TurboTax is marketing to the kind of people who think getting big refunds is a good thing. That's generally people with lower incomes, so this fits that target.
It is generally a good thing for folks who live paycheck to paycheck. Higher withholding forces more budgeting, and then they get a big paycheck once a year to pay off whatever
People who live paycheck to paycheck are very good at budgeting because they have to do it to survive, they don't need any more pressure. If anything it's richer people that could use a little prodding, but either way we don't need the government to be withholding extra money from people it thinks might have bad habits.
> they get a big paycheck once a year to pay off whatever
If you have something big to pay off, you usually need to do it right away. You probably can't afford to wait however many months until you get your refund.
> Whatever is left over after expenses is fun to be had as soon as possible.
When income is 80% of the minimal bills, which dollars are the fun ones?
> But anyone who has actually dealt with poor people who live paycheck to paycheck knows they are not good at budgeting and planning.
You may not know that assertion is uneducated nonsense. The nonsensical part is the inference that better budgeting is all that stands between 80% of minimal bills and 105%.
Past that, an extended time in hunger-level poverty tends to lead to some hyper-focused money management. As in being intimately aware of each penny that hopefully will add up to this weeks bag of white rice.
Some of the "better at planning" poor people have built up crude math to make it all makes sense, but seems overly complicated for someone like me. The one I noticed: "oh, I got $85 for selling that pot I made, I'll use that for the fridge repair." - Which is totally different to "oh I got $85, I'll just put it in the pool of my bank balance because I already budgeted for that fridge repair which costs $60". I tried asking this person, but you also needed an extra $10 for that McDonald's lunch you wanted to buy but they insisted "nope, that's my fridge-repair money, can't spend that"
Not sure I'm explaining that properly, but it was the sort of math I encountered dealing with such individuals.
One I've encountered is putting any surplus money into tattoos because they can't be stolen, repossessed or otherwise lost, thus making them a savvy place to put money.
They were completely earnest. The joke followed that they can't take money with them when they die, but they can take tattoos. Pharaohs still have their tattoos, they point out.
There is also a general pattern of spending "extra" money on things like parties, experiences, consumables, etc. Better to spend the money on a pizza party and gocart trip for their kids than to stash it away in a savings account. Better to spend the money on beer for a party than even to hide it under their mattress.
As far as I can be bothered to care, schemes involving having other people store your money such as tax withholdings and insurance policies exist primarily to save people from themselves and their lack of budgeting capabilities.
Most people can't budget, poor people especially so (it's among the biggest and most likely reasons why they are poor). They see money, they spend it all immediately. Saving? Investing? "roflmao" or "I can't.", they will say. The only way to address this so certain, specific, important payments are made absolutely is to literally take and keep the money out of the person's hands until the payment is made.
In addition, I wouldn't be surprised to find that many of the people who are in the target demographic for this feature don't itemize - and never have a need for such practices.
A 1040 + W2 might the only equation these people need to solve for.
It’s almost certainly a bad thing to get a big refund because small budgetary changes can result in being unable to make ends meet which is extremely expensive in terms of fines
If they were budgeting, they wouldn't be living paycheck to paycheck. It makes the budgeting more challenging to give the government and interest free loan.
However, giving the government an automatic loan means that a land lord cannot charge that much more in rent, and the owner does get to spend it eventually, rather than throwing it into a rent pit
That left me with $325/month to pay for gas (luckily I loved only ~3 miles from work, so that didn't cost me much), food, and entertainment. $10/day for food wasn't terrible, but it's not exactly steak and seafood, either. And remember, that $10/day is supposed to include entertainment as well. Honestly, it wasn't really THAT bad. Buuuuut....
Minimum wage increases have happened, but rent has gone up too. That job would now pay $15/hr, ($2280 for 38 hours pretax, ~$1710 post-tax), but the rent on that exact same unit is now $1,200/month.
Assuming all other bills remained the same (they wouldn't), I'd now be left with only $285/month for food. And with over 15 years of inflation, that $285 is worth significantly less.
At that point, even with budgeting, I'd still be living paycheck-to-paycheck. When wages don't keep up with the cost of living, you can't budget your way out of it.
