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View Poll Results: Are you getting back big $$$. About even? Do you owe?
I owe more than $10k 20 13.79%
I owe more than $5k 11 7.59%
I owe a bit 34 23.45%
About even ( I got it right!) 15 10.34%
I'm getting back a bit 39 26.90%
I'm getting back over $2k 11 7.59%
I'm getting back over $5k 12 8.28%
I'm getting back over $10k 3 2.07%
I'm getting back an obscene amount! 0 0%
Voters: 145. You may not vote on this poll

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Re: What are your taxes looking like?
Old 03-12-2007, 05:33 PM   #21
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Re: What are your taxes looking like?

Quote:
For those of you living only off investment earnings, do you pay estimated quarterly taxes to Uncle Sam?
Yes, that's what you need to do. I'll make estimated tax payments that match exactly the tax that I paid last year. My tax will go up next year, due to Roth conversions, but as long as I paid 100% of my prior year tax, there can be no penalty.
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Re: What are your taxes looking like?
Old 03-12-2007, 05:41 PM   #22
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Re: What are your taxes looking like?

Owe $3700.

We claim 0 but two good earners no mortgage no kids no nuthin.

When I saw total I went into HR office and had an additional $100 taken withheld paycheck, that should get us closer.
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Re: What are your taxes looking like?
Old 03-12-2007, 05:57 PM   #23
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Re: What are your taxes looking like?

Quote:
Originally Posted by TromboneAl
Yes, that's what you need to do. I'll make estimated tax payments that match exactly the tax that I paid last year. My tax will go up next year, due to Roth conversions, but as long as I paid 100% of my prior year tax, there can be no penalty.
I'm quite certain it is 110%.
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Re: What are your taxes looking like?
Old 03-12-2007, 06:15 PM   #24
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Re: What are your taxes looking like?

We have not done them yet but I see no difference from last year when I owed $5k. I always pay state too since they have no penalty for under-withholding and no real provision for periodic payments.

Taxes for 2007 should be lower due to only working part of the year and using exiting funds for living expenses with a small pension as income. Next year will be mostly capital gains taxes as I start cashing in my equities in my after-tax accounts. That cycle should continue for 3-4 more years until I sell down the pile and balance the dogs and cats along the way.

I hates taxes.
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Re: What are your taxes looking like?
Old 03-12-2007, 07:33 PM   #25
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Re: What are your taxes looking like?

Quote:
Originally Posted by shiny
I'm quite certain it is 110%.
110% is for folks of a certain income level. 100% works for most folks.
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Re: What are your taxes looking like?
Old 03-12-2007, 07:51 PM   #26
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Re: What are your taxes looking like?

I posted this before. We had a significant state refund last year. Of course we had to claim that this year...no biggie, BUT it gets added back in "above the AGI line" so that refund was counted in last years AGI and its included again this year. It was enough to limit some deductions for us like tuition interest,etc.....so now I gotta rack my brains to avoid this in the future. Im used to not paying much attention to my state situation, but we are now in MD and the state taxes require more diligence...every time I think Im getting into a groove, some wrinkle comes along.
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Re: What are your taxes looking like?
Old 03-12-2007, 09:43 PM   #27
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Re: What are your taxes looking like?

Got nothing from the IRS, and gave nothing to the IRS, exactly as it should be.

Got a hefty mortgage tax credit at year-end from Japan, but I don't have a choice about the withholding, so no way to avoid making the free loan over the course of the year. (As far as I know... hmm.... that may be something to look into.)
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Re: What are your taxes looking like?
Old 03-13-2007, 11:12 AM   #28
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Re: What are your taxes looking like?

I got a bit back this year (for '06) from the feds and the state. Next spring I should just about break even....I hope! I'll also be dropping from 28% in '07, to 15% starting in '08. I went over and talked to my old CPA and had him figure out what I needed to have deducted from my pension, and his figures matched my guess-timates. I'll know for sure after my second pension check (in June), and then I can change my W-4P if I need to.

