I’m not sure how the state tax return is going to fall out, but it looks like I’m getting a significant chunk of change [...]]]> I am still waiting for one form from my former mortgage company so I can finish my tax returns.  And things are looking good!  Or bad, depending on how you view taxes.

I’m not sure how the state tax return is going to fall out, but it looks like I’m getting a significant chunk of change from the feds.   I’m definitely pleased about this as it makes a great start to my Roth IRA contributions for the year.  On the other hand, that’s money that could have been in my pocket throughout the year.  Typically, I like to try to break even, but over the past couple of years, I haven’t been able to make that work.

So I have two options – I can change my withholdings again (I did it once when I bought my house) or I can just live with it and enjoy the extra cash every spring.  I would definitely rather get money back than have to pay in, that’s for sure.  And with interest rates as they are, I’m not really coming out that much ahead by getting the money and putting it into savings.  So maybe it’s best to keep things as they are.

No, just me then?

But I have to admit it.  I’m really excited to do my taxes.  It’s like an adventure, hoping that I made the proper choices and that I’m getting close to breaking even.

(Actually, I’m hoping I’m getting money back – I made some changes to my [...]]]> Is anyone else really excited about tax season?

No, just me then?

But I have to admit it.  I’m really excited to do my taxes.  It’s like an adventure, hoping that I made the proper choices and that I’m getting close to breaking even.

(Actually, I’m hoping I’m getting money back – I made some changes to my withholding when I bought the house, but I wasn’t sure how much of a change to make.  I’m hoping that I underestimated.)

I like the excitement of all of the paperwork coming in and entering it all into TurboTax to see what comes out.  It’s fun!  I know that it’s crazy.  But I’m still excited.  I can’t wait til the files come in!

Okay.  So, those of you left, how were your taxes this year?  Did you owe a lot of money?  Did you get a lot of [...]]]> So by now, if you’re in the U.S., you should have either finished your taxes or requested an extension.  If you haven’t, stop reading this post and go get an extension!

Okay.  So, those of you left, how were your taxes this year?  Did you owe a lot of money?  Did you get a lot of money back?  Did you ultimately break even?   There are differences of opinion as to what the best result is.  Some people like to owe money – that way, their money has been with them the whole time, earning interest for them, not for the government.  Some people like to get a huge refund – it’s like a savings account that you don’t have to think about (of course then the government is earning all that interest).  And some prefer to get that final number as close to zero as possible – no need to pay anything but the government wasn’t getting any interest on their money either.

Personally, I like to get a small refund.  It’s less about getting the money back and more about knowing that I have the padding so I don’t have a big payment come tax-time.  It’s always a bit of a balancing act, and things will definitely change for me when I do my 2011 taxes, as I bought a house and will have a mortgage interest deduction.  I’ve adjusted my withholdings slightly, but who knows.

What I do know is that I like to finish my taxes as early as humanly possible.  I saw those lines outside the post office.  I do not ever want to be in them, thank you very much.

What is your tax withholding policy?  Love that huge refund?  Consider it a game to try to get as close to zero as possible?  Hold on to your money until the last second?  And do you like your method?

Closing finally happened yesterday afternoon.  It wasn’t the smoothest of processes getting there, and I got my final numbers for settlement not an hour and a half before.  Thankfully, I could just do a wire transfer online.  Let me tell you, transferring [...]]]> The house is mine!  Well, mine and the bank’s.  But some of it’s mine!

Closing finally happened yesterday afternoon.  It wasn’t the smoothest of processes getting there, and I got my final numbers for settlement not an hour and a half before.  Thankfully, I could just do a wire transfer online.  Let me tell you, transferring that amount of money is absolutely terrifying.  It’s all too easy to do.  But it was easier than trying to get to the bank (at lunchtime, of course) and also trying to get to the house to do a final inspection, and then drive across the city to the Realtor’s office.

It was a lot of papers to sign.  Before settlement, I did my research and read up about what sort of papers I would be signing.  That made the process a whole lot smoother, that’s for sure.  And the seller did all his signing earlier, so he wasn’t even there.

And then that was it.  It was mine.  Honestly, it was pretty anticlimactic.

Rather than celebrate, I went to Home Depot and picked up some of the things I knew I needed, then walked around the house in the dark.  And discovered one of the living room switches doesn’t work.  Not the greatest of things to discover, but my Realtor said to let her know if I uncovered anything else that the seller should have fixed.  Honestly, by this point, I don’t expect them to do anything.  There’s also a broken handle on a bathroom cabinet that happened sometime between inspection and closing.  Should it be fixed?  Probably.  Do I expect to have to do it all myself?  Absolutely.

But that’s not a big deal.  The house is mine!  I’m giving notice at the apartment building on Monday.  Unfortunately, I’ll have a month of paying both rent and a mortgage, but I factored that in to my moving expenses.  Today, I moved over a bunch of boxes that I already packed, made a trip to IKEA to scope out some storage ideas, and cleaned the entire second floor.  Now I’m home packing up some more boxes.  It’s been a productive day.

Oh, and I finished my taxes too.  I’ve already changed my withholdings for next year – I got a decent sized return from the feds this year, and with the mortgage interest deduction, that will only increase.  Clearly, I need to change things so I’m taking more home every paycheck.  I’m going to let all my bills settle out over the next few months to get a handle on my finances and then, hopefully, be able to increase my 401k contributions.

It’s all very exciting.  And overwhelming.  But exciting.

I am in training this week, hence the lack of blog posts. But I did have an interesting financial conversation yesterday. A guy in my group is foreign [...]]]> Anyone dreading April 15? Not me! I have a dinner date with an old friend that night. But maybe more importantly, I finished my taxes weeks ago.

