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Talk about gratitude!

My son "Joshua the Mercenary" turns 17 on Wednesday the 20th. In 2005, he filled out his W-4 and, of course, they overwithheld his taxes and he got a refund. For some reason, they gave him a W-4 for 2006 and he asked me to fill it out and, of course, he had zero withholdings.

But his friends are all getting refunds and he says it's my fault he isn't getting one! I told him to tell his friends that instead of overpaying his taxes, his refund has been earning interest all year.

He gave me a dismissive look and started to walk away. When I said "Hey, Josh, I can get you a $1000 refund next year if it's ok with you to get $20 to $30 less each paycheck. He looked at me like I was crazy and said "No way."

Dick

Reply to
Dick Adams
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...a tale too sad to quote.

When they're young they step on your toes. When they grow up, they step on your heart.

Reply to
Phil Marti

Your son's arithmetic and financial literacy are about average for the American public, unfortunately.

Reply to
NoSuchPerson

snipped-for-privacy@panix.com (Dick Adams) posted:

Thanks for sharing that, Dick. It says so very much about the complete lack of basic economic education in today's schools.

Bill

Reply to
Bill

Thirty years ago I worked for H&R for one tax season. After doing one couples taxes, I told them that their tax liability for the year was $2600. They were aghast. "Wait", I told them, "You've already paid $3200 so you will be getting a refund of $600."

They were not concerned about the amount of the tax. They were only concerned about the amount of the refund. Needless to say, I changed the way I presented the news at subsequent tax returns.

Personally, I wish there was NO withholding. If everyone had to write a check on April 15th, I'm sure Congress would be spending a lot less than they are today.

Reply to
NadCixelsyd

"NadCixelsyd" wrote

Especially if we went to the polls to vote on April 17th.

Write that big check, then vote the ba$%^&ds out of office.

Reply to
Paul Thomas, CPA

You expect gratitude from your son??!!

Reply to
PeterL

So I'd like to take the contrarian position here. For most people, if they reduce their withholdings and go home with a bigger paycheck, they're likely to spend all of it. But if you get a lot of money back like $1000, you'll be tempted to put all or part of it into an IRA, regular savings, etc.

Reply to
removeps-groups

This is completely anecdotal, but I have many more clients that contribute to retirement plans (IRA, Roth, 403b, etc) via monthly electronic funds transfer than I do that make lump sum deposits.

Reply to
kastnna

Um, yeah, that's why RALs are so popular. People want to borrow that money so they can get it into an IRA or savings ASAP. 8-)

Reply to
NoSuchPerson

wrote

Who do you know, and where do these people live?

Reply to
Paul Thomas, CPA

This seems very unlikely. I suspect most people view the refund as a windfall or gift from the government. Which is why they're disappointed when they're not getting one. And when they get it, they rush to buy "stuff" with it.

What about the "stimulus package" checks that are going to be coming this year? Do you expect most people to put this into their savings? That's not what the feds are expecting -- money in IRAs doesn't stimulate the economy.

Reply to
Barry Margolin

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