Another nice thing.....I don't have to pay any state tax on my pension!!! (it's one that's tax-exempt here in IL)
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Re: What are your taxes looking like?
Old 03-13-2007, 11:49 AM   #29
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Re: What are your taxes looking like?

Quote:
Originally Posted by Laurence
I guess my poll wording wasn't exactly right, since ultimately, if you owe the largest amount possible without incurring a penalty you "got it right".
I know that's what I have done because I pay the minimum I can for estimated payments, based either on last year's taxes or my best estimate of our income for 2006 and 90% of taxes owed (whichever is less).

I don't know the $$ yet. We have to figure our actual taxes for that. My estimated income tends to be a little high, because we never find out what the qualified dividends are until we get the 1099s, so I have to assume they are unqualified when I estimate taxes.

Oh, and we don't calculate taxes until second half of March, because we always seem to get corrected 1099s....

Audrey
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Re: What are your taxes looking like?
Old 03-13-2007, 12:32 PM   #30
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Re: What are your taxes looking like?

We got back MORE than we paid ($998) ... apparently the child tax credit is refundable even if you don't pay into the system.

Thanx GWB!
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Re: What are your taxes looking like?
Old 03-13-2007, 01:32 PM   #31
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Re: What are your taxes looking like?

We owe $708 to the feds and should get a $114 refund from the state.

This is a couple hundred more than last year, which surprised me a little, as my husband retired last year and collected a pension for most of the year, but dividends were greater and I had a stock sale that netted $3400.

For '07 taxes my pension will kick in the last quarter, and for '08 we'll both be receiving pensions, so that's the one I'm almost looking forward to figuring out.

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Re: What are your taxes looking like?
Old 04-03-2007, 02:38 PM   #32
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Re: What are your taxes looking like?

Well, we can finally join the poll. We're getting over $2500 back from the feds, we paid only 2% of our taxable income, and we won't be paying state taxes for another three years.

Spouse only had $112 federal tax witheld last year and we did the rest with estimated taxes. I was way too conservative in my estimates and, coincidentally, sent in $2600 last January that I shouldn't have. Our rental house lost a good bit more than I expected and I was way too "conservative" with energy-conservation credits.

At last we get to take credit for our solar (photovoltaic & hot water) systems that we put into service in January 2006. The expansion of the PV system was $8000 (for a $2000 federal credit) and the water system cost $1040 for a $312 federal credit. What surprised me is that radiant foil insulation and some roof work also qualified for another $327 in credits. Of course we're spending excess money to get some back in avoided taxes, but our electricity bill is paying that back doubletime!

It pays off even more in Hawaii taxes. Our Roth IRA conversion was effectively free because the solar improvements generated over $3100 in credits. Our tax bill was only $706 this year so we have over $2400 to carry forward for at least the next three years of local taxes.

A side benefit of such a low tax bill is that our estimated federal taxes for 2007 will be just as low since we only have to pay the extent of the prior year's tax bill. It lets me out of an entire year of tax spreadsheeting & other estimating.

After this year's credits, our 3000-watt PV system cost is now down to $10,400. The rest of the Hawaii credits will drop it below $8000. We've already generated over $1800 of electricity over the last two years so the payback is less than a decade away... even before HECO raises their rates.

I learned a couple tax concepts this year:
- I should really calculate the Schedule E rental real estate numbers before the January estimated tax payment. Failure to do so whipsawed our spending a bit and gave the feds three free months of our interest.
- I held off starting taxes until after Fidelity's corrected 1099s (late March). In retrospect I should have started in February with 1099-DIVs and -INTs and Schedule E. I could probably have even chugged through some of the credits, and when the corrected 1099s arrived it would have taken very little additional deadline time to finish the returns.
- It might be worth holding off the 2008 Roth IRA conversion in favor of exploiting favorable cap gains rates to harvest long-held mutual fund shares in a taxable account that we'd like to get rid of. The Roth IRA conversion would be taxed up to the top of our 15% bracket but the cap gains tax rate is a lot less for shares that we want to sell anyway. (Tweedy, Browne Global Value)
- It might be worth holding off everything (cap gains & Roth IRA conversions) in 2009 to stomp hard on the FAFSA numbers before the kid's 2010 matriculation. Of course this gaming is rendered moot if she goes to a school with a full-ride merit scholarship. I've read that recent FAFSA website upgrades now let one look at the effects of playing with different scenarios, so that question should be a lot easier to answer in a couple years.
- Gaming the tax brackets with incremental Roth IRA conversions takes a lot longer than I expected-- what was originally a 5-8 year estimate may go as long as 20. But we don't have to confront RMDs until 2030...

