Join Early Retirement Today
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

Reply
 
Thread Tools Display Modes
What are your taxes looking like?
Old 03-11-2007, 11:53 AM   #1
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
What are your taxes looking like?

So DW and I did our taxes with my parents ( having a Dad who's retired IRS has it's bennies). We found out we'll be getting back almost $11k! Normally we aren't this dumb, it usually clocks in at a $1,500 return from feds, about $400 owed to state. This time both are sending money back, and the Feds big time! The reason is DW started consulting last year (rather than being employed) and we were very conservative with her quarterly estimate checks ( don't want a fine!). Our plan is to use safe harbor from now on, but I have to tell you, it's a pretty intoxicating feeling to get a phat return! Unfortunately, it's all going to my graduate school or in her IRA. No Nintendo Wii for me

Anybody out there do the big return thing, even though you know it's loaning free money to the gubmint? Get an unexpected big return?
laurence is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: What are your taxes looking like?
Old 03-11-2007, 12:22 PM   #2
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 113
Send a message via AIM to vvsonikvv
Re: What are your taxes looking like?

Just completed mine. Was nice and easy since I'm simple. No mortgage no children, none of that. Just a job. Got a little back.

I did owe $1 to state.
vvsonikvv is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 12:28 PM   #3
Full time employment: Posting here.
 
Join Date: Dec 2006
Posts: 509
Re: What are your taxes looking like?

I'm upset to be getting back over $5k this year between CA State/Fed. I declared 8 on both State/Fed, recently upped to 9 due to birth of a child. Now going to up to 10. I wish they had an 11.

I'd much rather owe $5k then get back $5k. No sense in giving them such a significant tax-free loan.
Peaceful_Warrior is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 12:45 PM   #4
Gone but not forgotten
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
Re: What are your taxes looking like?

Finished mine yesterday .I owe $1467. Not bad ! Funny story ,my late husband worked for the IRS and when I complained about not getting a refund he'd whip out his checkbook and write me a check for a refund .He had a great sense of humor .
Moemg is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 01:09 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Re: What are your taxes looking like?

Quote:
Originally Posted by Moemg
....when I complained about not getting a refund he'd whip out his checkbook and write me a check for a refund .He had a great sense of humor .
Whenever someone tells me they wish they were getting a bigger refund, I say 'Just give me $1,000 each month for 12 months. 15 months later, after you fill out a multi-page form asking for your money back, I will give it to you. Instant $12,000 refund!'.

Heck, I'd even put it in an escrow account - no risk on their part.

They look at me like I'm from outer space - they still don't 'get it'.

The other analogy I use - When you buy a pack of gum at the news stand, don't give the guy a ten and ask for the change back. Give him a $100 bill, and tell him you will be back for your change next April 15th. Do that every week and you will have a big pile of money due on the 15th. Whoppee, you get your own money back.

And they still don't 'get it'.

-ERD50
ERD50 is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 01:21 PM   #6
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 880
Re: What are your taxes looking like?

We got about $350 back - so we came pretty close to even.
__________________
"Tell me, what is it you plan to do with your one wild and precious life?" - Mary Oliver
Dog is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 02:49 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,401
Re: What are your taxes looking like?

I'm seeing my accountant tomorrow. I reorganized my finances following an inheritance and I know that in 2006 I had more taxable dividends and income than before, so I expect to be writing a cheque, amount TBA. My accountant and I always try to minimize the instalments I pay while avoiding penalties. Overpayment is effectively an interest free loan to the government and has an opportunity cost. Just try "withholding" it from them and find out the givernment's reaction to a loan in the other direction!

Meadbh is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 02:54 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: What are your taxes looking like?

We made some last minute (i.e. last week of December) moves to avoid AMT including big donations to charities. The consequence is that we overpaid our taxes and will use the overpayment towards 2007 taxes.
LOL! is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 03:41 PM   #9
Recycles dryer sheets
Life_is_Good's Avatar
 
Join Date: Mar 2007
Posts: 236
Re: What are your taxes looking like?

We just completed ours' yesterday using Turbo Tax Deluxe.

