Friday, February 8, 2013
Tackling our Taxes
I know that most PF bloggers out there don't pay to get their taxes done, but we pay for turbo tax. Why? Because i have an account with Vanguard so its a bit cheaper to do it through Turbo tax because they have an advertising deal (we paid $56.98 for our Federal and State returns together) and I feel I understand the program enough to use it... where I don't with the paper forms. For some reason my state return is always wayyyyyyy off if I don't do the state return with my federal return because I miss things I can deduct so for us, its worth the $50 or $60 we pay to use the software.
Despite the fact that we have a mortgage and now make charitable contributions to our church, for 2012 we ended up taking the standard deduction again because we saved more money doing that... but of course that doesn't mean that I didn't write in all our deductions into turbo tax just to double check. *wink*
I have to say I was a little worried while we were adding everything up for our wood turning business because I knew our expenses were more than our income and I wanted to make sure we had all our receipts for the business printed and saved in case we get audited... but other than that, it wasn't bad at all.
I broke it up over a few days, entering information as we got everything squared away. I think i'11 be more prepared for next year now that I've gone through the process with our business once.
Either way, my husband truly loves me every time I do the "scary adult things" like taxes and our finances.
I'm just bummed that every year I think i'll get more out of the savers credit then we actually end up getting (again, $200 this year instead of the $1,000 I thought it would muster???)... but hey, if the government thinks i'm too poor to save for retirement and wants to thank me for being responsible, so be it. If SCB gets a real job in 2013, I think our income will prevent us from qualifying so its best to just smile and take what we can get.
So on to our numbers:
Adjusted Gross Income $ 41,506.00
Federal Taxable Income $ 22,006.00
Effective Tax Rate 5.38%
Taxable Income $ 29,784.00
Effective Tax Rate 0.61%
We should be getting $1,200 back between both our State and Federal return... so that should really help us with some of our goals once we get the money direct deposited into our accounts.
I know its bad to get a tax return because your giving the government an interest free loan, but with SCB having unemployment and a few other smaller gigs, we just weren't sure how things would pan out so we left everything the way it was last year just to make sure we weren't going to owe money... especially with the business and having to pay self employment taxes and the like.