Friday, March 6, 2009

My 2008 Tax Returns

I told you I would update you on update you on the status of my taxes, so here we go:

I am getting a $3,578 refund for my Federal taxes. I am getting $156 refund from state taxes, and I owe $364 for my city taxes. I also owe $285 to the accountant for filing them for me. So, when all is said and done, the amount coming to me will be $3,085. Whew!

Honestly, that is way too much. I am one of those people who doesn't believe in giving the government a free loan. Heck, my checking account pays 5%! I certainly can't say that about Uncle Sam. My accountant told me how to change my withholdings so that won't happen again next year. One thing I need to keep in mind is that next year I will be paying far more home interest. This year my ex had the house for 6 months and I had the house for 6. Next year it will be all mine. So, I increased my deductions at my office payroll so that approximately $3,200 less in taxes will be taken out. That will ultimately effect my paycheck and also my $900 a month goal. My ultimate goal would be to have the government pay me a little, somewhere around $300 - $500, while the rest goes into my pocket!

Like Goldilocks and the Three Bears, my state refund was 'just right.' Not too much or too little, I am pleased with the way that one turned out. I like to get a little back so that I have a cushion and don't have to pay, and that money can go towards paying the accountant.

However, I wasn't as excited about the city taxes, but I have a plan for that too...

As I mentioned in another post, the reason I owe city tax is because my office was not doing the proper tax withholding. I talked to one of my coworkers and he ran into the same thing last year. Basically, our office accountant didn't have me as a resident in the city of which I live. My guess is that it was that way last year too, since my coworker had problems with it then. My ex handled the taxes last year and because he was threatening to move out of the house before my apartment lease was up (leaving me with either two payments I couldn't make or forcing me to forfeit my security deposit) I offered him the tax return money as a temporary bribe to keep him in place. (Yes, that was the same time I got a lawyer.) Anyway, for obvious reasons he didn't mention the issue to me. Ah well, it is all water under the bridge. I talked to our office accountant already and he has fixed the problem, so it shouldn't be so much of an issue next year. I might be two months low, but that should be okay. I certainly don't need another $300+ bill next year!

So, now I know $3,085 is coming to me, the question is, what am I going to do with it? While it is tempting to go do something fun, I am actually going to take the whole thing and dump it into my emergency fund. If I do that, plus what is in there now, I will have have my 2009 goal of having one month of income successfully completed! Note that my "one month of income" includes not only my regular 40 hour a job pay for a month but also the $900 I need every month. By putting my tax return dollars away, I will not only hit that goal, but exceed it.


Photo by: Pixieclipx


J. Money said...

that is awesome!!! i know you don't like giving the gov't a loan, but my damn is this good money for you right now :) congrats!

Kristy @ Master Your Card said...

I'm with you on not giving the govt a tax free loan. I don't really understand why people would rather do that and get more back in April, but different strokes I guess. At any rate, I haven't done my taxes yet this year (I'm a terrible procrastinator when it comes to this!), so I have no idea what I'm getting back. I think my W4s are wrong, though, so I may have accidentally contributed to the free loan this year. We'll see.

Sorry about your city taxes! That stinks. I have the good fortune to live in Texas where we have neither state taxes nor city taxes. I think that will take some serious getting used to if I ever leave Texas!

Dawn said...

J. Money - I won't deny, I can certainly use this money! And seeing how I had NO idea how my taxes would come out this year, this is far better than paying!

Kristy - I am a procrastinator too! I used to be one of those midnight filers - even when I knew I was getting a return. The only reason I wasn't this year was because someone else was doing them for me! Wow... no city or state taxes. I have two friends who have talked about moving to Texas - I'll have to tell them about that benefit!