Thursday, March 02, 2006

I Never Thought Uncle Sam Would Rescue Me From a Losing Session

Yesterday was pretty ugly poker-wise. About -$1,400 ugly, nearly all at the 20/40 tables. Giveth and taketh away and all of that crappeth.

Nothing really spectacular occurred, just couldn't get anything going, plus one table was pretty lemurific, except I kept ending up on the wrong end of it, after isolating the lemur that loved to raise with hands like 34s. One of the somewhat decent players at the table also kept hitting on the turn/river, over and over and over, after I'd given him plenty of reason to suspect that his A high, 4 kicker wasn't going to be good enough. Until he spikes an A on the river.

In brighter news, sweet Jebus, ScurvyWife and I are getting back quite a hefty return this year. Thumbs up to overpaying throughout the year, as it worked out to be inadvertent savings. The nice thing is that it was pretty much completely unexpected, as I thought we still might owe some. I suppose that's why I'm not an accountant, yo.

Still keeping an eye on ScurvyRat but the tough little bastard seems to be completely normal and fine.

I really, really need to motivate on a poker-related business idea that's been percolating in my brain. Like, really. Even if it means playing less actual poker for a month or two. I enjoy the poker, obviously, but I'd likely be a wealthier monkey overall if I'd devoted more time to assorted endeavors the last few years instead of


J said...

Thumbs up to overpaying throughout the year, as it worked out to be inadvertent savings.

Rather surprised to see this attitude from someone so good at identifying and exploiting every casino/sportsbook/pokerroom edge.

Thumbs way down on Interest-free loans to the government. Very -EV.

ScurvyDog said...


That's one snap judgment to make, without a lot of knowledge of the particulars of the situation. Not really a constructive one, either, as it sounds like you have some valuable knowledge to share on the subject.

Anything constructive to share? Especially for those with risk-adverse spouses, who'd much prefer to overpay throughout the year, even if means potentially losing out on 4-6% interest that might have safely been earned on the money.

CC said...

heck, from the world of the self-employed where I've had to go without a paycheck for five months and living with a flat market, I'll gladly grab an Uncle Sam re-buy bonus this year...

tk said...

I have something constructive to share: overpaying your taxes is retardedly stupid and if your spouse thinks it's smart she's stupid too.

I think you mean risk-averse, and you are smart enough with $ and EV to realize that overpaying your taxes is lighting money on fire.

I can't believe you jumped on the guy for that.

The Litvak said...

When did the comments section become a tax planning flame-war?

Glad to hear the rat and the tax situation are good. Sorry to hear about the bad variance-- no doubt you'll find the same guys at the tables later on and get it back, and then some.

J said...

That's one snap judgment to make, without a lot of knowledge of the particulars of the situation.

Well, I wasn't making a "judgement".

And because I was commenting NOT on the fact that you overpaid, but rather your "thumbs up" attitude toward it, "knowledge of the particulars" is not relevant.

In any given year, folks overpay for any variety of unforseeable reasons (loss of job, major medical expenses, etc.), so a blanket statement that someone is "stupid" for overpaying - as someone said above - is out of line.

However, when it happens, it is not something to be greeted a "thumbs up" attitude. At best, it represents a missed opportunity. At worst, it is indiciative of poor financial planning.

What "risk" is it that your wife wishes to "avert"?

If she is concerned about underpayment resulting in paying a penalty, there are simple ways to avoid that without overpaying (which I'll note below).

However, if she's fearful of simply having to pay money that she owed anyway - but got to keep for several months and collect interest on ... well, then that's a perception problem.

Here's what you do...

First thing, note from your 1040 how much you owed in taxes in 2005. Obviously, it's less than you had withheld.

Now, you and your wife go into your respective HR deparments, and have your exemptions raised to lower your withholding such that the total amount withheld in 2006 will be just slightly over the amount you owed in 2005.

If you withhold an amount equal to what you owed in 2005, then, in most cases, you will incur no underpayment penalty even if you end up owing much more for 2006.

Now, take the money that this withholding reduction increases your paychecks by, and put it in a separate account at ING or Emigrant or wherever, and forget about it. This will minimize the "risk" of owing money in April of 2007, as you'll just pay it out of this savings account.

If she is really "risk averse" about this, put more money in this "tax underpayment" account ... say, oh, like your 2005 refund check!

"Risk aversion" problem solved!
"Loan to the government" money leak solved!

Standard disclaimer applies: check with your tax guy.

I'll say it again: interest-free loans to the government are -EV.

They are something to be avoided if possible ... and by no means something to give a "thumbs up" to on those occasions when they do happen.

J said...

When did the comments section become a tax planning flame-war?

It is an EV maximization issue.

Absolutely relevant to this blog.

EN09 said...

Last time I ever recieved a refund from my favorite Uncle Sam was '88. The next year I was beginning a career in the insurance industry and made some personal financial changes.

Two words. Get an accountant.

ScurvyDog said...

Thanks, j, for taking the time to return and add some more helpful info.

J said...

yes, i see from your latest entry you were really looking forward to my constructive addition.

glad i could provide fodder for your blog.

best of luck.