I don't say this often, but from a tax perspective it was a very good year!
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Re: What are your taxes looking like?
Old 04-03-2007, 03:19 PM   #33
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Re: What are your taxes looking like?

Worked on mine last weekend. I have to pay 7600 Federal and 800 State. I wasn't able to deduct the wife and kids college cost and one of my sons is finally on his own. So far his being on his own is saving me alot more than the deduction.
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Re: What are your taxes looking like?
Old 04-03-2007, 03:39 PM   #34
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Re: What are your taxes looking like?

We will get about $950 back. We moved some $$ around, generating gains and losses, so I wasn't exactly sure how it would all work out without getting the details done.
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Re: What are your taxes looking like?
Old 04-03-2007, 04:44 PM   #35
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Re: What are your taxes looking like?

I should get $600 back from the Fed. But,-- I owe the state, $147. No Biggie!

Now, what scares the Bejeezes out of me, is the realization that, once the DW quits working and we are living on SS and interest income only, my fed tax bill will jump to
over $5,000. (I'm currently retired, wife is probably, a couple of years away.) That,
could change in a heartbeat, as the stress at work spirals ever upward.

What a startling and revolting development!! No more deductable IRA contributions,-- no more 401k deductions. Hello to, --AMT, Quarterly payments, Estimated Tax,-- State an Federal of course.

Is the good life, really over, for good?
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Re: What are your taxes looking like?
Old 04-03-2007, 06:13 PM   #36
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Re: What are your taxes looking like?

We got $4450 back from the feds and $480 back from the state. A nice letter from the IRS last week told me that while I overpaid the feds for the year, I still got hit with a $108 penalty for not making even estimated payments throughout the year. My first income from consultant work didn't arrive until June (no income Feb-May), so I made no April estimated payment. Bad idea. I had to pay interest to the IRS on that portion of my total taxes that was not pre-paid in April. I know I could probably fill out an IRS form to avoid the penalty, but I'm not gonna. I spent 3 hours digging up the info and filling out the form and its schedules before I finally gave up. Life is too short for that!
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Re: What are your taxes looking like?
Old 04-03-2007, 06:24 PM   #37
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Re: What are your taxes looking like?

Scrinch:

I'd call the " IRS Genie," It's only a phone call They may, be able to help.
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Re: What are your taxes looking like?
Old 04-03-2007, 06:29 PM   #38
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Re: What are your taxes looking like?

Quote:
- Gaming the tax brackets with incremental Roth IRA conversions takes a lot longer than I expected-- what was originally a 5-8 year estimate may go as long as 20.
Nords, can you explain this? I was just planning on converting the max amount that keeps me in the low bracket each year until I've decided I've converted enough.
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Re: What are your taxes looking like?
Old 04-03-2007, 06:41 PM   #39
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Re: What are your taxes looking like?

State and Federal north of 15k - single, no Katrina losses for 2006.

heh heh heh - of course - I could wait 7 more years before RMD forces the spending jump. Better party before I get toooo old. . :., 8).
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Re: What are your taxes looking like?
Old 04-03-2007, 07:39 PM   #40
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Re: What are your taxes looking like?

We're paying 1300 to the feds, a couple hundred to state. My income jumped about 30% and DH's more than doubled thanks to a promotion and a return to software development (he finally decided the struggles involved in being a male teacher weren't worth it) respectively. We will more than likely have mortgage interest to deduct before dec. 31, so this should be the last year we have to pay taxes for a while. :-)
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