what to do with tax return?
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| Tue, 01-31-2006 - 11:35am |
HI everyone. I attempted to file my taxes last night, however the tax program that we have was unable to complete my file because it needs some kind of form to claim my tuition expenses. I have to wait for an update to become available to that program that has the form or else find another website to do it on. Right now it looks like I will be getting back 1313 dollars. The 1000 is from my lifetime learning credit since I just finished college this past year I can claim my 13000 in tuition so I get a bunch back. I'm frustrated though because my mother and step father (whom I live with) seem to think I owe it to them to give them some of this money. They did not pay my tuition or help me in any way to pay my school bills this past year, so I feel I am entitled to that extra thousand dollars that I get due to my tuition expenses. I am 50K in debt just in my student loans so I want that money! However she is giving me a guilt trip saying they need the money. I'm so angry...I need it too! Anyway though, assuming that I do get my return completely and don't get duped into handing it over to mom (she wouldn't pay me back, I'm sure), I am not sure where to apply it. I have a loan with a friend that I owe 1200 dollars to and I am thinking of paying that off, however then I'm left with nothing but that would be a great chunk of debt off my mind and would reduce any chance of bad blood between myself and my friend if it took me too long to pay back the loan. (I've been paying 100 a month on a 1400 dollar balance and now owe 1200) My friend was nice enough to loan me that money to help me meet my tuition payment last semester so I feel that the tax return money I get for going to college should be given to her to pay off what I owe her. I also have 5 paymments left on my car loan, the balance is 1065 right now and I have 5 payments left of 220 dollars each. Perhaps I should pay off the car? I don't know. I want to pay off debt but that the same time I want to put money into my 2 savings accounts (1 for ef, one for wedding/car repairs/anything and everything else...I plan to break into more accounts as my savings grows but not right now!) My ef only has about 220 dollars in it, 100 of which I can't touch because my bank has a minimum balance requirement of 100 dollars. I want to get it up to 1000 dollars at least for an EF. My "everything else fund" is through ING and I have just over 400 dollars in there, but I am anxious to put more money in because of their high interest promotion through april (4.75% interst on new deposits through april)
Any ideas would be appreciated. Dbf has also sold 2 houses which will be bringing in about 11K in another month or so. He intends to pay off his credit card debt and settle up with his taxes (he never paid from last year) and then hopefully if he has anything left he has told me we may just pay off the balance on my car loan. We would have to see though where that money would be best applied when the time comes. Any help would be appreciated!

I am a little confused about your mom...is she asking for a loan or is she expecting to be paid for some sort of room/board reimbursement? If it's a loan, I personally would say no. I would be much more interested in paying off the friend for exactly the reason you mentioned. If it's for room/board, I would try to suck it up and have a conversation about if they need to be paid, we can do that in the future but she can't go back and ask for reimbursement if that wasn't what you had agreed upon. I realize that sometimes people say something is ok when it really isn't and then it turns up at moments like this. Of course, this opens the can of worms about paying in the future but at least stuff won't be simmering in the background. Regardless, I would take the tax credit and repay the friend who generously allowed you the opportunity to keep going in school and do everything in your power to keep that relationship intact.
HTH!
Peg
Thanks Peg! Basically although I pay my mom 2/5ths of the bills each month to help out (usually ends up to be around 200 dollars) she still thinks that I should just give her money from my tax return to help them out because my mom and my step father both have low paying jobs and my bf lives with us. The 2/5ths arrangement is because there are 5 ppl in my house, and my bf and I then would pay 2/5ths of the major bills. Usually dbf can't pay his part because he is in deep hock, so right now I'm paying it. Anyway, we have paid our part each month but since they are struggling they are looking to me for help. Sometimes I feel that my mom sees me as just someone she can illicit money from. I understand that they are in a bad spot right now but so am I, and honestly I only made 15K last year but I paid for most of my own items like my own food most of the time, etc. I buy my own clothes, etc, so they really just paid rent for a home they would live in anyway, and for food occasionally. So do I really owe her anything? No. Does she think she deserves the money I get back though just for being my mother? Yes. Very unfair. I am trying to resist giving it to her because I want to apply the money to debt, but it's hard when your mother is saying how desperately she needs money...but this would not be a loan, as far as I understand. She thinks I should "gift" her that money. I don't think parents should use their struggling college students as a financial crutch. I've seen this happen to friends of mine as well, and it's just awful. Agh! I love my mom but she drives me nuts sometimes. If they are struggling that badly, go get a second job. That's what I had to do, they can do it too. My dbf's parents used to do this to him too, which is the main reason he moved out of their home and in with us. My parents don't do it as badly as his did. I remember one time was desperate to get books for college and had no money to do so. He asked his parents for help and the reply was "we can't, we have to fix a crack in the bathtub." 4 years later, the crack is still there. Nice. And his mom calls every other day to ask him for money. Again..get another job. We both work 2 jobs, why should we have to support our parents who haven't figured out yet how to take care of themselves? I have no problem helping once in a while, but it's not even like they are asking, it's just...expected. ugh.
