We owe $44 in federal taxes for 2015! I love it when we don't over withhold!

[CTyankee]

I don't understand why people over withhold and think they are getting a "gift" from the government. It doesn't make sense to me. Is it some sort of savings plan? I'd rather have the money all year round than a refund at tax time. The $44 is fine. We had our money all through out the year and that helps with our monthly budget no end...

[ohnoyoudidnt]

1. I can see it helping some people who have trouble saving money and are impulsive.

That check at the end of the year could be for a big purchase that they wouldn't have had the will power or self-discipline to save.

[CTyankee]

2. I think having a monthly budget also helps. I found that when I did a simple budget

labeled Expenses and Income I got a better understanding of my spending. So many people don't do that and it can have bad outcomes. And it's not difficult. I just took a yellow note pad and drew a line in the middle and labeled it. that way, no nasty surprises and bad feelings. And it's not difficult!

[jwirr]

3. I don't think many of the working poor think of it this way but

there are reasons to withhold if you are poor.

If you increase your check each payday they figure your food stamps and other benefits from that amount. If you allow it to be withheld then your paycheck is smaller - your benefits larger each month and at the end of the tax year you get a refund that is not counted as income toward those benefits. Plus you have a big check that allows you to buy those big things you cannot have any other way.

Now that I have blown the whistle on all of us I hope that there is no one reading here that will make that the basis for the next cut in benefits for the poor.

[CTyankee]

4. that makes sense, tho. We are not on food stamps or other benefits so there is no real

benefit from our withholding. Plus, I like budgeting because it shows me how much of our income goes where. With that tool, I can look at where I can cut and where I can't or where we are obviously spending too much and need to cut back. It's sometimes a shock, tho, I need to tell ya!

[jwirr]

5. I understand as I have always lived on a budget. You have

to be good at it in order to make it work. In recent years I have kind of lost the knack and run myself into some real problems.

[CTyankee]

6. not really. If you look at your food budget, for instance, It helps to know a ballpark

figure of what you spend each week. If we go outside that amount say on "eating out" you can figure that in another column than y our weekly food (grocery) budget. It's kinda a rough estimate tho. And it's an automatic check on your spending...

[Pakhet]

10. Can't really have a budget when every penny goes out

within 24 hours of being paid

[mythology]

7. For some people

the overholding isn't intentional. Either they had an unexpected kid, or they don't make enough to pay the full income tax, or they lost a job.

Also it can be hard to know what you can deduct, especially if you are the lower end of the economic spectrum.

For example in Massachusetts, I get one level of deduction for student loan debt from undergrad and a different level for grad school student loans. I have no idea how to filter that.

Also these days, I somehow underpay to the feds and have owed the last 3 years. I didn't change anything in terms of my deductions, and my income didn't substantially change.

[CTyankee]

9. Underpaying by a few bucks is good, tho! But you have to look at your expenses, then...

[B Calm]

8. We over withhold because we never know how much we're going to make.

[Rex]

11. Most of the time I notice it is because employees doesn't understand federal tax withholding

and how it works. Even if you explain it to them, they still fill it out wrong.