I knew this year would be very different from the past because it was the first full year we've been ER'd (meaning no W-2!). We Lived only off investment earnings and paid no taxes throughout the year on cap gains, divs, int, etc. We have no mortgage interest or enough other deductions so we used the "standard deduction". Truthfully, I was a bit scared to calculate the result

As it turns out, we owe just over 1 grand for both Fed and State combined. Not nearly as bad as I was expecting

While running through the Tax program, I came across a few issues that I would like to ask some of you who have been ER'd for a while.....

1) For one of my mutual fund redemptions, I was unable to obtain avg cost information from my brokerage. I've owned this fund for 15 years. It has been sold to 3 different brokerage houses over that time and has (of course) had many reinvested distributions - making a hand calculation very difficult. I suspect all the transaction history did not pass during one of the brokerage changes. What is the investor supposed to do when exact avg cost info does not seem to exist to calculate the cost basis?

2) For those of you living only off investment earnings, do you pay estimated quarterly taxes to Uncle Sam? It seems that most investors do not have taxes withheld from their distributions.

Much thanks in advance..... this forum is great for learning how to live in ER



Life_is_Good is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 03:57 PM   #10
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,337
Re: What are your taxes looking like?

Quote:
Originally Posted by Life_is_Good
1) For one of my mutual fund redemptions, I was unable to obtain avg cost information from my brokerage. I've owned this fund for 15 years. It has been sold to 3 different brokerage houses over that time and has (of course) had many reinvested distributions - making a hand calculation very difficult. I suspect all the transaction history did not pass during one of the brokerage changes. What is the investor supposed to do when exact avg cost info does not seem to exist to calculate the cost basis?

2) For those of you living only off investment earnings, do you pay estimated quarterly taxes to Uncle Sam? It seems that most investors do not have taxes withheld from their distributions.
1) This was a problem with my FIL's lack of record keeping. You need to do the best you can at estimating it. If you have old tax records you might be able to get the value and number of shares on specific dates. You might get lucky and find out what year you bought your original share. Whatever you find document. Do the best you can and support it as well as you can. Put the numbers on your return like you've just written the 5th gospel. If audited, show the numbers you got and how you got them with a straight face. Ask if they can see any way you could have gotten a more accurate number. Also, do it with a straight face.

2) Your best bet is with quarterly payments based on your expected taxable income from all sources. A key point to remember is that you will not incur interest and penalties if you (a) pay 100% of the tax due in the prior year (not the amount that you had to send in on April 15 but the entire amount of taxes calculated on the return) or (b) pay 80% of the tax due in the tax year in question.

For my FIL I'm sending in 100% of last years taxes due no matter what I estimate. The money isn't that much different and I'd rather not have to worry about it until I do his taxes.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 03:58 PM   #11
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 331
Re: What are your taxes looking like?

I ended up owing about $8k, mostly due to a a lot of contract work. I didn't pay any quarterly taxes last year though, which is why the bill came in so high.
NinjaPigeon is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-11-2007, 04:05 PM   #12
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 199
Re: What are your taxes looking like?

i don't even want to talk about it, my husband's job puts me in a much higher tax bracket. sucks.
newyorklady is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 12:23 PM   #13
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 22,973
Re: What are your taxes looking like?

I must write a check to the IRS for 0.6% of the total amount of taxes for the year. Pretty darn close.
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 12:46 PM   #14
Full time employment: Posting here.
shiny's Avatar
 
Join Date: Jun 2005
Posts: 673
Re: What are your taxes looking like?

Where's the choice for I'm paying an obscene amount
__________________
I'm made of atoms, you're made of atoms, and we're all in this together. Ben Lee
shiny is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 12:47 PM   #15
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: What are your taxes looking like?

Quote:
Originally Posted by newyorklady
i don't even want to talk about it, my husband's job puts me in a much higher tax bracket. sucks.
Higher bracket = More income

explain to me how that sucks?
saluki9 is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 12:49 PM   #16
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 897
Re: What are your taxes looking like?

