly from the fact that individual taxpayers advance billions of dollars to the Federal government each year - it means that less interest needs to be paid on the national debt.

 

Over-withholding is best compared to the Christmas Clubs banks used to offer to customers who needed the discipline of a coupon book to force themselves to save. Someone always profits from someone else's in attention to detail.

[sloopsailor]

It's unfortunate that some posters get so defensive - to the point of being offensive - when someone simply comments on a topic raised by an original poster. I certainly do not care who leaves how much on the table - in fact, I suppose I benefit indirectly from the fact that individual taxpayers advance billions of dollars to the Federal government each year - it means that less interest needs to be paid on the national debt.

 

Over-withholding is best compared to the Christmas Clubs banks used to offer to customers who needed the discipline of a coupon book to force themselves to save. Someone always profits from someone else's in attention to detail.

 

And yet you continue to question the intelligence of people who don't follow your personal opinion on this. You aren't "simply commenting on a topic". You are passing judgment on people who do things you obviously don't approve of. Saying that a particular practice is not something you want to do is one thing. But to judge people who do as "careless" and subject to "inattention to detail" and lacking "discipline" under the assumption that they must by default be foolishly managing their money is another. It's a shame you can't see that through your prejudice, and instead stand your ground and make it worse by now judging them as being "so defensive - to the point of being offensive".

 

Keep digging that hole. Or better yet, use all that money you don't waste by being a much better person than they are and hire someone to help you dig it so you don't get your money managing hands dirty. Either way, you are out of line.

Edited April 16, 2014 by sloopsailor

[nolesrule]

I usually pay somewhere in the neighborhood of $500 to $1000 in April, which is perfectly fine with me.

 

But then I'm a self employed owner of an S-Corp. I built a spreadsheet that I plug in all our expected income variables into (salaries, dividends, interest, net business profits, taxes withheld from paychecks) and it spits out how much I'll probably pay in taxes and what percentage of income that will be, and what percentage of my estimated business profits need to be withheld to hit the estimated tax number. I set aside a percentage of monthly business profits slightly higher than that into a savings account, and then pay a slightly lower percentage quarterly.

 

After I pay whatever I owe in April, any tax money I had set aside in my tax savings account for the previous year (plus the interest earned during the calendar year) that is leftover gets swept into our general savings account.

 

Using this method, for 2013 I paid the IRS $965 this month and gave myself a $553 tax refund. :D

 

This method works really well for us, but it takes some discipline and knowledge of Quickbooks, MS Money (or Quicken) and Excel, and knowledge of where to find tax tables online.

[Warm Breezes]

It's unfortunate that some posters get so defensive - to the point of being offensive - when someone simply comments on a topic raised by an original poster. I certainly do not care who leaves how much on the table - in fact, I suppose I benefit indirectly from the fact that individual taxpayers advance billions of dollars to the Federal government each year - it means that less interest needs to be paid on the national debt.

 

Over-withholding is best compared to the Christmas Clubs banks used to offer to customers who needed the discipline of a coupon book to force themselves to save. Someone always profits from someone else's in attention to detail.

 

We wouldn't be defensive if you didn't mock those who make different decisions as you as "careless" and having an "in attention to detail". Seriously think about it. How much time do you spend with your "attention to detail" in coming up with your perfect number to withhold to get you to zero or how much money do you pay others to come up with that number? If I spent more than 5 minutes doing it then the cost of my time would be more than what I lost in interest. I don't need that money sitting in my savings making miniscule interest. Who cares if the government makes an extra couple bucks off my money if it cost me more to calculate the magical withholding number. So whose way makes the most financial sense? IMHO mine does. IYHO yours does. It doesn't matter. It is a personal decision not a matter of financial irresponsibility that you are trying to make it out to be.

 

FWIW I don't need to force myself to save. I have "rainy day funds", 401ks, IRAs, college funds (that will fully pay the tuitions of both my teens over the next few years) and a house that will be fully paid for in the next couple of years. When I get raises I increase the amounts that go into these funds. I have more than enough sitting in the bank and in my investments to retire in comfort and I am still 18 years away from retirement. When DH and I married we had no savings and were living in a trailer park so all this was saved by us over the last 25 years. Yet with all this our vacations come from the money received from my bonuses and our tax returns. We've never had a year when that fund was dry and we couldn't take at least one vacation, most years it was muliple vacations. I find your claims that because people don't take the time calculate that perfect tax withholding number they are "careless", "inattentive", and "poor savers" to be a joke.

Edited April 16, 2014 by Warm Breezes

[ducklite]

I hope you do not really think that anyone (other than the IRS) cares when you file your return, how much or how little your return will be, or is impressed by the fact that you do not think anything about money.

 

 

I certainly think about money, but I'm not obsessed with what amounts to pennies in the big picture. It seems that you are the one with the money issues.