To make it worse, that kind of living starts to take its toll on mental health. You feel like you're constantly drowning. That $4 coffee or the meal at Taco Bell will be your only source of real joy between each paycheck.
If they were budgeting, they wouldn't be living paycheck to paycheck.
This is false. You simply aren't going to be able to budget your way into riches if you don't have enough money to go around. If you don't believe me, limit yourself to a minimum wage budget with no startup savings (and no borrowing off of others) and tell me how you are doing in a year... and then tell me how you'd survive the next few years on this. If minimum wage is too little, try setting the income at just over the mark you'd have for assistance.
Alternatively, if you have enough money to cover reasonable expenses, some fun, and have a little leftover, you don't really have to budget if you don't tend to spend lots. If I have enough money, I don't really have to budget.
Other replies are going hard on the initial assertion but missing the point, on which you're totally right. There is no reason where it's theoretically advantageous to give the government an interest free loan (overpay on your taxes) and get it back later in refund form, than to simply not do that and have the money in the meantime. Take the money you were giving to the government and put it in a savings account instead, and now you at least have minimal interest. (Hell, take it and put it in a safe and at least the government doesn't get to spend it on $thing-you-disagree-with-ideologically.) There's no difference in what you can do with untouchable money in the government's pocket vs. untouchable money in yours.
Whether you have the willpower to not touch it instead of increasing your food budget from $10 to $11 or whatever is a different story, and speaks to the mentality: if you never got the money in the first place, you can't be tempted to spend it.
I think there's some segment of folks that get snatched up into the weird false pretense that a modern day turbotax filing is less than (at worst, once one factors personal time cost in) a decent tax person even at one of the, shall we say, 'established turn and burns'[0]
That said, TurboTax did hit a specific level of 'eww' when I started seeing the refund option of a debit card (of course for some stupid fee that, if nothing else, provides some transparency to their kickback from the issuer).
I'm going to be doing what might be my last filing with them this year; it's easier for the purposes of history/other events but after that, it's gonna be my Fiancee's CPA.
Originally, I got 'started' when it was a desktop app only, and the user limit was very graceful, my parents and all of my siblings could benefit from that one yearly purchase...
Come to think of it, we should probably capture that date in the historical timeline of Enshittification.
And, yaknow, I'll ask my dad this weekend how he's doing his taxes this year. I'm honestly curious if he's finally fed up with their antics too... (It's a high bar; in the past he learned the basics of virtual machines to use some of his old-school software/tools, it's a beautiful level of curmudgeonry. OTOH my siblings have good CPAs.)
[0] - Not to be confused with some of the weird 'chop shop' Tax places I have seen around me in the past, sort of 'pop-ups' with a statue of liberty wearing person or 'wacky inflatable arm-flailing tube-man' to help drive business in.
Not shady, neither is it free, but about as close as you can get AFAIK for online filing. For what it is (a web forms app, with careful explainers), it's pretty good!
I've used tax pros and honestly, my finances are not complex enough to get a good benefit off the extra cost. I used H&R block one year, and really didn't think they knew any more about tax filing than I did. They got confused at all the same line items I did.
> I used H&R block one year, and really didn't think they knew any more about tax filing than I did. They got confused at all the same line items I did.
I mean... H&R Block is in some ways the Firestone of accounting. Sometimes there's a diamond in the rough of their 'regular' workers [0] but you never know what you're gonna get unless you happen to wind up in the right circumstances where you can build trust with one of their people that happens to stick [1]
[0] - Had a friend who could get one of H&R Block's folks to do the whole deed for 'non complicated'[2] starting with a pile of receipts/medical bills/etc and 90$ for people they liked, and yes they'd do their proper professional duty in the process. Frankly given the time investment that's a steal.
[1] - In my case, it was a guy at a local shop who had his WRX parked outside every time that was some level of manager. Always happy to give proper treatment, never afraid to say 'take it to the dealer' (i.e. more qualified people) if it was out of their comfort zone. Compare and contrast to a different shop, where after some 'changes' managed to mess up an oil change, and the 'fix' for the bad oil change... [3]
[2] - I want to be clear that non-complicated is not the trivial 'oh sure okay' here, they may or may not have had a hand in pointing out said friend's parent was doing some... 'minor some student loan fraud'. But if you had additional properties or other weird situations... If I remember they had their own sort of menu and everything. Very smartly done.
