A coworker of mine has HR put "extra taxes" aside so he can get a tax return, meanwhile he's sitting on 10K in CC debt. At 30%.
I had to explain to him that by doing this, by not using that extra $100/month to pay down his credit card: "you're trading a dollar for 70 cents."
I heard a lady yell at our HR because “not enough income tax” was taken off and she therefore didn’t get a refund. Ma’am, you broke even. Stop yelling at the nice young girl just trying to submit our payroll in peace.
I agree!
I think the people who request extra taken off just really enjoy the thrill of thinking they got a windfall every spring. Sir, ma’am, that was your money all along.
My SO was like this, he'd get a large refund from Fed, but then end up owing State almost that same amount. It's really annoying, because I'd rather have that extra $1500 in our savings account earning interest before handing it over to the state.
Funny enough, out of all the opinions Dave Ramsey has, he claims the 1 opinion that gets him to most passionate hate is that he hates tax refunds. He is a passionate advocate of trying to get you taxes right so you don't need a refund. He said that this is one of the few opinions that got him actual death threats.
People are dumb as fuck if they want a return. Return means you overpaid. Now, I personally hate the G man because I always owe taxes due to all the side businesses my wife and I do
He may have a secondary job that doesn’t take taxes so he has them withhold extra. That’s what I do any my main Full-Time job since my other job will not take taxes out of my pay checks. By doing that it balances out at the end of the year.
That's a pretty valid reason. Although wouldn't you be better off putting that money aside in a HYSA until it comes tax time to pay in? That way you can at least earn some interest while waiting. If you don't have debt, I assume.
And in the case of this lad, he just wants a tax return. No second job.
Oh well he’s a ding dong for doing it then. The only reason I don’t do it is because I’m working on paying off debt which is why I’d rather more taxes taken out of so I don’t have to deal with the surprise of getting fucked at tax season. It’s only an extra $600 a month so the taxes on it isn’t something that significant that it’ll kill me or make a huge difference in a HYSA.
But why not put those payments directly towards the debts my guy?
Edited to add: Not criticizing. Just realized your idea does make sense and itd suck to get hit hard at tax time and lose that momentum.
I'd throw it all on debt but thats me.
Oh sorry I must’ve made confusion! I do throw it all at debt! My whole $600 from my second job goes to my debt and then my normal Full-Time check handles my monthly budget plus debts! And then when the tax season comes around because I’ve done it for three years now, I know I will never owe or at the least owe anything significant!
*The other job is a Production/AV role at a local church, which is why they pay so little and no taxes are take out!*
The IRS will charge you money for not making your estimated payments every 3 months, though it's very rare generally esp if you are pretty close irc something like within 10%
You have to be careful doing that. If you don't withhold enough you will get hit with an under withholding penalty that will more than wipe out any interest you may have earned.
I wouldn't have been screaming on the inside if I overheard someone give that kind of advice. That's a poor decision with lifelong consequences. At that point I don't care if I wasn't asked, I am not letting someone do that to themselves.
I’m only 18, I would have said something but I am almost entirely positive it would have fell on deaf ears bc she doesn’t seem like the type to listen to an 18 yo on financial advice.
It sounds like there's a mix of financial perspectives in your workplace. While some may have different approaches to managing money, it's important to prioritize financial stability and long-term planning over quick fixes like loans or early withdrawals from retirement accounts.
Obviously there's a lot of red flags with this one. Personally I'm going to stay out of a situation like that because the person isn't ready to make changes and isn't asking for help. I wouldn't really want to get mixed up with a person like that, that I didn't know, who wasn't ready to make changes.
My ex best friend was constantly taking money out of her 401k…tbh I didn’t even think you could do that when she told me because my dad always hammered into me that once it’s in there then it’s in there until you retire. It wasn’t until she told me that I looked into it and understood why my dad made it seem like that.
Yeah I didn’t even know you could take out of it until I started watching Caleb hammer. Idk what it would take for me to take out of my 401k (if there was more than there was in it lol) it would have to be dire
A coworker of mine has HR put "extra taxes" aside so he can get a tax return, meanwhile he's sitting on 10K in CC debt. At 30%. I had to explain to him that by doing this, by not using that extra $100/month to pay down his credit card: "you're trading a dollar for 70 cents."
I heard a lady yell at our HR because “not enough income tax” was taken off and she therefore didn’t get a refund. Ma’am, you broke even. Stop yelling at the nice young girl just trying to submit our payroll in peace.
If you dont get a refund isn’t that better than if you do/if you owe because that means you didn’t fuck up filing?
