Curse of the Tax Refund

[Inspector Lee]

Has anyone experienced the Curse of the Tax Refund? For example, I did my taxes last week and am expecting a refund. Since then, I have had a flat tire which cost me about $140 because the tire stores recommend you replace tires by the pair. Also, out of the blue I am having battery issues with my iBook which will set me back at least another c-note.

This whole concept was spawned (or more accurately pegged) by a friend of mine on the West Coast. Last year, after doing his taxes and getting a refund, he was hit with "a thousand dollar job" on his car.

Anyone had a run-in with this? Car problems, senseless theft, emergency dental problems involving you or family members.

[Vader]

Haven't really had anything like that, but if anything does happen, I will share it, once we get the refund.

[Mudbug]

mine came in the form of a full engine replacement for my 2000 model Dodge Intrepid last year, roughly 2 weeks after getting the refund. Thankfully <knocks on wood> I haven't had any major issues this year, and I've already got the refund.

whew.

[CorvusCamenarum]

Could be worse. Here in AL, the state government requires that you declare any tax refunds you receive as income. Welcome to double taxation, again.

[blackfox]

sadly, no refund for me again this year...

Mudbug, I have to ask how you had to replace an engine on only a four-year-old car. My current car is from 1976, and still on it's original engine. Yay Dodge, I guess.

Also, I would've thought that unless you opted for a rebuild, that the cost of replacement would've been more than the car was worth (ie time to buy another car)

A refund curse story of the past:

In 1998, a week after getting a tax refund, My wallet fell out of a hole in my back pocket, filled with about $500 and all my ID's. Not recovered. Two days later, lost my passport in the same manner (force of habit with regards to the pocket). Sucked.

[Kwyjibo]

I decided to get a new powerbook after i got my tax rebate and summer bonus .... does that count?

[baby duck monge]

Could be worse. Here in AL, the state government requires that you declare any tax refunds you receive as income. Welcome to double taxation, again.

that is really wrong. it doesn't sound like it should be legal, but hey - when does the gov't really worry about such things when it comes to screwing you over? of course, the moment even the slightest thing could be going in your favor, they jump all over it and find some way to take it away... boo that! :(

[virividox]

I decided to get a new powerbook after i got my tax rebate and summer bonus .... does that count?

maybe only if it had battery problems hehe

[ziwi]

I believe the logical explanation for this phenomenon - is called "Murphy's Law" and it doesn't just happen with a refund from the IRS - Enjoy that you were able to get one - with the deficit the way it is and going in the wrong direction it won't be long till they have to hike the taxes and refunds will disappear...

[stubeeef]

I believe the logical explanation for this phenomenon - is called "Murphy's Law" and it doesn't just happen with a refund from the IRS - Enjoy that you were able to get one - with the deficit the way it is and going in the wrong direction it won't be long till they have to hike the taxes and refunds will disappear...


Refunds are based on paying too much. Infact over 1 billion dollars in refunds are not claimed each year, usually for things like forgeting to deduct home mortgage interest. This is my money, and if the government owes me a refund, then I paid too much and the government got to use it interest free.
I wish we would spend less on government and reduce taxes, or maintain to rid the deficet while reducing cost.
I encourage those who are able to, change your withholding to more accurately reflect what you will owe, that way you will get (if you normally get a refund) a small monthly raise.
The last few years I have lowered my withholding so that the refund matches my tax preparers fees, I pay him when the refund gets here.

[Chip NoVaMac]

mine came in the form of a full engine replacement for my 2000 model Dodge Intrepid last year, roughly 2 weeks after getting the refund. Thankfully <knocks on wood> I haven't had any major issues this year, and I've already got the refund.

whew.

Do some research on the web. Many car companies have hidden warranties for bad transmissions and bad engines. Most that I have heard of are for Chrysler products.

[Chip NoVaMac]

Could be worse. Here in AL, the state government requires that you declare any tax refunds you receive as income. Welcome to double taxation, again.

Going OT here, but many states do this (including Virginia). But think about it, you never really paid taxes on that refund money in the first place. You overpaid, and and that was income in the new tax year. So really there is no double tax, unless AL is doing something that other states don't.

[Chip NoVaMac]

Refunds are based on paying too much. Infact over 1 billion dollars in refunds are not claimed each year, usually for things like forgeting to deduct home mortgage interest. This is my money, and if the government owes me a refund, then I paid too much and the government got to use it interest free.
I wish we would spend less on government and reduce taxes, or maintain to rid the deficet while reducing cost.
I encourage those who are able to, change your withholding to more accurately reflect what you will owe, that way you will get (if you normally get a refund) a small monthly raise.
The last few years I have lowered my withholding so that the refund matches my tax preparers fees, I pay him when the refund gets here.