I am in training this week, hence the lack of blog posts. But I did have an interesting financial conversation yesterday. A guy in my group is foreign and here on a work visa. He has been working for this American company for a few years, but rather than drawing from his salary, has been letting it accumulate tax free in a bank account here. Now, when he moved, he had to put it into some fund to keep the tax free status, but now he’s worried about paying taxes in general. He’s used to a system where the money you owe in tax is just taken. The end. No later payments, no tax refunds. It was interesting to learn a little bit about another system and to hear just how crazy our system sounds to a foreigner.

One good thing came out of it. He just got here in February and was told by a coworker that when he files taxes, he will owe from the date of his move. True, but he thought that meant that when he files now, he will owe for that period, not realizing that we’re filing for 2009. Of course, we encouraged him to call his company’s relocation division and maybe the IRS helpline for clarifications about other reasons he may need to file.

Just goes to show how ridiculously confusing our system is, even on the simplest level.

Final result?

Well, on the up side, I didn’t owe any money, a significant change from last year.

But in trying to balance that, I ended up paying too much in taxes, so I’m getting back around $2000.  So I need to make some adjustments.

The state [...]]]> Thanks to TurboTax, I finished and submitted my tax returns this weekend.

Final result?

Well, on the up side, I didn’t owe any money, a significant change from last year.

But in trying to balance that, I ended up paying too much in taxes, so I’m getting back around $2000.  So I need to make some adjustments.

The state tax will be easy to adjust.  After I owed so much last year, rather than adjust my allowances, I just had an additional $30 withheld.  $30 was an estimate and it turned out to be too much.  So I just need to reduce that amount a little bit.  I can do that very easily online, so it’s not a big deal at all.

Federal tax will be a little bit more confusing.  I did find a really helpful site though.  TurboTax has a chart that estimates approximately how much each allowance is worth per year.  So as a single filer, if I make $50,000 a year, each allowance is worth about $913.  Since my tax refund was more than $913, I should be able to take one more allowance, get an extra $76 a month (according to the chart), and still be fine for my 2010 taxes.

The question is whether or not I actually want to do that.  I always say that I want to break even.  But I much prefer getting money back to owing money.  The smart thing to do would be to take that extra allowance and put that $76/month into a separate savings account and let it grow.  Even if I do end up paying money back to the government, once I’ve finished my taxes next year, I can take all that money and treat it like my own personal tax refund.

So I’m going to sit down and think about what my financial situation is going to be over the next year and then make a decision.  I am pretty excited to see this year’s tax refund though – I think it’s all going to go into my vacation fund.

Don’t forget, today’s the last day to enter the contest!   So far, the odds are pretty good!

I’m doing my taxes!  Yay!

(No, that wasn’t sarcasm.)

My last tax form is now available online, so this weekend, I will be doing my taxes and finding out just how well I estimated.  I’m really hoping I estimated poorly and I get a chunk of money back, but I’m just not [...]]]> What are you doing this weekend?

I’m doing my taxes!  Yay!

(No, that wasn’t sarcasm.)

My last tax form is now available online, so this weekend, I will be doing my taxes and finding out just how well I estimated.  I’m really hoping I estimated poorly and I get a chunk of money back, but I’m just not sure what’s going to happen.  Mid-year, I sold off some mutual funds that I owned for a few years, and then repurchased them a month-ish later, per the recommendation of a broker.  As he explained it, that meant I could take the capital loss on my taxes.  It makes sense in theory, but we’ll see how it works out in practice.  It would be nice, that’s for sure!

If I do get money back, it’s going straight into the vacation fund.  A friend is getting married this summer in a place that will cost me around $500 to get to – and it’s not even a beautiful island paradise.  I don’t want to miss her wedding, so I better start planning for that expense now.  I’m also running the Disneyland Half-Marathon in September – more spending.  But that should be a really fun trip, so it’s money well spent.

Hoping for a tax refund?  What are your plans for that money?

Probably not, but I’m sure I’m in the minority.  I love tax time.  It’s a bit of a game to me – to see if I can get the numbers just right so that I have a small refund.  No tax free loans [...]]]> Am I the only one excited that it’s time to do my taxes?

Probably not, but I’m sure I’m in the minority.  I love tax time.  It’s a bit of a game to me – to see if I can get the numbers just right so that I have a small refund.  No tax free loans to the government for me!  I mean, if I suddenly got a huge refund, I wouldn’t be upset, though I would change around my withholding for 2010.  But in an ideal world, I will come very close to zero.

If I’m honest with myself, I’m probably going to owe money.  One of the downsides to being a saver with no mortgage (yet).  That interest income starts to hurt, even though it’s not all that much.  I do a good job of tracking everything and taking every single deduction I can, but ultimately, I end up owing money.  It’s just a question of how much.

I’m pretty good on the federal tax side.  It’s the state taxes that tend to throw me off.  So we’ll see how things go!  I use TurboTax and my copy arrives tomorrow.  Of course, I don’t have any of my paperwork yet, so I can’t really get started, but it’s still exciting.

How do you feel about tax time?  Do you dread it?  Put it off til the last minute?  Do you use your tax refund as a savings method?  I know people who purposefully have a chunk of money withheld because if they tried to just save it, they would end up spending it.  Thus, even with the interest-free loan to the government, they have more money than they would otherwise.  If that’s what works for you, then it makes sense to me.  Just make sure that if you’re supposed to pay your taxes, you’re paying them.  Breaking the law is never good.