Income vs Tax Refund

[54regcab]

Just a quick poll to see if people with lower incomes actually do get larger refunds. The median household income in the US is $43K and the average tax refund is about $2K. For 2006 we are over $43K and refund will be uder $2K (if we even get a refund).

[Athena53]

You need an "I'll have to pay extra" option. For the record, over $43K income and we're paying extra. It's hard to predict our income because of the investment income on the mutual funds (could be losses in a bad year) and we've owed in 2004, 2005 and will again this year. I've made some adjustments to increase the withholdings to try and avoid penalties, but to me a tax refund just means you loaned $$$ interest-free to the government.

Edited January 21, 2007 by Athena53

[hurricanesfans27]

two years w4 form married claiming 9 now 10. Last year over 100k income got back 9k refund this year same income got back over 4k. from what Ive seen the larger the income the larger the refund no matter what you do.

[angeleyeskkhr]

two years w4 form married claiming 9 now 10. Last year over 100k income got back 9k refund this year same income got back over 4k. from what Ive seen the larger the income the larger the refund no matter what you do.

 

 

That's cuz you're probably looking for even more deductions or it just works out that ya have 'em.

[2BlackCats]

All I know is that ever since I got married, I owe!! It stinks ~ I miss my refunds

[hegemony]

no refund here...

[squirrelgirl]

I've only received a refund once since I've been married (6 years) - and that was last year when DD was born.

[Necie R]

DH and I make twice the average household. We also have three kids to claim. We always get something back. I claim quite a bit on my W4 but it just always works out where we get something back. Next year I hope to have a house AND I will be filing Head of Household (DH and I are separtating) so I'll still get everything that I put in (at least).

[Athena53]

from what Ive seen the larger the income the larger the refund no matter what you do.

 

I wish. Our joint income is pushing $200K and I sent in estimated payments of $4,500 (in addition to hefty withholdings from my paychecks, of course) and would not be suprised if we owe more. Reasons:

 

1. We live in a low COL area and chose not to mortgage ourselves to the hilt- thus, low interest and property tax deductions relative to our income. I had much bigger deductions in Bergen County, NJ. I'm not complaining.

 

2. DH is semi-retired and gets Social Security (he's 68). 85% of it is taxed because of the amount of our joint income. Nothing is withheld when it's paid to him.

 

3. Getting married in 2003 meant I was no longer Single Head of Household. Believe me, if there were a way to be married in the eyes of our church but not in the eyes of the state, DH and I would do it.

 

4. Very good years in the market- you don't know for sure how much of a capital gain distribution you'll get, or what realized losses they'll declare on mutual funds, till year-end. Hard to plan for.

 

So, it's possible to have a healthy income and end up owing additional taxes.

[attaboy]

Athena - regarding your #3, I know that you can have a justice marry you in the "states eyes" and not have a religious service, so I'm guessing you could have your religious elder (priest, rabbi, minister, imam, deacon, etc.), marry you and simply not file the state's papers: married in the "eyes of god" only - never thought of that....

 

I know gay people get married all the time by religious leaders (of certain smaller denominations) and not have any legal papers filed, so I guess that it could be done for you as well.

[Athena53]

Athena - regarding your #3, I know that you can have a justice marry you in the "states eyes" and not have a religious service, so I'm guessing you could have your religious elder (priest, rabbi, minister, imam, deacon, etc.), marry you and simply not file the state's papers: married in the "eyes of god" only - never thought of that....

 

Nope. If you have the right to perform marriages in a state, you can lose that right if you marry people and don't notify the state. My dear late grandfather asked a priest about that because they didn't want his lady friend to lose her late husband's pension if they married- the priest said he couldn't do that. They married anyway but there are plenty of grandpas and grannies who don't, for that very reason.

 

In most states, same-sex blessings are not considered marriage and thus there's no obligation to report them as such.

 

What we have considered- and may do yet- is getting a civil divorce. As far as we're concerned, we'd still be married, but the state wouldn't think so. There would be a lot of paperwork to make sure we'd have whatever legal privileges we'd want to retain (wills, powers of attorney, etc.) but it could be done.

Edited January 22, 2007 by Athena53