With each post we are getting closer to going to the Political Forum on the topic. I am even guilty of this. Lets try not to do that. :)

Trying to get closer to the topic at hand, some of us do this as a modest "forced savings" plan. I use my refund to pay off "interest free financing" offers. Or if that is not needed to treat myself to something special. One year I did have to use it to buy a water heater and new tires (sort of like the original post).

[strider42]

Could be worse. Here in AL, the state government requires that you declare any tax refunds you receive as income. Welcome to double taxation, again.

I could be wrong about this, but I believe in California that money paid to federal taxes do not count as taxable income for the state. So when you get a refund, the state collects tax on the money since it was previously untaxed. It looks like double taxation, but its not. I imagine other states are similar, or that I'm completely wrong.

On the other hand, I owe the government money every year (I have nothing to itemize, so I just take a standard deduction), and I'm ok with that. it means the money was in my bank account earning interest instead of the governments. So if you are concered about being double taxed, you might want to reevaluate you're w2 deductions so you don't get such a large refund.

[CorvusCamenarum]

Going OT here, but many states do this (including Virginia). But think about it, you never really paid taxes on that refund money in the first place. You overpaid, and and that was income in the new tax year. So really there is no double tax, unless AL is doing something that other states don't.

Actually, yes you already have paid taxes on it. A refund is the amount you had taken out of your salary above and beyond what you should have paid. You shouldn't have paid the extra in the first place, but the system is designed to let the government treat itself to a nice interest-free loan at the taxpayer's expense. So basically, you're having more money taken from the start than should be taken, and being taxed for it.

[Roger1]

Our tax rebate goes to paying off bills. The bills usually occur every December when my car decides to crap out.

[stubeeef]

With each post we are getting closer to going to the Political Forum on the topic. I am even guilty of this. Lets try not to do that. :)


You're right :)

[Chip NoVaMac]

Actually, yes you already have paid taxes on it. A refund is the amount you had taken out of your salary above and beyond what you should have paid. You shouldn't have paid the extra in the first place, but the system is designed to let the government treat itself to a nice interest-free loan at the taxpayer's expense. So basically, you're having more money taken from the start than should be taken, and being taxed for it.

I take issue on this, and if you want to do a thread in the PF on the specific topic that you are talking about, I will be happy to follow.

To try and stay more on the topic at hand; as mentioned, you can take and limit your exposure to excess taxes being collected. And as mentioned there are those (myself included) that use it as a forced "savings plan". It does help as we are seeing in the "curse" of the tax refund.

The reality is that few of us have the discipline or the financial capability to weather sudden "loses". I have always felt that starting in middle school and continuing through high school that we need better education on spending and saving.

It is funny that a customer and I talked about this very topic the other day. Their take (and they are on the way upper side of income/savings according to them) is that it is all well and good to put that same amount that is paid in excess taxes into a savings account. But they felt that (at least in the DC area) the need to dip in to that savings account is too great, and that most do not have the fortitude to stay away from that savings account unless truly needed.

So in the end we have those that are both blessed and cursed by having too much tax taken out.

[stubeeef]

Put the refund in an IRA asap, best to do it the day you get it.

[Chip NoVaMac]

Put the refund in an IRA asap, best to do it the day you get it.

Good advice. Though the reality as seen by many here so far, is that either through our own fault, or just our lot in life ("it's not a lot, but it is a life" :D - from I think Antz) being able to save for a new engine or new tires to keep us going to our jobs is hard.

What, most of us are a paycheck or two away from financial disaster IIRC.

[Mudbug]

Do some research on the web. Many car companies have hidden warranties for bad transmissions and bad engines. Most that I have heard of are for Chrysler products.

I'm already part of the class action suit about it - there's a manuf. defect in the engine of every chrysler with it for a 3 year span - the oil outlets are too small to allow the oil to drain from the pan, quickly leading to catastrophic engine failure around 60k miles. Mine was at 66k. It cause the crankshaft to bend, which in turn chewed out the entire case to the point it was totally gone. I thankfully had it replaced BEFORE it blew up, but not by much.

Ended up costing me aroun $6000 all totalled, which was more than the car was worth, but I was upside-down on it at the time, which meant I pretty much had to fix it, or leave it to rot in my driveway. I chose the former. I'm still quite chapped about it. Don't buy one, ever.

As for getting a refund every year, I've redone my withholdings every chance I've had to get as close to the zero mark as possible, and have found that with the way they do the taxes on my wife's income, I can either pay roughly $500 each year, or get a $2000 refund. Guess which one I do?

[Chip NoVaMac]

I'm already part of the class action suit about it - there's a manuf. defect in the engine of every chrysler with it for a 3 year span - the oil outlets are too small to allow the oil to drain from the pan, quickly leading to catastrophic engine failure around 60k miles. Mine was at 66k. It cause the crankshaft to bend, which in turn chewed out the entire case to the point it was totally gone. I thankfully had it replaced BEFORE it blew up, but not by much.

