I’ve been working on my taxes for a few weeks on and off as paperwork comes in. I use TurboTax, so it’s easy to enter some numbers, close the program, and then enter more numbers as I get more information. One great feature of TurboTax is that as you enter data, it updates how much you’re going to get back (or owe) as you enter numbers.
I almost always owe money, so I’m never surprised to see that number in the red, but this year, it seemed awfully high. I got my last numbers earlier this week, and was shocked when I entered them. I owe a solid chunk of money to the federal government (but my state tax bill was where I expected it to be). I couldn’t figure out what was going on… then I checked out my tax paperwork. For whatever reason, my number of allowances was significantly higher than it should have been. I’m not sure when or how that happened, but I have a feeling that the number was calculated when I started the job in September of 2007, should have been changed for 2008, and I completely forgot about changing it.
Conveniently, that’s something I can do online, so it’s done and should take effect sometime around mid-month. I have to admit, I’m very apprehensive about this. I’m scared to see what my new paycheck is going to look like! Of course, I would rather not have a huge tax bill to pay at the end of the year, so this is a good step, but I still feel like I’m taking a financial hit because I will have less money to budget every month.
Of course, I wasn’t budgeting for such a high tax bill, so my pseudo-emergency fund will be taking a hit. But that’s what it’s there for.
Here’s to hoping next year’s tax season is an improvement!