[navybankerteacher]

We wouldn't be defensive if you didn't mock those who make different decisions as you as "careless" and having an "in attention to detail". Seriously think about it. How much time do you spend with your "attention to detail" in coming up with your perfect number to withhold to get you to zero or how much money do you pay others to come up with that number? If I spent more than 5 minutes doing it then the cost of my time would be more than what I lost in interest. I don't need that money sitting in my savings making miniscule interest. Who cares if the government makes an extra couple bucks off my money if it cost me more to calculate the magical withholding number. So whose way makes the most financial sense? IMHO mine does. IYHO yours does. It doesn't matter. It is a personal decision not a matter of financial irresponsibility that you are trying to make it out to be.

 

FWIW I don't need to force myself to save. I have "rainy day funds", 401ks, IRAs, college funds (that will fully pay the tuitions of both my teens over the next few years) and a house that will be fully paid for in the next couple of years. When I get raises I increase the amounts that go into these funds. I have more than enough sitting in the bank and in my investments to retire in comfort and I am still 18 years away from retirement. When DH and I married we had no savings and were living in a trailer park so all this was saved by us over the last 25 years. Yet with all this our vacations come from the money received from my bonuses and our tax returns. We've never had a year when that fund was dry and we couldn't take at least one vacation, most years it was muliple vacations. I find your claims that because people don't take the time calculate that perfect tax withholding number they are "careless", "inattentive", and "poor savers" to be a joke.

 

Congratulations.

[Daytonasailor]

Tax refund is like we have done for the past ten years. You refund what you have made to the government throughout the year.

[Katgoesonholiday]

This topic amuses me because I am just in the middle of doing my tax return and am hoping for a nice payout.

 

In previous years we have tried to calculate it as closely as possible but its just been too much hassle. We had to fill out forms for special tax codes, keep on top of the tax law - which has changed significantly here in NZ as regards to loss attributing companies and depreciation - and monitor our expenses/losses against our forecasts, adjusting things if we have some major repair work to do or if nothing goes wrong and we don't have maintenance to claim a loss against.

 

This year we have kept the highest tax rate throughout the year and accordingly paid more in tax each month than we needed to. So we hope to get a refund that will cover the accountants bill and maybe give us a few $$$ over for our upcoming cruise.

 

Do I need the 'enforced motivation' to save? Nope. I manage to save quite nicely without it and I am the queen of squirrelling money away in accounts my husband only learns about when we need it. But I'd prefer to get a tax refund than find I haven't calculated things correctly because of complicated changes to depreciation and loss attribution and end up having to pay not just outstanding tax (plus the accountants bill) but also provisional tax for the following year because I owed money this year.

 

I'm a mom and a property investor - not an accountant. I prefer to play it safe with the taxes and save all my risk taking for buying houses and taking my kids on fun outings.

Edited April 16, 2014 by Katgoesonholiday

[BlueRiband]

....Over-withholding is best compared to the Christmas Clubs banks used to offer to customers who needed the discipline of a coupon book to force themselves to save. Someone always profits from someone else's inattention to detail.

 

Just one reason why the Christmas Clubs fell out of favor - people began to realize that they were getting zero interest for their money and became angry that the banks would do this. When the IRS does this however it's somehow seen as a windfall from a benevolent government. Go figure.

 

Well, with bank interest being near zero right now it probably doesn't make any difference over the course of one year. IRS refund, bank account, cash inside a sock in the dresser drawer - same difference.

 

It's not so much a problem if somebody over-withholds taxes to fund a cruise. It is however a big problem when somebody goes into debt with double digit interest to fund a cruise. :eek:

[jamessemaj]

Bottom line, a cruise is a great way to spend a refund. I don't look at it exactly that way, but consider all liquid assets available and a refund is just a part. I have tried in the past to minimize withholding but did get fined once for not withholding enough, so I increased the amount of withholding and get a refund.

 

As others have pointed out, interest lost is so minuscule as to not be worth the bother. So to the OP, I say, yes, I sort of use the refund for a cruise.

[momofmeg]

Does anyone else use there tax refund as a vaction fund . This has been a good system for us, we have done this since we were married in 76 and most years we did get to do something. Over the years we have moved up in refunds and trips , we spend more than our refund but it is a good start .

 

Well TOWARD a cruise-we never get enough to fully pay for a trip-we usually get around $2000 back. Well that would pay for a 3 or 4 day cheapo cruise! Lol! When you consider travel fare, hotels, food while traveling, excursions,etc. there is no way we could take a 7 day cruise for that amount.

[MCAT48]

Honestly, if you can't use it on vacation than what am I supposed to spend it on? Should I put it in the bank to collect $0.01 every month on it til the day I die?

[dolittle]

Wow I was just trying to post something topical for the date yesterday and I like to thank all of you for your money advice. Just for the record We don't ''depend '' on a refund just use it.I have in the past posted on ''how do you afford so many cruises threads'' and told people my method house paid off (small house smaller bills) car paid off and 0 creditcard bills or debt at all .So to those that think I should not be cruising truly Thank you for your input.