Large Refund: Educate me - Page 2

[goldfishkate]

Originally Posted by sunflower.mama 

These threads always make me a tad nervous, because I worry that someone who really needs an extra $150 in instantly spendable cash a month might be very adversely impacted by a change in tax laws that suddenly increases their income tax.  The "fiscal cliff" almost eliminated the child tax credit.  That would have increased people's average tax bill by $1000 per child.

Do you have a source for this? All the information I've found says the Child Tax Credit was extended for 2013 and beyond.

[Carson]

She said it ALMOST eliminated the credit. It was extended.

[3timesamom]

Yes, when talking with our preparer, we discussed our with holdings. We had WAY to much withheld, but had they revised the laws that might not be true. So will change the with holdings modestly. We will be getting a substantial return and most of it is refundable credits. We however over payed over 2,000 in, that we sure could have used.

[ilovemygirl]

It's hard to say what might happen. This year we changed our deductions to get more in our paycheck week by week but we ended up with a refund anyway because of deductions for crazy medical expenses this past year. 

Even if you are debt free and really investing I don't see how the interest on 3k is going to be that significant but getting an unexpected tax bill when living paycheck to paycheck is a big deal and really stressful so I think a lot of people try to avoid that more than anything. 

Also, if you have debt and/or are on a tight budget, the weekly or biweekly amount you get might get eaten up and absorbed into every day expenses. It's harder to do that with a lump sum. My whole refund just gets handed over to pay off debt. I don't treat it as found or fun money. It just goes straight to debt but I doubt that much would actually end up going towards debt if I got it little by little. 

[MonicaP]

I had learned from this thread, thanks for staring it. It's true that a ton of people are getting enormous tax refunds this year. If you know exactly how much you are getting this year, you can get a payday advance loan to help pay for anything you want right now. If you were considering doing a project or just needed to purchase brand new furniture, you can get it now and pay the loan back when your return arrives. [Admin Note: Link removed as we do not permit promotional posting of commercial sites.]

[Carson]

Just beware refund advance loans. They cost you a pretty penny after interest and fees.