I myself have structured my taxes that I get very little, if any tax refund every year. Having been a financial advisor in the past, I know that overwithholding and getting a large refund is nothing more than loaning the government your money and getting 0% return on it. I just never liked doing that on principal.
Having been an advisor, I know most people have little idea how to do this. Most people simply, without their knowing so, withhold the greatest amount from their paychecks every pay period. The form you fill out at a new job, the W-4, sets this up for you. Its questions will in most cases always set you up to withhold more than you need for your federal income taxes. They do this so probably 99% of people look forward to filing a return because "they get money back". Which is really a bad thing but this system makes paying your taxes every year appear to have a positive spin. Fact is, if most people had to pay the entire amount of their taxes once per year, people would understand how much they pay in taxes and a revolt just might materialize and the gov't wouldn't want that would they? Also if more people withheld less, the gov't would be taking in billions less every month in excess money from us. If we are going to get it back later anyway, why let them use it at all when you could make better use of your money on a monthly basis?
Anyway, to adjust your withholding all you have to do is download a W-4 from the IRS website and increase the number of allowances you claim on the form. If after filling out the form and you get 3 allowances, you can just change it to 5 or 6 or even 99, and see how that affects your next paycheck. YOU are the controller of your tax withholding, most just don't know it. The higher number of allowances, the lower the amount of $ that is withheld from your paycheck. Most people fill out the W4 once when hired then never think about it again. Just what the government wants... I put 99 on mine once and the HR dept said they would just withhold the least possible so I went with that. So get your new W4 form, fill it out with the new allowances, then turn it in to your HR department. By law they must make the adjustments to your paycheck immediately and usually before your next paycheck. I know how this works because I always do my own taxes and have a clear understanding of how taxes are calculated. If I withhold very little, I may owe big at filing time. The final numbers are the same, its just whether I pay more per paycheck or more in one lump sum, or I pay or get a refund of very little either way. Its up to you. Like I said, YOU are in control of YOUR withholding on your paycheck.
I would always rather owe money than get a refund. Now if it is true that you cannot be fined unless you get a refund, that is even more incentive not to over withhold and get a refund the gov't can ding with a fine before you get what is left over.
So, If there is nothing to "ding"....
Now the first year the fine or penalty is $95 or 1% of gross income whichever is greater. This will grow every year to 2%, 3%, to who knows what.
Below is Rush's comments on this from today:
Opt-Out Obamacare Penalty Can't Be Enforced -- Unless You Get a Tax Refund
Anyway, he said to me that, according to the law, the only way that the government can collect the fine or penalty for you not buying insurance is if you are owed a tax refund. If you do not owe a tax refund, they cannot go into your bank account or anywhere else and get that money. Now, the sad thing is that most people file their taxes to get a refund 'cause they think they're screwing the government, and they're not. You're giving the government all that money all that year, but, no, look, what it means is that it can't work. The whole point of this is the individual mandate. The guts of this are the mandate that you buy, that young, healthy people get screwed price-wise by being forced to buy insurance. You've got to.
And in three or four years, if things don't change, it's gonna be bad. I'll tell you, by then, if this thing goes forward, and it looks like it may not, but, if it goes forward, these are gonna be the good old days, because right now with the website broken, these kids can't find out how badly they're gonna get screwed, although some people are. By kids I mean 18-24, 18-30. (interruption) I know, we're gonna get to the hearings in a minute. There's nothing wrong, folks. Did you know the site's working? Everything's happening as it should. The only problem is the Republicans. That's what I meant, we're loaded here. I'm sorry to be hop-scotching all over the place. I'm trying to do an hour's worth of content here in five minutes. I really apologize. I'm bursting at the seams here.
Anyway, the website not working and therefore people losing their policies, being dropped, they don't know yet. People really don't know how they're gonna get savaged price-wise on health insurance premiums, and they're not gonna know that for a couple, three years once the fines catch up with the price. The fines are always gonna be the first preference 'cause it's so much cheaper than buying a policy.
Now, by the way, the whole point of this, Obamacare, is to fail and usher in single payer. And, as I say, Obama can't even manage to structure that right. This is glaring here, what is going on. Let me read this to you from the joint tax committee. They talk about the mandate here. "The penalty applies --" this is for not having insurance. "The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code," the tax code, "and accounted for as an additional amount of federal tax owed." So it's tax.
"However," look at me. "However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay [the fine] in a timely manner."
Therefore, the only way that they can collect the penalty or the fine is by taking money from your refund. If you are not owed a refund, they cannot get money from you. They can't issue a lien. They can't garnish your wages. They can't use any of the normal procedures available to them if you owe them money, even though the Supreme Court has said it's a tax. So for those of us -- I mean, folks, I'm in fat city. I'm in fat city because I always structure to where I owe money. Well, not entirely. There have been years. But if you structure your taxes so that you do not get a refund, you do not have to buy insurance and you do not have to pay a fine 'cause they can't collect it from you if you don't have a refund due. And that is just another nail in the coffin of Obamacare imploding on itself.
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