Always be Owing

[JohnH]

Interesting discussion all around. Lots of different perspectives, and all of them right in their own way.

[Roberts]

And I believe Robert's comment was leading to the fact that in today's market, even a $5000 refund did not cost them very much in lost revenue if saved and invested. For many that is their only savings account.

thank you for recognizing.

Everyone says they save up all the money each paycheck instead of getting a refund. I'm doubtful. When I was taking courses to become a Certified Financial Planner, the instructors said they rented their homes and invested the difference because they would be better off in 30 years and had the numbers to back it up. Same argument. When you are saying this while telling everyone you lease a small Cessna and lease a 700 series BMW, I'm doubtful you are investing all of your "savings". The exact same argument was used for interest only mortgages. Seems those people weren't investing their savings as they had bragged they were.

[AZ-Tax]

"easily solved" with the IRS....mmhhhh

That check problem is easily solved by establishing, at the time of efiling, a payment to the IRS/state.FE

I find it hard to believe anything would be "easily solved" when it comes to dealing with IRS but for those few clients of mine that end up owing, I encourage credit card payment.

[FEDUKE404]

You missed the point

I find it hard to believe anything would be "easily solved" when it comes to dealing with IRS but for those few clients of mine that end up owing, I encourage credit card payment.

Credit card payments usually involve (often quite excessive) additional fees. Why ever go that route?

As for the "easily solved" observation: My point was that by having a direct debit authorized at the time of filing there is a much higher likelihood of NOT "dealing with the IRS" in the first place. You can completely avoid the issues related to paper checks/mail/IRS processing by that very simple action.

FE

[Golden Rocket]

Use of Money

Some clients try to make you think they are really smart.

One of my favorites (actually SEVERAL fit this description) are the ones that don't want a refund because they "don't want the gubbermint to use their money interest free all year." After all, THEY could be earning interest on all that money instead of letting the gubbermint have it, right?

Half of the people that tell me this actually have zero interest income. They are NOT "earning interest on all that money." And the ones that are earning it are earning maybe 0.43% interest. One of them just earned $27 on a 12-month, $10,000 CD.

One of the guys tells me this every year. He looks like "Toothless" from the movie Deliverance.

[erchess]

Client's choice

To me it's the client's choice. I have clients who just make sure they don't owe a penalty and others who make sure they don't owe more than a certain amount in total, and still others who make sure they have refunds of a certain size. What all my clients have in common is the ability to talk to me and sort through their options.

[RitaB]

Well, there you have it

One of the guys tells me this every year. He looks like "Toothless" from the movie Deliverance.

The proof is in the pudding. And that is going to keep me awake all night.

[taxea]

I understand the reasoning behind your methods and try to come as close as possible to breaking even on my own return, BUT MOST of my clients tell me to figure their estimated vouchers "just so I don't owe at tax time." They understand the error of loaning a bunch of money to the government all year, but don't want a balance due return either. And I believe Robert's comment was leading to the fact that in today's market, even a $5000 refund did not cost them very much in lost revenue if saved and invested. For many that is their only savings account.
If my SB and SE clients end up owing more than a couple hundred (if their income projections were close) then I have failed in my duty. It is a whole lot easier to pay it every month or payday than to come up with a bunch at tax time.

Me too! Goodness letting the IRS have 5K to play with all year is very excessive. Perhaps the client could use it in an emergency situation or put it into their emergency fund which should be 6 to 8 months of expenses. Who couldn't use an extra 5K in ready cash rather than tying it up for a year with no, not even little interest.