How do I get the best refund at end of year?

[coop201045]

I am a single mom to 1 kiddo. I make aprox $30,000 each year and it seems I am either paying taxes at the end of the year, or else get a refund of $200-$300. I've filed with 1 and 2 exemptions but it doesn;t seem to help.Anyone know how I should file my w-4 so that I get a significant refund???

Thanks
What is the name of your state (only U.S. law)? Oregon

 

[cyjeff]

I recommend the services of a certified tax specialist.

One of the chains will do.

Ask him/her how to maximize your money back.

I will tell you, though... that I try to organize my taxes so that $2-300 is all the give there is.

getting a big tax check back is just giving the government a no interest loan for a year.

 

[TinkerBelleLuvr]

Every year, the IRS updates their withholding calculator. Check Internal Revenue Service and under individuals, you'll find where you can go thru their calculator. Obviously, it is set so that you can near getting zero as a refund. If you want more of a refund, then just start reducing the amount of exemptions you are claiming.

Now, if it were me, I would try to keep mine close to zero and just automatically have $25 to $50 just go directly into savings that you don't touch. You then have money at the end of the year and you can even get interest to boot!

 

[efflandt]

I agree with the others. People who brag about getting a big refund are just fooling themselves. If your withholding is correct, you should only get a small refund or owe a small amount. That way you get more each paycheck instead of having to wait until the following year to get "your" money back. I considered myself doing well when I got less than $150 refund one year and had to pay less than $150 another year, despite a bunch of IRA to Roth IRA conversions (with conversion tax paid from W-4 adjustment).

 

[LdiJ]

I agree with the others. People who brag about getting a big refund are just fooling themselves. If your withholding is correct, you should only get a small refund or owe a small amount. That way you get more each paycheck instead of having to wait until the following year to get "your" money back. I considered myself doing well when I got less than $150 refund one year and had to pay less than $150 another year, despite a bunch of IRA to Roth IRA conversions (with conversion tax paid from W-4 adjustment).

While I agree with this, there are a lot of people out there who are getting refundable credits (EIC, Additional Child Tax Credit, First Time Homebuyer's Credit). Those are the vast majority of the people getting big refunds.

Adjusting your withholding doesn't make any difference there.

 

[CJane]

While I agree with this, there are a lot of people out there who are getting refundable credits (EIC, Additional Child Tax Credit, First Time Homebuyer's Credit). Those are the vast majority of the people getting big refunds.

Adjusting your withholding doesn't make any difference there.

Shouldn't a single Mother of 1 who only makes $30K qualify for the EIC?

 

[HappyWanderer]

Odd question. I agree with what everyone else said.

What is your goal? More money, or more refund?

The shifting of your exemptions on your W-4 will affect the money you have through the year and the refund, but won't really change how much you pay in taxes.

Me, I'm an overwithhold guy. I KNOW, by economic principles, that is dumb. But, I also KNOW, me. If I have the money through the year, I'll spend it. I recognize the principle of paying yourself first (putting it away in savings), but love dating, vacations, computer games and nice dining. Better for me to save and then put the refund in a ROTH. (I file before April 15 and will take the hit on my joy for a few weeks waiting for my refund.)

It's all about knowing yourself and your goals.

What are you trying to accomplish?

 

[LdiJ]

Shouldn't a single Mother of 1 who only makes $30K qualify for the EIC?

Yes, but not a huge amount of EIC.