I finished our taxes last night, and what a relief that was. It was the culmination of our plans in 2010. Here’s why:
1) I adjusted our withholdings earlier in the year so they would be as near to perfect as possible.
2) We wanted to maintain our student lifestyle even with our significantly better jobs/income.
3) We wanted to reduce our taxes through the use of Section 125 plans and pre-tax retirement savings (401k and 457b).
So, did we succeed? I’d say so.
1) Our federal refund is $201, and our state is $161. The only reason we got a federal refund was that neat little $800 Making Work Pay Credit. I have no idea what that is, but I trusted TurboTax that we qualified for it. We also got a $66 credit from our state because we had Long Term Care insurance.
2) By rough estimates, we put a bit more than 20% of our 2010 adjusted gross income toward debt and a fully funded emergency fund. In other words, we lived just fine on 80% of our income.
3) A rather large portion of our gross income went into our 401k, 457b, and a cashed-out mutual fund toward the end of the year went directly into an IRA.
I already adjusted our withholding for 2011 to get it even closer this year–woo, slightly more take-home pay! I’ll check throughout the year to make sure we’re still on track, because I’m nerdy like that, and it makes me happy to see that “your refund or tax payment will be $25 or less.” Aww, yeah.