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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 04-03-2007, 08:23 PM   #41
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Re: What are your taxes looking like?

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".
Guess I got it right ... we owe $2400 fed and $750 state and just skated by the underpayment penalty for both.

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Re: What are your taxes looking like?
Old 04-03-2007, 08:24 PM   #42
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Re: What are your taxes looking like?

Originally Posted by TromboneAl
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.
Each year we've converted to the top of the 15% bracket. It's down to a routine.

Except that one year we cashed in some shares of TBGVX, with each share being about 60% unrealized gains, which cut back on the margin left over for a Roth IRA conversion. It was the right move to make at the time but we pushed back the completion of our Roth IRA conversion.

Now I realize that it may be more worth our tax money in 2008 to cash in more TBGVX shares from a taxable account for the temporary lower cap gain rates instead of converting Roth IRAs. (But I need to spreadsheet this to confirm it.) Our mortgage interest payments are shrinking a bit every year, which reduces our deductions. And unless I go hog-wild on solar PV in the next couple years, we'll never have another year of credits like 2006.

In 2009, having watched you & Sam deal with FAFSAs, it may be worth skipping mutual-fund sales and Roth IRA conversions altogether to flatten our income and minimize our expected financial contribution to our kid's college expenses. (Murphy's Law also guarantees that this type of financial foresight will result in her getting appointed to USNA.) I guess I'll have to forecast our expenses out two years in 2008 to make sure that we don't have to cash in anything in 2009.

The logic may be the same in 2010-11-12 (or whenever we're done with FAFSAs & EFCs). Hopefully no other financial shenanigans raise their heads so that we can wrap up the Roth IRA conversions before spouse's pension starts in 2022. But I cynically suspect that there'll be more changes to the tax code and other acts of legislative tinkering that may continue to make it more profitable to pay taxable cap gains instead of taxes on Roth IRA conversions.

Of course we've already set aside college funds, we're in good shape with the TBGVX gains, we're doing fine with the Roth conversions, and I'm just gaming the system to optimize our returns and minimize our taxes. This is a sniveling whimper, not a big financial challenge. But it's taking a lot longer than I expected...

Originally Posted by scrinch
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!
FWIW you're right and the IRS is wrong, but for some reason the burden of proof falls on the taxpayer.

If this situation is likely to come up again in future tax years, filling out form 2210-AI is a lot faster on Turbotax (and maybe Taxcut) than trying to do it by hand.

If the IRS had to document their income like a corporation, a huge portion of their bottom line would come from payments by people who are right but who aren't willing to put up with the hassle of proving it, or who are too intimidated by the IRS correspondence to stick up for themselves. Same for some states, especially California.


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Re: What are your taxes looking like?
Old 04-03-2007, 09:40 PM   #43
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Re: What are your taxes looking like?

Originally Posted by tryan
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!
Its good youare getting a child-tax-credit...make sure you invest that refund and give it to your kids when they grow up so they can pay off the taxes they will owe for all the spending done the last 6 years without bothering to raise the money to pay for it...thanks GWB. :P

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