On Sun, 18 Apr 2021 21:58:57 -0500, Jim Joyce
wrote:

On Sun, 18 Apr 2021 21:22:58 -0400, wrote:

On Sun, 18 Apr 2021 11:30:26 -0400, Ralph Mowery
wrote:

In article ,
says...

OK let's see how much it is costing me. Say I got $5000 back and it
was put in there evenly over a year. I put this in my financial
calculator using $416.67 a month for 12 months at .25%. (what my bank
pays) I lost a whopping $5.77.
That is pretty cheap insurance against having a windfall towards the
end of the year that blew out my withholding and got me stuck in
paying quarterlies or worse, some kind of penalty.
Said another way that is a Mocha Venti Frappachino starbucks.
I can afford it. I have plenty of cash on hand.



YOu are ok with that small amout.

Now try throwing the same numbers in that calculator and an interist
rate of 15 % over a period of 10 to 20 years and see how much it is
costing you in the long run.


You are only talking about year to year (no compounding) and this is
money that would either be in the bank or at IRS.

If those are your only two options, then you've placed a constraint on
yourself that the rest of us don't have. Think about your choices.

You said you keep your ready cash in a money market. Tell me which one
pays that 10% you alluded to and I will put my money there.
I have plenty of investments that pay me well.
We are talking about a couple grand. I am not going to obsess about
the fraction of a percent I am losing.

Until banks start
paying a lot more than they are now, I will leave it with the
government.

You are allowed a certain ammout of under payment on the federal taxes.
I think it may eveh have something to do with the tax the year before,
but not sure.


I know about that but you are still playing chicken.

What is this chicken of which you speak? I'm familiar with the game of
chicken but I don't see why you've introduced it into this discussion.
There is no chicken going on.

If you have no clue what you will have to be paying taxes on and some
of it will not be subject to withholding, like selling stocks or maybe
other assets, you are gambling it won't be too much to trigger that
underpayment penalty and just mailing the IRS a check in December or
early next year isn't going to get it. I like a little buffer in the
kitty. I am at the point where a little change on my line 9 makes a
big difference on the rest of that return (SS calculations, taxing of
dividends etc). My wife can also tip that scale by deciding to cash in
some of her 401k to buy a car for the grand kids.

If I sell a stock
around the end of the year, I have some cushion down at the tax man.
Most brokers don't want to screw with withholding and if you just send
in one estimated payment in December, they might ding you for it. I
have done it and got away with it but it just depends on why they
might be looking at your return.

None of that makes the least bit of sense. All transactions are recorded
and taxes are paid, one way or another. Your broker issues 1099's that you
use to calculate your tax obligation. If you have a broker that you can't
trust, why are you still using that broker?

I get 1099s but that is after the fact, usually showing up in late
January and I have had several brokers. None withhold for the IRS.

I will handle venomous snakes, wrestle with alligators and pick fights
in bars but I am not screwing with the IRS.

More nonsense.

Go ahead and **** with them.