Sneaky, smart or illegal..TAX REFUND SHELTER

[broderp]

Ohio only allows $400 excepmtion fro TAX RETURNS

My girlfriend usually gets 4-5K (yes, THOUSAND) back a year.

How can we best plan and shield our earned money from being taken?

It looks like I have 3 choices:

1. Hope they do not ask or claim it. (she is filing early and within the months that the courts may not take it. (as opposed to filing AT TAX time!)
2. File her return without any deductions then next year, find our mistakes and AMMEND her return.
3. I take ALL her deductions and file them for myself. I may not get as much back, but we will keep most of it.

What is OHIO'S "WILDCARD" excemption amount? Can she add this to protect her return?

[DeadBroke]

Wildcard is $400, and yes I think she can use this towards her return

[StaciMM]

What about changing withholding to have less taken out for the rest of the year?

[broderp]

Wildcard is $400, and yes I think she can use this towards her return

Good, so shes covered up to $800. Even with no deductions she manages back over $1200 a year (I always do her taxes) We may take a $400 hit then, unless they MAKE us file so she gets back all she normally would.

We rely on these refunds to get us thru the year.

[StaciMM]

Keep in mind anything after her file date is safe. So, if she files in Sept, 25% of her refund is clear (Oct-Dec). That's why I suggested lowering the withholding, etc. If they do go after it, it will be 75% of the total so lowering her total refund is a good move.

The only other thing I could think of is if you get married before the year is over, you would file taxes jointly so perhaps they would be able to claim even less. (Not sure about that though, and that isn't a good reason to get married so I'm not really suggesting it.)

Seriously though, regarding #3 above... If you & she live together, and part of the reason for her refund is her kids (I'm assuming) you could probably legally claim them as long as you provide 51% support for them. So, if you split household expenses, etc. you probably do...

[broderp]

What about changing withholding to have less taken out for the rest of the year?

That would be great for most NORMAL people. But she (like myself) usually acquire bills over the year that we can't cover with normal expenses. So this lump sum does two things, pays those, and gives us "wild" money.

I also get back the same amount (I also claim 2-3 kids and the morgage interest) and since I work hard all year long, I deserve SOMETHING for all my work. One year I bought a Camcorder, the next a 53" HD TV, etc.... the last few years, we have had to buy things for the home. My refund this year will go pay off the houses new windows and our new AC/heater.

If we got the money during the year as part of our paycheck, we would spend it on daily expenses and it would not be there when we want it or need it, nor could be saved, as something with 4 kids ALWAYS comes up.

[broderp]

Keep in mind anything after her file date is safe. So, if she files in Sept, 25% of her refund is clear (Oct-Dec). That's why I suggested lowering the withholding, etc. If they do go after it, it will be 75% of the total so lowering her total refund is a good move.

The only other thing I could think of is if you get married before the year is over, you would file taxes jointly so perhaps they would be able to claim even less. (Not sure about that though, and that isn't a good reason to get married so I'm not really suggesting it.)

Seriously though, regarding #3 above... If you & she live together, and part of the reason for her refund is her kids (I'm assuming) you could probably legally claim them as long as you provide 51% support for them. So, if you split household expenses, etc. you probably do...

I assume you mean that oct-dec is 3 months or 1/4 of a year, or 25%, so this they can not touch., the other 75% she earned from jan to sept is up for grabs?

So if she gets a $2000 refund, $500 is clear, $1500 is "UP FOR GRABS", BUT combining her wild card excepmtion and her TAX REFUND EXCEPMTION ($400+$400=$800) she can keep $800 of the $1500, so all the IRS can get is $700. Right?

If she changes her withholding NOW and get the cash NOW, it will lower her refund, she still keeps the same exception amounts, including the 25% thats clear, so the court takes even LESS. Is this what your saying? You are a genious!!!

[broderp]

Keep in mind anything after her file date is safe. So, if she files in Sept, 25% of her refund is clear (Oct-Dec). That's why I suggested lowering the withholding, etc. If they do go after it, it will be 75% of the total so lowering her total refund is a good move.

The only other thing I could think of is if you get married before the year is over, you would file taxes jointly so perhaps they would be able to claim even less. (Not sure about that though, and that isn't a good reason to get married so I'm not really suggesting it.)

Seriously though, regarding #3 above... If you & she live together, and part of the reason for her refund is her kids (I'm assuming) you could probably legally claim them as long as you provide 51% support for them. So, if you split household expenses, etc. you probably do...

I assume you mean that oct-dec is 3 months or 1/4 of a year, or 25%, so this they can not touch., the other 75% she earned from jan to sept is up for grabs?

So if she gets a $2000 refund, $500 is clear, $1500 is "UP FOR GRABS", BUT combining her wild card excepmtion and her TAX REFUND EXCEPMTION ($400+$400=$800) she can keep $800 of the $1500, so all the IRS can get is $700. Right?

If she changes her withholding NOW and get the cash NOW, it will lower her refund, she still keeps the same exception amounts, including the 25% thats clear, so the court takes even LESS. Is this what your saying? You are a genious!!!

[StaciMM]

Exactly. I'm a #'s person. I want to be an accountant when I grow up-except I've stopped growing up & started growing out... Guess you're not even going to comment on getting married, huh?

And getting more now is better than getting less later. (Though I understand the idea of not being able to spend it if you don't get it w/ pay.) She may even be able to claim exempt for a month or 2-I think you can legally do that for a short term each year, and if she got back all she paid in last year & expects to do so again next year, could probably do it legitmately for the last 3 months of the year.

Some states are better than others... We basically have $20,000 in misc. exemptions to claim ($5,000 real property + $5,000 personal property, X2 for filing joint.) Even with counting a possible $2000 refund, we're under $8k total exemptions. I doubt we'll get that much, but its better to be safe...

I assume you mean that oct-dec is 3 months or 1/4 of a year, or 25%, so this they can not touch., the other 75% she earned from jan to sept is up for grabs?

So if she gets a $2000 refund, $500 is clear, $1500 is "UP FOR GRABS", BUT combining her wild card excepmtion and her TAX REFUND EXCEPMTION ($400+$400=$800) she can keep $800 of the $1500, so all the IRS can get is $700. Right?

If she changes her withholding NOW and get the cash NOW, it will lower her refund, she still keeps the same exception amounts, including the 25% thats clear, so the court takes even LESS. Is this what your saying? You are a genious!!!