[3] - I had to re-replace a <6 month old timing belt in the process, but frankly the engine needs a rebuild now, it lost 2-5MPG from that one incident.
Pretty decent. When I was laid off last year from a company that supposedly has a reputation for taking care of their employees, I got 1 week per year of service, which was 8 weeks.
Shopify is my guess; I was part of that layoff and the timing lines up. They had those exact terms and paid them out in addition to WARN act minimums contingent on signing of a severance agreement. I had the same offer but declined due to issues I had with the severance agreement.
> I had the same offer but declined due to issues I had with the severance agreement.
Is it too prying to ask what that means in terms of your outcome? Idk what the WARN act is, and I understand that my question may be neive or too personal to post an answer to publicly, but I'm curious what the alternative to signing is/was and if the answer is generally applicable or specific to the company/agreement.
Not at all—I would not have mentioned this if I was unwilling to talk about it.
The WARN Act[1] is a bit of federal legislation that applies during mass layoffs. There are some variations from state to state, but it generally ensures anyone caught in a mass layoff (50 to 100+ people) is required to receive either 2-months advance notice or 2-months salary+medical benefits.
When Shopify performed their layoffs, there were subject to WARN payouts as they did not furnish 2-months notice.
The severance agreement they gave me and others paid out an additional 8 weeks + 1 week per year of seniority, contingent on signing.
I declined to sign, which was painful, but my main concerns were over two clauses:
* a non-mutual NDA Shopify was unwilling to change to a mutual NDA.
* a provision to appear in court on Shopify’s behalf, uncompensated, for an indeterminate about of time, whenever requested.
There was a lot of other oddness about that whole layoff I’ll leave out here for the sake of brevity, but the whole process was quite the shitshow.
Curious, what would be a severance package HN would be satisfied with? I suspect the average US employee would be stunned to hear an offer of 6 months.
So much negativity around these statistical outliers. The majority of companies in the US don't offer severance and it's very rare in some industries. Not saying that it's fair, but name and shame? Maybe we're living in different worlds.
Given the gauntlet that is modern tech interviews, 3 months. 1 month severance isn't an issue in a market where you can grab a new gig in 2-3 weeks. But all these places want 5 rounds of interviews.
Is so standard in the USA, it's not the standard in any other place on Earth I worked at (Brazil, USA, Sweden). Even in Brazil you'd get at least a few months of severance.
"half a week’s pay for each full year you were under 22
one week’s pay for each full year you were 22 or older, but under 41
one and half week’s pay for each full year you were 41 or older
Length of service is capped at 20 years."
And also it's pretty shit because it's capped, so for most software devs it won't be anywhere near what their actual salary was:
"If you were made redundant on or after 6 April 2023, your weekly pay is capped at £643 and the maximum statutory redundancy pay you can get is £19,290. "
This is the money the government will pay you rather than severance from an employer.
Redundancy also comes with a required notice period that the employer must pay you through as well. And there’s a bunch of other rules around how people can be selected for redundancy.
I got laid off when Realtime Worlds went into administration and only got the statutory pay until years later the company was wound up and I got a follow on measly cheque from them for part the money they still owed me for the notice period.
"Your redundancy pay is called a statutory redundancy payment. It is calculated based on your age, weekly pay and number of years you’ve worked for your employer. You are also entitled to a paid minimum statutory Notice Period. It’s your employer’s duty to pay these, but your payments are capped"
If the employer can't pay (as in my case) this is also the money the government will pay in their lieu. Which is why it's so shit/capped. Normal payments from employers are generally more in my experience.
The UK has an awful standard living for how wealthy it is.
For example, if you happen to be classed as a "worker", rather than an employee, you do not have a legal right to leave work or take time off to care for a sick family member or pick a child up from school.
Yep. And there are many many many other examples like this - for instance UK employee protections are quite good.....unless it's your first 2 years of employment. In which case you get almost nothing - within the first 2 years you can be let go without any reason, and it's not redundancy either so it doesn't trigger all kinds of protections - it's just "it's not working out, bye" - same as US, or worse actually in some ways.
