Curse of the Tax Refund

Discussion in 'Community' started by Inspector Lee, Feb 27, 2005.

  1. Inspector Lee macrumors 6502a

    Inspector Lee

    Joined:
    Jan 24, 2004
    Location:
    East Lansing, MI
    #1
    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.
     
  2. Vader macrumors 65816

    Vader

    Joined:
    Oct 11, 2004
    Location:
    St. Louis, MO
    #2
    Haven't really had anything like that, but if anything does happen, I will share it, once we get the refund.
     
  3. Mudbug Administrator emeritus

    Mudbug

    Joined:
    Jun 28, 2002
    Location:
    North Central Colorado
    #3
    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.
     
  4. CorvusCamenarum macrumors 65816

    CorvusCamenarum

    Joined:
    Dec 16, 2004
    Location:
    Birmingham, AL
    #4
    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.
     
  5. blackfox macrumors 65816

    blackfox

    Joined:
    Feb 18, 2003
    Location:
    PDX
    #5
    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.
     
  6. Kwyjibo macrumors 68040

    Kwyjibo

    Joined:
    Nov 5, 2002
    #6
    I decided to get a new powerbook after i got my tax rebate and summer bonus .... does that count?
     
  7. baby duck monge macrumors 68000

    baby duck monge

    Joined:
    Feb 16, 2003
    Location:
    Memphis, TN
    #7
    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! :(
     
  8. virividox macrumors 601

    virividox

    Joined:
    Aug 19, 2003
    Location:
    Manila - Nottingham - Philadelphia - Santa Barbar
    #8
    maybe only if it had battery problems hehe
     
  9. ziwi macrumors 65816

    ziwi

    Joined:
    Jan 6, 2004
    Location:
    Right back where I started...
    #9
    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...
     
  10. stubeeef macrumors 68030

    stubeeef

    Joined:
    Aug 10, 2004
    #10

    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.
     
  11. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #11
    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.
     
  12. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #12
    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.
     
  13. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #13
    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).
     
  14. strider42 macrumors 65816

    strider42

    Joined:
    Feb 1, 2002
    #14
    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.
     
  15. CorvusCamenarum macrumors 65816

    CorvusCamenarum

    Joined:
    Dec 16, 2004
    Location:
    Birmingham, AL
    #15
    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.
     
  16. Roger1 macrumors 65816

    Roger1

    Joined:
    Jun 3, 2002
    Location:
    Michigan
    #16
    Our tax rebate goes to paying off bills. The bills usually occur every December when my car decides to crap out.
     
  17. stubeeef macrumors 68030

    stubeeef

    Joined:
    Aug 10, 2004
    #17
    You're right :)
     
  18. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #18
    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.
     
  19. stubeeef macrumors 68030

    stubeeef

    Joined:
    Aug 10, 2004
    #19
    Put the refund in an IRA asap, best to do it the day you get it.
     
  20. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #20
    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.
     
  21. Mudbug Administrator emeritus

    Mudbug

    Joined:
    Jun 28, 2002
    Location:
    North Central Colorado
    #21
    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?
     
  22. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #22
    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
     
  23. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #23
    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
     
  24. plinden macrumors 68040

    plinden

    Joined:
    Apr 8, 2004
    #24
    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)
     
  25. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Joined:
    Dec 25, 2003
    Location:
    Northern Virginia
    #25
    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.
     

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