Almost no one I know adjusts their withholding on their paychecks. Given the deductions and exemptions that many tax filers can take, the standard amount taken out of one’s paycheck is more than the actual tax liability.

People receive refunds year after year because too much is withheld. Once an asst mgr where I work said, “Uncle Sam has been good to me” and I thought that really he was being good to Uncle Sam. The gov’t was able to use his money for 0% interest.

The ideal is to get back nothing in taxes and owe little to nothing in taxes at the end of the year.

Even if you use your “refund” to fund your retirement accounts, you lost time of compounding returns by waiting to invest. Readjust your withholding, and put that money in savings that way. Maximize your wealth, don’t share it for free.

Anyhow, I’ll just readjust how much I’ll believe I’ll owe, claim 6 exemptions on my W4 and just give the IRS a flat amount each paycheck to break even at the end of the year. So for this year, remember to deduct an additional $400-800 off if you go this route.

For many people this should help them to reduce their 0% loans to the government.

Whatever extra, even twenty-seven bucks, is going into savings to pad the emergency fund against the December 28 layoff day. Me, I’d feel a lot more stimulated by the promise of, oh…say, a job.

I could see this back-firing big time though. I understand that people didn’t use the first round of stimulus the way the government intended, but at least everyone saw it for what it was – a one time thing. Dividing it up over the year via pay check could have an adverse effect. People will get use to it being there, they will incorporate it into their daily spending, they will start depending on it, and they will be screwed when it goes away.

I’m sure that our state and local representatives are currently working out ways to “help” us spend that money too. They know everyone has a little extra jingle in their pockets now – You can bet your rear-end that tax and service fee increases are right around the corner and those increases (unlike this credit) will be permanent.

We may not like it, but it will do what they want it to.

1. They use it on discretionary spending – vacations, luxury items, etc.

2. If they do use it towards bills, it doesn’t even effect their standing with the amount of debt they generally have (or perhaps high mortgage payment they can’t make).

I think this program is a pure waste of tax-dollars money. I’m not going to go through the steps of showing that this money was never their money in the first place, but I’ll let the following post do so: http://www.twentysomethingsens.....ution.html

Shocking isn’t it? Are we really headed towards more re-distribution of wealth!?

Now I don’t notice any difference, but I’m saving more.