Taxes

We all hate to pay them, but I started working on our’s this morning and was pleasantly surprised that after over 5 years of owing $6000 plus we are going to get a refund this year. My wife and I both make great money and I claim 0 and I think she may have been claiming 1, but regardless her school wasnt taking out enough taxes each year and it hosed us. I asked her to take additional out and it paid off.
Finally some good news and I wont have to use my bonus or much of it anyway to pay the tax debt, but I will have to use some to get the dogs teeth fixed because we kinda like the little bugger and want to keep him around. Vet says it will cause heart issues if we dont. He was a rescue.

I’m getting mine done tomorrow. I know the child tax credit went back up.

The whole “number of allowances” is outdated and not how it works anymore – that changed several years back. If your W4 is still set up to calculate your withholdings based on the number of allowances you claim, you need to refresh it. The IRS has a very helpful tool called the withholding estimator and it’s essentially a mini forward looking tax return that you fill out based on your specific tax situation (takes less than 5 min). Rather than give you a “number of allowances”, it will calculate specific dollar amounts for credits and additional withholdings you will put on your W4 when you resubmit it. The intent of this whole exercise is to adjust your federal withholdings such that you have a minimal return or amount to pay in at the end of the year. If anyone is still claiming a certain number of allowances (and not actual dollar amounts) on your W4, its time to refresh your W4 thru your employer ASAP.

https://www.irs.gov/individuals/tax-withholding-estimator

Gitchi, I looked into doing exactly what you said many years ago and that form made my dang head spin trying to figure out how to fill it out so I just gave up.

Yeah, I was confused by the change, too, but both of our employers forced us to update them, so that forced me to figure it out.

Taxes – one of the most dreaded task of the year. I’ve been putting off doing mine for a few weeks now. I need to just put then together and get them dropped off at the tax man this week. Hope I don’t get bent over to bad this year. I’ve tried to pay extra each Qtr. as a little e tea cushion.

Gitchi Gummi wrote:

The whole “number of allowances” is outdated and not how it works anymore

This is true and something to keep an eye on through the year.

The tax you owe, is the tax you owe. If you are getting a refund, you simply over paid.

The one thing to especially watch out for is when the feds decide to withhold less to get more money flowing in the economy. (Typically done during a recession.) This never changes what you owe and always results in a lower refund or higher amount due.

The goal every year should be to break even.

-J.

The goal every year should be to break even.

-J.
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That’s the advice my father gave me 45 years ago. He would say why let the government give you your hard earned money back (with no interest) when you could have been using it through out the year.

We work with our accountant to try and break even, and find ways to “pay ourselves first” to keep as much of our income as possible from counting towards the progressive tax table rates. When you are doing your taxes, it’s a great time to strategically lay out your plans for the upcoming year.

I used to do all of our taxes but with land purchases, having a “farm” account and all of the depreciation of assets that go with that…we’ve hired a local accountant that we work with year round. I wish I would’ve done it sooner. If you own land that you maintain/use and make income from it, there are overlooked options to dodge some of the excessive taxation.

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AK Guy wrote:

The goal every year should be to break even.

-J.

That’s the advice my father gave me 45 years ago. He would say why let the government give you your hard earned money back (with no interest) when you could have been using it through out the year.
[/quote]

This is exactly what we do, our goal is actually to have to pay a modest amount.

It amazes me the number of people who seem to view a refund as some kind of bonus. Like it’s free money or something. Yeah, it’s free money all right. A free loan you gave the government.

TheFamousGrouse wrote:

It amazes me the number of people who seem to view a refund as some kind of bonus. Like it’s free money or something. Yeah, it’s free money all right. A free loan you gave the government.

Yeah, I know a few people who think like that. They say now I have money for a vacation. I am like you could have already had that money and then some but you let the government sit on it all year.

CaptainMusky wrote:

Gitchi, I looked into doing exactly what you said many years ago and that form made my dang head spin trying to figure out how to fill it out so I just gave up.

whoever does your taxes should be able to input almost the exact same info into the IRS withholding calculator and figure out your new withholdings in a short time.

Gitchi Gummi wrote:

whoever does your taxes should be able to input almost the exact same info into the IRS withholding calculator and figure out your new withholdings in a short time.

The whoever is me LOL

CaptainMusky wrote:

<div class=”d4p-bbt-quote-title”>TheFamousGrouse wrote:</div>
It amazes me the number of people who seem to view a refund as some kind of bonus. Like it’s free money or something. Yeah, it’s free money all right. A free loan you gave the government.

Yeah, I know a few people who think like that. They say now I have money for a vacation. I am like you could have already had that money and then some but you let the government sit on it all year.

For most people it is just like getting a bonus. You really think most people are disciplined enough to save this money throughout the year when alot of them are living paycheck to paycheck..?

stout93 wrote:

For most people it is just like getting a bonus. You really think most people are disciplined enough to save this money throughout the year when alot of them are living paycheck to paycheck..?

I agree. Its also the reason I escrow my property taxes and ins instead of paying out of pocket way back when because I knew I wasnt disciplined enough to save the money myself back then.

Closest I have ever been to “breaking even” on taxes. I owe $13 between federal and state taxes. LOL.
Owed on federal, getting small amount back from state.

My goal every year is to not get a refund. State taxes got me this year.

Taxes due:

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Sure, bring up taxes! Now I need a drink.

You guys smoking “medical” dope getting tax exemption on it?

Dutchboy wrote:

You guys smoking “medical” dope getting tax exemption on it?

and they call it DOPE…….for a reason!!!!!

Just completed ours using Taxslayer.

Gotta say…both the gal and I are getting significantly less back in fed and state refunds versus previous years. Not much as changed as far as income…

2 years ago TurboTax calculated things wrong and then ended up getting that dreaded letter from IRS. I was a dummy and didn’t upgrade to the higher package where I would’ve been protected and ended having a massive payout. Still ticks me off.

Gitchi Gummi wrote:

whoever does your taxes should be able to input almost the exact same info into the IRS withholding calculator and figure out your new withholdings in a short time

This is exactly what I do – in fact I just did it this morning. I had the accountant who does my taxes make the best educated guess he can so that my with holding is just the right amount so I break even come tax time.

Doesn’t always work out the greatest but it’s usually relatively close.

Find yourself an Ex IRS agent… they do great work !