I’m Getting A Decent Tax Refund
March 30, 2009 – 6:23 amI’m getting a decent-sized tax refund this year, which is both good and bad news. Although I like this unexpected surprise of extra cash, I also know that I basically loaned the government money for free for a year. Not that you get much return on in savings accounts these days anyway, but I digress…. 
My dilemma is that the amount of taxes I owed over the past few years have varied to a large degree. A few years ago a didn’t have a house, and now I do. Some years I had some pretty big investment gains, and some years I had losses or didn’t make any trades at all. My wife an I also made some other major changes as well. We switched her retirement funds (new deposits) to go into a Roth 401k instead of a regular 401k. This increased our taxable income (obviously).
So my plan to address things this year is two fold. First, I changed my w-4 to include 2 exemptions. Last year I claimed zero and had them withhold a little extra money from every check.
Secondly, and more importantly, I’m going to review my total tax withholdings mid-year and comparte it to what TurboTax says I will owe at the end of the year. This way I’ll be able to track my withholdings and see if I’m headed for paying only what I owe. I’ll need to make adjustments for any taxable distributions and capital gains/losses I expect to have this year, but even without being sure about those items I’ll know if the tax withholdings on my primary income are enough. With 2 kids on the way this year I’m not exactly sure what impact will have on my taxes, but I can plug that into TurboTax as well and get an estimate.
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One Response to “I’m Getting A Decent Tax Refund”
Way to go. I had to pay few dollars this year but it wasn’t that bad. With this economy, every penny counts.
By Solo on Apr 2, 2009