Better And Better

If you don't draw yours, I won't draw mine.

Wednesday, March 04, 2009

No pride there.

We just got our tax return back, and it was over $2000. We paid off our interest-free deferred-payment debt on the stone, ceramic, and bamboo that we had bought for the house while renovating. We had 6 more months to do it in, but we don't like having debt out there, so we just paid it.

I'm not particularly proud of this, because I know that I lost a little money in the deal.

Dollars half a year from now will be worth less than dollars today do. Getting those already-discounted materials on interest-free credit for a year meant that we were essentially getting to discount the cost (well, the value of the cost) still further.

That $2k that I got back from Uncle Sugar was an interest-free loan that I made for most of a year. If I had calculated a little more carefully, I could have gone without making that loan. But, in truth, I probably wouldn't have saved it, and that depresses me. And while I could have taken it and invested it to bring a few dollars in interest before paying off the materials debt, I'm lazy enough that I frankly just would rather not worry about it, and would rather pay it off. And that depresses me.

To me, any time that I get a large tax return check, I feel like I'm a big sucker. But I still deposit it and utilize it. Yes, I do.

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4 Comments:

At Thursday, March 05, 2009 8:00:00 AM, Anonymous Anonymous said...

The way taxes are set up here in MN, if I didn't give myself a big federal refund, I'd have a huge state debt (right now it's about 18 percent of my fed refund). I don't like giving the G my money free for a year any more than you do, man, but unless they come up with a .5 for withholdings, I'm stuck.

And of course, the savings I've been diligently socking away will be worth less in November than they are now (to say nothing about the interest rate-barely better than the mattress).

I also feel like a sucker when I realize I planned my mortgage around my income and will be subsidizing those that bought twice the house they could afford on income that was half of what they stated. Grrr...

Thanks for blogging, you're in the morning bookmarks.

Matt
St Paul

 
At Thursday, March 05, 2009 10:08:00 AM, Anonymous Uncle Fred said...

Please explain why you got a refund.

"Receiving" $2K back from the feds in the form of a tax refund indicates that you gave them the free use of $2K between 1/1/2008 and now.

If you were smart enough to adjust your withholding you could have kept that $2K and had the use of it over the past year. You seem to understand that, but also state that you don't have the financial discipline to properly utilize it.

Do a tax estimate for the upcoming year, adjust your withholding to comply with a near-zero tax bill, and, if you can't resist spending it, have it automatically deducted from your paycheck and sent to a savings account.

If you can't resist spending it even then, send it to me so I can earn the interest on it. I'll be happy to send you a check April 15 for the base amount.

 
At Friday, March 06, 2009 10:40:00 AM, Anonymous Baddog said...

Hell man, there are worse things in life than getting your own money back. In California, I may not ever get my state return. Don't feel guilty about it, just use it wisely (and I think you did) and move on. I LIKE getting a big lump sum back even if I just stare at it for a while.

 
At Saturday, March 07, 2009 9:35:00 AM, Anonymous BillH said...

My income is quite variable, so I pay estimated tax thru the year. In late December I had a client push off my last business of the last year into January of this, which lowered the income,so we received a refund this year. I wish I could say we'd planned it, John Galt style, but we didn't. First time for a refund in many years for us though.

 

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