4 ms·

> I've also been rewarded with unexpected large dollar figure checks in the mail. But did they also send any interest? Notice if you owe them, you also owe int

by rdtsc 7y ago

> I've also been rewarded with unexpected large dollar figure checks in the mail. But did they also send any interest? Notice if you owe them, you also owe interest, unless you negotiate. If they owe you, you don't usually get the interest sent do you.

philwelch 7y ago
If you get a tax return at all, you've essentially given the federal government an interest-free loan all year.
- rstupek 7y ago
  And most people think of that money they get back as a bonus! Like it was never their money in the first place but a gift from the government
  - ceejayoz 7y ago
    For people who aren't good at budgeting/saving, it can be a decent way of putting away money for a large purchase or two every year. It's a lot easier to raid a savings/retirement account than to get your IRS refund six months early.
    - philwelch 7y ago
      People aren't terrified of plundering their retirement accounts? There are massive and scary tax penalties if you do....
      - ceejayoz 7y ago
        10% isn't that massive or scary for someone facing something like a big unexpected medical bill or whatnot. "I can take out $2k to fix the flooded basement and it'll cost me $200 in penalties? OK."
        philwelch 7y ago
        But that’s on top of whatever income taxes you didn’t already pay in some cases.
perl4ever 7y ago
Yes, they pay you interest. That's from personal experience, when they returned money that I did in fact owe, because it was outside the statutory limits of how far back they can collect. It was literally a few dollars and a few days, and they paid interest.
Renevith 7y ago
I'm not sure if this is the exact situation you're referring to, but you do get interest sent to you if you later amend a tax return in your favor. Source: I've filed a 1040X twice, both times in my favor (due to my own mistake I noticed on my own later). The IRS issued me a 1099-INT the next year for the interest they paid me. The rate was substantially above market!

by rdtsc 7y ago

philwelch 7y ago

If you get a tax return at all, you've essentially given the federal government an interest-free loan all year.

rstupek 7y ago
And most people think of that money they get back as a bonus! Like it was never their money in the first place but a gift from the government
- ceejayoz 7y ago
  For people who aren't good at budgeting/saving, it can be a decent way of putting away money for a large purchase or two every year. It's a lot easier to raid a savings/retirement account than to get your IRS refund six months early.
  - philwelch 7y ago
    People aren't terrified of plundering their retirement accounts? There are massive and scary tax penalties if you do....
    - ceejayoz 7y ago
      10% isn't that massive or scary for someone facing something like a big unexpected medical bill or whatnot. "I can take out $2k to fix the flooded basement and it'll cost me $200 in penalties? OK."
      - philwelch 7y ago
        But that’s on top of whatever income taxes you didn’t already pay in some cases.

perl4ever 7y ago

Yes, they pay you interest. That's from personal experience, when they returned money that I did in fact owe, because it was outside the statutory limits of how far back they can collect. It was literally a few dollars and a few days, and they paid interest.

Renevith 7y ago

I'm not sure if this is the exact situation you're referring to, but you do get interest sent to you if you later amend a tax return in your favor. Source: I've filed a 1040X twice, both times in my favor (due to my own mistake I noticed on my own later). The IRS issued me a 1099-INT the next year for the interest they paid me. The rate was substantially above market!