For the last day and a half, all I could think of when I thought of my I post was Internet. But, honestly, what could I say about the Internet in a short blog post? This morning, as I was thinking about money, I realized another thing that I could stand for: IRS.
I am OK with paying taxes. I don’t think my personal taxes are particularly onerous or outrageous. I’d be OK with our leaders raising taxes, although the bulk of higher taxes should be paid by the rich. General Electric made billions and paid no taxes? Let’s fix that. Taxes pay for help for the poor, the elderly and the ill and ailing. Clinton raised taxes and our economy boomed; Bush lowered taxes (and Obama is afraid or unable to raise them again) and our economy is struggling - though not, of course, for the rich.
That being said, I try to structure my withholding through the year so that my annual bill on April 15th is as low as possible. I don’t like getting a big refund because I want to be able to have that money during the year. In fact, I try to aim for having to send the Feds and Oregon a small check. The closest I’ve gotten it in the past is a total liability of about $300 between the two taxing authorities.
Last year, as normal, I watched my withholding and used a website to see how close I was getting. Yes, I manage my money actively through the year. I switched my W-4 form to take less out sometime in the summer; that extra money I was getting helped me pay down, and eliminate, my debt late last year.
This year, as normal, I sat down with my final paycheck stub of the year in early January and estimated my taxes. In my eagerness to get it done, I did it prior to Congress and Obama passing their tax cut economic stimulus package. I made a mental note to re-check before actually filing in April, and I was pessimistic that Obama would get his middle-class tax cut, but it looked like I’d need to set aside about $600 to make up the difference. I added that to my budget and promptly forgot about it.
Until this weekend. I went back into the tax software and my first stop was my W-2 form, to see what difference, if any, there was between my last paycheck stub and this form. There was, in fact, a difference; my reported income on my W-2 form was lower. Then I was surprised again to find that I qualified for Obama’s Making Work Pay tax credit of $400!
All told, instead of having to pay about $600, I’m getting a refund of $38 from the Feds, and I’ll owe my state $95. The money I set aside can go towards other things (mostly savings but maybe something fun, too).
That’s the closest I’ve ever come to coming out even on Tax Day. Doubt I could do much better. And I made good use of that money last year.
That’s so much better than getting a fat refund check that I’ll blow on something dumb. At least to me. Your mileage may vary.
