I prefer to be team perfectly even, however, lately I have been team owe. Not fun. This year I think I might be team refund if the no taxes on tips thing works out for me. What I kinda would like to do if I do get a refund is sock it all Into a 401(k) in order to get even more of a refund which I would then sock into the same 401(k). I’m very stupid in these matters though so I really don’t know what’s gonna happen.
Charles, you are not stupid. No one (unless we're lucky and happen to born into a family that isn't weird about money--hahahahaha!) teaches us about this stuff and most of us learn through trial and error. You can file a new W4 with your employer anytime. I hope things work out.
On paper, keeping more money during the year is the better answer. In real life, a lot of people spend what flows through the paycheck and only manage to save what arrives later as a refund. So the refund ends up working less like a tax outcome and more like forced discipline.
That is why neither side is automatically right. The real problem is not getting a refund or owing a little. The real problem is being surprised in April because the withholding never matched the reality of the household income.
Most people do not have a tax problem. They have a planning problem.
I prefer to be team perfectly even, however, lately I have been team owe. Not fun. This year I think I might be team refund if the no taxes on tips thing works out for me. What I kinda would like to do if I do get a refund is sock it all Into a 401(k) in order to get even more of a refund which I would then sock into the same 401(k). I’m very stupid in these matters though so I really don’t know what’s gonna happen.
Charles, you are not stupid. No one (unless we're lucky and happen to born into a family that isn't weird about money--hahahahaha!) teaches us about this stuff and most of us learn through trial and error. You can file a new W4 with your employer anytime. I hope things work out.
On paper, keeping more money during the year is the better answer. In real life, a lot of people spend what flows through the paycheck and only manage to save what arrives later as a refund. So the refund ends up working less like a tax outcome and more like forced discipline.
That is why neither side is automatically right. The real problem is not getting a refund or owing a little. The real problem is being surprised in April because the withholding never matched the reality of the household income.
Most people do not have a tax problem. They have a planning problem.