Ended up costing me aroun $6000 all totalled, which was more than the car was worth, but I was upside-down on it at the time, which meant I pretty much had to fix it, or leave it to rot in my driveway. I chose the former. I'm still quite chapped about it. Don't buy one, ever.

As for getting a refund every year, I've redone my withholdings every chance I've had to get as close to the zero mark as possible, and have found that with the way they do the taxes on my wife's income, I can either pay roughly $500 each year, or get a $2000 refund. Guess which one I do?

Good luck on the CAL. Hope that you get the "real" money that is due to you, not a $3000 certificate good for another Chrysler product. I have always subscribed more recently on buying a Japanese car (Honda, Toyota, Subaru, among others). But after Honda's response to fires with the CRV, I am wondering who can we trust as a car company.

I know that when i bought my Subaru Baja, I really wanted to go with the PT Cruiser. But after my Mom's Duster and electrical problems, and more recently friends with Caravans with engine and tranny issues, I didn't want to test fate.

LOL, in your tax situation, I have no real idea. I know that trying to come up with $500 for taxes is a hard push living in the DC area, being part of the working poor. Given the choice, I think you know where I would come in on. :D

[Chip NoVaMac]

Has anyone experienced the Curse of the Tax Refund? For example, I did my taxes last week and am expecting a refund. Since then, I have had a flat tire which cost me about $140 because the tire stores recommend you replace tires by the pair. Also, out of the blue I am having battery issues with my iBook which will set me back at least another c-note.

I do feel for you on both fronts.

As for the tires, have a tire slashed - only to find out that the tire has been discontinued. And with AWD being told that you have to have four of the same tire on all four wheels. :eek: Lucky for me I took and wen to a junk yard and found a tire that closely matched the miles I had on it.

And my PB battery seems to be going, despite limited use. I have tried most of the tricks mentioned in the threads here - to no avail. My battery level drops significantly when in the sleep mode. Saving grace right now is that have a "notebook" with long battery life is not a real need right now.

Just remember the the "Man upstairs" never gives you more than you can handle at one time. It just seems that way. :D

[plinden]

Has anyone experienced the Curse of the Tax Refund?

Yep - I was all set to get a new PowerBook last May with my tax refund, but was then hit by a $2800 property tax bill (ok, that's every year, but I'd forgotten about it), a $1000 car service bill, and ...


... a new baby on the way (born Dec 15th - at least she gave us another personal allowance for 2004)

[Chip NoVaMac]

Yep - I was all set to get a new PowerBook last May with my tax refund, but was then hit by a $2800 property tax bill (ok, that's every year, but I'd forgotten about it), a $1000 car service bill, and ...


... a new baby on the way (born Dec 15th - at least she gave us another personal allowance for 2004)

Congrats on the new tax deduction!

Is there any way you could add the property tax bill to your mortgage? Or in the least have the opportunity to do it quarterly?

And so sorry to hear about the $1000 car service bill. That sucks.

[relimw]

You get refunds? :eek:

For the first time ever, I got a tax refund check last year. In June I landed in the hospital for a week, and then had my gallbladder out in October. Hmm, maybe I don't want a refund this year after all.....

[Inspector Lee]

And my PB battery seems to be going, despite limited use. I have tried most of the tricks mentioned in the threads here - to no avail. My battery level drops significantly when in the sleep mode. Saving grace right now is that have a "notebook" with long battery life is not a real need right now.

What makes this so infuriating is I am already having PB battery problems. My in-house gf and I basically share two computers. And by some strange whirlwind of events, I tend to always be using the PB. :D

Up until Saturday, the little iBook was working like a charm. But then it went kaput.

Nonetheless, you are right. There are more important things to be pissing and moaning about then notebook batteries. I've got a roof over my head, not too bad of a job and all of my faculties.

[Chip NoVaMac]

Nonetheless, you are right. There are more important things to be pissing and moaning about then notebook batteries. I've got a roof over my head, not too bad of a job and all of my faculties.

How well I know that! About a month ago I was diagnosed with Bell's Palsy. In many ways its sounds worse that it is, for most it is a temporary paralysis on the left side of the face. Causes for it vary. At 45+ yo, I thought I was having a stroke!

It did show me that I needed to take better care of myself. And that there are certain things that are more important in life. your last sentence rang true for me in so many ways. Not to mention food on the table.

At the same point, if you can make a stand that sends a positive message that should not be ignored. For me it was a renewed sense of what is right and wrong in the world around me.

And I have sworn that as long as I can think and communicate, I will not be silenced. But to worry about myself, that is secondary. For many years ago I was told by a minister in his sermon, that as long as one has faith - God (or the higher being you believe in) will not let you go without shelter, food, or clothes on your back. And through my life's experience, God has not yet let me down.