Got $1,280 back from the Feds right away. I adjusted my withholdings, probably get $600 back next year -- can't quite get it fine tuned with my varying income.

Owe $16 to the State and have that to pay yet.

Quote:
Originally Posted by LOL!
<snip>
The consequence is that we overpaid our taxes and will use the overpayment towards 2007 taxes.
This has always confused me. You "screwed up" and gave them an interest-free loan for one year, and now you're going to extend that to two years?

I realize it was a last minute/not calculated thing, but, sheesh!

-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 01:05 PM   #17
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
Re: What are your taxes looking like?

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".
laurence is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 01:10 PM   #18
Thinks s/he gets paid by the post
Outtahere's Avatar
 
Join Date: Sep 2005
Posts: 1,677
Re: What are your taxes looking like?

I haven't had mine done yet but the CPA I use has been right on the money with what I need to pay in estimated taxes. Usually all I have to pay 4/15 is that QTs ET and I expect it to be the same since there wasn't a big increase in either my salary or business income last year.
__________________

Dogs aren't our whole lives, but they make our lives whole. - Roger Caras
Outtahere is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 01:16 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,396
Re: What are your taxes looking like?

As with many things in personal finance, one must consider behavioural finance issues in addition to simple mathematics. I agree that getting a refund means that you gave Uncle Sam an interest free loan. However, in my opinion, I rather get a small refund (say less than 1k) than have to write a check on April 15. This is because it is difficult or impossible to fine tune your withholding in advance down to the penny so that you pay exactly what you owe and no more. Therefore, despite best efforts, you will end up paying a small amount or getting a small refund, and I prefer to err on the side of getting a small refund. I am willing to give Uncle Sam the free use of a few hundred bucks for up to a year and forego the few dollars of interest I might otherwise earn to avoid having to write a check on April 15. The few dollars of interest that I forego pay for themselves in the peace of mind that I feel knowing that I don't have to budget for a tax payment in April.

This logic only applies if the withholding is fine tuned down to a small difference, say $1,000 or less. If you are getting a refund of many thousands of dollars, then you should take the time to fine tune your witholding down to as close to your true tax liability as possible, without going over.
JustCurious is offline   Reply With Quote
Re: What are your taxes looking like?
Old 03-12-2007, 02:08 PM   #20
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 897
Re: What are your taxes looking like?

Quote:
Originally Posted by JustCurious
As with many things in personal finance, one must consider behavioural finance issues in addition to simple mathematics. I agree that getting a refund means that you gave Uncle Sam an interest free loan. However, in my opinion, I rather get a small refund (say less than 1k) than have to write a check on April 15. This is because it is difficult or impossible to fine tune your withholding in advance down to the penny so that you pay exactly what you owe and no more. Therefore, despite best efforts, you will end up paying a small amount or getting a small refund, and I prefer to err on the side of getting a small refund. I am willing to give Uncle Sam the free use of a few hundred bucks for up to a year and forego the few dollars of interest I might otherwise earn to avoid having to write a check on April 15. The few dollars of interest that I forego pay for themselves in the peace of mind that I feel knowing that I don't have to budget for a tax payment in April.

This logic only applies if the withholding is fine tuned down to a small difference, say $1,000 or less. If you are getting a refund of many thousands of dollars, then you should take the time to fine tune your witholding down to as close to your true tax liability as possible, without going over.
Absolutely. Piece of mind and getting it "close" (like you said, less than $1k)

IRS Withholding Calculator. Hell, they'll help you get it "right"!

-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Prepaying real estate taxes for SEVERAL future years? MooreBonds FIRE and Money 16 01-25-2007 05:40 PM
Taxes tryan Other topics 0 12-08-2006 07:45 AM
Re-balancing & Taxes JJac FIRE and Money 7 11-27-2006 11:09 PM
Are You Still Paying Income Taxes? MetryOp Other topics 4 06-23-2005 11:06 AM
No Taxes or No SS - Which Would You Choose?? SDY888 FIRE and Money 49 12-15-2004 10:12 AM

» Quick Links

 
All times are GMT -6. The time now is 12:08 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.