Sorry to seem so selfish. This has just been going on for years. I never got the hope credit money that I could claim during my first 2 years of college...my mom took it. I didn't even know I could get it back. This is the first year I am standing up for myself for the money I am entitled to.
On a better note, thanks for the suggestions on what to do with the return!
Edited 1/31/2006 12:36 pm ET by aerandel
Wow - tough call.
All my best,
Danni
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You don't seem selfish to me. Seems like you are trying to turn around a long-standing pattern of poor money management techniques and doing it well.
This comes from a people-pleaser of extraordinary ability but...I encourage you to seek ways that you can positively disengage from this conversation with your mom. If you are paying a share of the expenses and it is what was agreed upon, I would find a phrase that says 'I don't want to talk about this anymore' in a way that doesn't push buttons and feels comfortable to you and use it everytime it comes up. This falls in the category of setting boundaries and we all have to do it. The thing I've learned in the last year is the boundaries aren't about other people's behavior, it's about ours. Figure out what you can and cannot do and stick to your guns. It will be a skill that will serve you well in many, many ways in life. Not an easy skill if you are anything like I am, but a skill I am trying to develop everyday. Also, not something that always goes over real well with the people we've been pleasing all our lives but they adjust eventually.
Peg
First, I absolutely think you should pay your friend her money back first. She generously loaned you the money. I would not want you to lose a good friendship over something like that.
I'm probably in the minority but I think that the request from your parents is not totally unreasonable. The reason I say this is because you have finished college. You are staying in their home. They are allowing your boyfriend to stay in their home. I have a feeling that the money you are giving them for your share is a lot less than you would have to pay if you were on your own. Then you mentioned that you pay for your own food most of the time. Well, I think you should pay for it all the time. I agree with the other poster that said that since you have finished college that it might be time for you to venture out on your own. Then you won't have to worry about your parents thinking you owe them money or anything like it. Just consider it.
However, between the two I definately think you should pay the friend back first. I mean they are no relation to you but cared about you enough to loan you the money. I think you owe your parents too but they are family so perhaps you can make that up to them at a later date.
Anyway, there you have my two cents! ;-)I truly hope everything works out for you!
I agree with Happy that the friend should be first on your list. She's not family, she's just nice. So pay her back first.
Then I think it would be a great time to think about how to get out on your own. I have had relatives live with us -- they paid, BUT they were always THERE -- we had no privacy etc. Also, there are a lot of little expenses that nobody seems to notice - hot water, laundry soap, toilet paper - when to use the T.V. Your best bet is to find a way to escape. Good luck. Hopefully your BF will do well in his business.
Megan
I totally agree, you are starting out, your mom has been working at this life thing much longer than you. You need to pay your obligations first before you take care of your mom. Pay your friend back, pay your car off or pay on your student loans, whatever makes you feel good, but don't take care of your mother if she is physically able to support herself by getting another job if that is what it takes. You'll have enough time to feel guilty when your mom can't take care of herself due to age/medical condition and you are too busy working to take care of her so you have to place her in a home...or shoot her and put her out of her misery! (Just kidding.) It sounds rotten that she thinks she's entitled to your tax return money. You earned that money and paid for your education and it should be yours to take care of you with. Suze Orman says people first, money second, things last (or something to that effect) if you pay back the loan friend gave you then you choose people first, your mom expecting you to give her your tax return is thinking of money first rather than what is best for you.
Thankfully, my mom was able to help us out when we got in trouble financially, but I
didn't let her just pay my bills and forget about it almost 50% of my base salary goes to repaying her every month. The almost another 50% goes to paying rent every month. So fiance's income pays for food, gas utilities etc. I had to work 60+ hours a week for the last 15 months to finally get ahead a bit. Fortunately, I have an hourly position and my company pays and encourage overtime during this period due to the tremendous work load we've grown faster than we can keep up and also lost some intregal staff at the same time so I could work as much as I wanted to take up the slack while new staff was training and getting up to speed.
Anyhow, best of luck to you.
Pam
Proud sister of a Marine: