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It looks like there is NO hope of the VI Govt being able to issue refund checks for 2011 filers - since they still owe $30 mil for 2010 refunds and have yet to borrow the $120 million, of which only $15 million is earmarked for 2010 refunds. So that will leave $15 million unpaid and NO MONEY for 2011 refunds.
I'm sure a lot of people know about this strategy, but I thought I'd share it with you. IF you are owed a refund for 2011, you can pay yourself back throughout the year. What you do: on your 2011 return, apply your refund to 2012. Then adjust your W2 withholding by increasing your allowances, so that less tax is withheld. The trick will be in monitoring your Fed (VI) withholding. You might need to adjust your W2 again towards the end of the year, if it looks like you are short and will end up owing too much. The goal is to break even, or owe a little, so that you won't have to worry about whether you'll get a refund in 2012.
Of course it's best to consult with an accountant to pinpoint your target amount of Fed (VI) withholding. Also, this strategy is easiest to pull off when your 2012 tax situation will be pretty similar to what it was in 2011.
Posted : March 24, 2012 3:25 am
Getting a refund after you move from the territory is no picnic.
Posted : March 24, 2012 6:26 am
This is a great strategy and thanks for posting.
Lets stop funding these idiots who are running the territory into the ground.
Posted : March 24, 2012 12:02 pm
That's a good strategy. Two years ago, I applied an overpayment to the next year, and they incorrectly refunded it to me. Oh well, it's not the worst thing that could have happened.
Posted : March 24, 2012 1:45 pm
Ooh, I wish I'd known about this last year!! Has anyone gotten a 2010 refund lately? Still waiting for mine.
Posted : March 24, 2012 3:06 pm
Lets stop funding these idiots who are running the territory into the ground.
The strategy does not stop the funding - you will still owe exactly the same tax bill - you are just not paying it ahead of time during the tax year through over witholding on your paycheck.
Posted : March 24, 2012 3:47 pm
Ooh, I wish I'd known about this last year!! Has anyone gotten a 2010 refund lately? Still waiting for mine.
Yes, I got my 2010 refund, and I got my 2010 overpayment that I asked to be credited towards 2011 (I really overpaid in 2010). They really didn't want my money! I filed on Mar 1, 2011 and got the refund on Aug 17, with 6.1% simple interest for the time past Jun 1.
Posted : March 24, 2012 5:24 pm
Topic starter
Thankfully, I got my 2010 refund in September. But it doesn't look like the VI govt will have any $$ anytime soon for any more refunds (see my explanation in the first posting in this thread), so this is my first year employing this strategy.
ExitZero is right - I'm paying myself more through the year instead of giving more $ to the VI govt. But my tax liability is still the same, so the trick is to know approx how much I need to have withheld in combination with the 2011 refund that I applied as a credit to this year. A quick consultation with your accountant will give you this number.
The goal is to break even or possibly owe the Vi govt a little when I file my 2012 return. My goal is NOT to be owed a refund - so I don't have to stress and get MAD when the VI govt doesn't have any money to give me my refund. 😀
Posted : March 24, 2012 9:18 pm
Some overpayment is OK, as long as you can apply it to the following year (i.e., you're not leaving island).
Posted : March 24, 2012 9:28 pm
Hey, J! I'm still waiting for my refunds from '07, '08, '09, '10 and '11....I'm not holding my breath...
Posted : March 26, 2012 5:58 pm