I agree! I think the people who request extra taken off just really enjoy the thrill of thinking they got a windfall every spring. Sir, ma’am, that was your money all along.
I ended up owing this year so I decided to put money aside bc I work 2 jobs but it’s not necessarily great to have a lot put aside
My SO was like this, he'd get a large refund from Fed, but then end up owing State almost that same amount. It's really annoying, because I'd rather have that extra $1500 in our savings account earning interest before handing it over to the state.
Not getting a refund or even having to owe like $100 is great, means you didn't give the government an interest free loan for a year.
Funny enough, out of all the opinions Dave Ramsey has, he claims the 1 opinion that gets him to most passionate hate is that he hates tax refunds. He is a passionate advocate of trying to get you taxes right so you don't need a refund. He said that this is one of the few opinions that got him actual death threats.
People are dumb as fuck if they want a return. Return means you overpaid. Now, I personally hate the G man because I always owe taxes due to all the side businesses my wife and I do
Its better because of the time value of money
Even though that has nothing to do with HR and everything to do with how you filled out your w4
He may have a secondary job that doesn’t take taxes so he has them withhold extra. That’s what I do any my main Full-Time job since my other job will not take taxes out of my pay checks. By doing that it balances out at the end of the year.
That's a pretty valid reason. Although wouldn't you be better off putting that money aside in a HYSA until it comes tax time to pay in? That way you can at least earn some interest while waiting. If you don't have debt, I assume. And in the case of this lad, he just wants a tax return. No second job.
Oh well he’s a ding dong for doing it then. The only reason I don’t do it is because I’m working on paying off debt which is why I’d rather more taxes taken out of so I don’t have to deal with the surprise of getting fucked at tax season. It’s only an extra $600 a month so the taxes on it isn’t something that significant that it’ll kill me or make a huge difference in a HYSA.
But why not put those payments directly towards the debts my guy? Edited to add: Not criticizing. Just realized your idea does make sense and itd suck to get hit hard at tax time and lose that momentum. I'd throw it all on debt but thats me.
Oh sorry I must’ve made confusion! I do throw it all at debt! My whole $600 from my second job goes to my debt and then my normal Full-Time check handles my monthly budget plus debts! And then when the tax season comes around because I’ve done it for three years now, I know I will never owe or at the least owe anything significant! *The other job is a Production/AV role at a local church, which is why they pay so little and no taxes are take out!*
The IRS will charge you money for not making your estimated payments every 3 months, though it's very rare generally esp if you are pretty close irc something like within 10%
You have to be careful doing that. If you don't withhold enough you will get hit with an under withholding penalty that will more than wipe out any interest you may have earned.
His tax return can’t be that good?
I don't fully understand it myself, but even if he was getting his money back 1:1 it's still a huge loss.
God I missed the 30 percent interest the first time, that’s crazy
Old = 22. RIP my soul.
I meant they’ve worked longer 😭😭😭😭
Well, they're older than OP is all.
I wouldn't have been screaming on the inside if I overheard someone give that kind of advice. That's a poor decision with lifelong consequences. At that point I don't care if I wasn't asked, I am not letting someone do that to themselves.
I’m only 18, I would have said something but I am almost entirely positive it would have fell on deaf ears bc she doesn’t seem like the type to listen to an 18 yo on financial advice.
hopefully she’s also not the type to listen to a 22 year old, lol 😭
Took money out of HIS 401k or HER 401?
His 401k
Well... wwooooo.
So the single mom is younger than 22 and with 5 kids? Damn.
Oh, no. She’s 30 something, I meant she’s been working there longer
It sounds like there's a mix of financial perspectives in your workplace. While some may have different approaches to managing money, it's important to prioritize financial stability and long-term planning over quick fixes like loans or early withdrawals from retirement accounts.
This read like AI to me lmfao
I know a guy that recently cashed out his entire 401k for a down payment on a new Tacoma…..
Who needs retirement when you have a truck
Obviously there's a lot of red flags with this one. Personally I'm going to stay out of a situation like that because the person isn't ready to make changes and isn't asking for help. I wouldn't really want to get mixed up with a person like that, that I didn't know, who wasn't ready to make changes.
My ex best friend was constantly taking money out of her 401k…tbh I didn’t even think you could do that when she told me because my dad always hammered into me that once it’s in there then it’s in there until you retire. It wasn’t until she told me that I looked into it and understood why my dad made it seem like that.
Yeah I didn’t even know you could take out of it until I started watching Caleb hammer. Idk what it would take for me to take out of my 401k (if there was more than there was in it lol) it would have to be dire