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[McTraveller]

To try and clarify: withholdings aren't a loan, but having withholdings that are too much is giving a loan.

And when the average refund for those with AGI between $0 and $25k is over $2000, that's not "small amounts of money" - that's close to $200 a month you could be taking home instead of getting at the end of the year.

[Lord Shonus]

$50 a check (on the high end, for me it is closer to $10) is not a critically important amount of money - it will get spent without noticing most of the time. A couple of thousand to Uncle Sam would wipe out much of my savings and possibly cause me to lose my car.

[MrRoboto75]

My tax return was notably lower as the fed student loans haven't been charging interest in over a year.

[Rolan7]

Life hack- if you list 0 deductions on the W4 you get a big check from the government! Take that, Uncle Sam!

- Paraphrased from someone I used to know

[TamerVirus]

Ugh taxes.
I go on Bay12 to get away from taxes

[None]

I still don't even know what deduction on taxes are. Like, yup, deductions affect taxes, but like, are they commensurate to heads in household? Do I do more deductions if I'm more desperate? Could you quantify 'one' deduction, please? Do the deductions deduct more from my paycheck, or are they deducted from the amount in my paycheck going to the Fed?

Oof. Well, don't answer that, we go to bay12 to commit tax evasion, after all.

[Madman198237]

Deductions are "things that at some point it was decided would count in your favor on taxes, so we remove $(some amount) of money from your taxable income to account for it". i.e., I make four trillion dollars in a year, but I have a pet dog, so I only pay taxes equivalent to what a sad, dog-less person would pay for making 3 trillion dollars in a year.

They're nothing more than the means by which your taxes are decreased for things we wish to decrease taxes for (having children, paying student loans, suffering medical problems, etc.).

[Dostoevsky]

Yeah, the idea is that it incentivizes certain types of activities without directly spending government funds or setting up a program to do so. There's also a standard deduction, however, and it's large enough that the vast majority of taxpayers just take that instead. So deductions are more relevant to either those who happen to do a lot of deductible things, or are just really rich and gaming the system by doing deductible activities that benefit them anyways (e.g. donating to a charity whose purpose is to do artistic performances in your neighborhood).

[Iduno]

Also, lobbyists can do a lot to affect that, like the tax write-off for buying a vehicle over 6,800 pounds, as written by Hummer.

[Dostoevsky]

Right, congress sets the terms (although they sometimes defer details to the IRS), so like all policy it's vulnerable to lobbying. And the tax code is so... robust... that there are a lot of silly things in there.

[Starver]

Also, lobbyists can do a lot to affect that, like the tax write-off for buying a vehicle over 6,800 pounds, as written by Hummer.

Aw, shucks..

£6,500
Vauxhall Cavalier 1.8 L 4dr
4 door Manual Petrol Saloon
1991 (J reg) | 16,576 miles
Private Seller

 

[McTraveller]

Wow I know this is off-topic but: How in the world do you have a 1991 model year car with only 16k miles driven!?

[Grim Portent]

Wow I know this is off-topic but: How in the world do you have a 1991 model year car with only 16k miles driven!?

Generally it would be because it belonged to someone who didn't use it for a long time, but never sold it for some reason. A couple of years back my father bought a car from an elderly woman who had become unable to drive for health reasons not long after buying the car new, so it had just sat in her garage for years doing nothing.

To be precise, it was a French Renault Clio from the 90s, though that could be anywhere between 1990 and 1998. I think it had less than 10k miles on it when my father bought it.

[McTraveller]

I mean that's what I figured but... It's just... the lack of financial education in such a situation.... why would you buy a car like that, not use it, and not sell it? That's an expensive paperweight!

[Grim Portent]

Unless you're in a position where you need money something like that can legitimately be forgotten about, in a 'oh, I'll deal with it later,' kind of way. Especially for an older person who may also be dealing with some psychological* or medical matters that make things like selling a car take a backseat in the mind.

In the case I personally experienced it was a combination of being reluctant to sell it, a refusal to let go of the concept of autonomy in a sense, and never actually needing to sell it. Even at the point she did sell it it was mostly because her daughter convinced her to sell it and do something more useful with the money.


*Big issue is the loss of personal autonomy, seen it in several old people, my own gran included. When you get old and have a bad leg, a bad back and live in a town with hills you basically become reliant on family and friends who can drive to get around. A car, even one you can't use, provides a comforting illusion of autonomy for people who otherwise have very little practical freedom left.