Tax Time 2018

We finished our tax returns just in time for the government to re-open temporarily ... and as I mentioned in our REI post, got our funds already!

When I was fiddling with Turbo Tax, I found out a few cute tidbits reading through our reviews to check them.

We made more money than we did last year! $14.408 more (WOOHOO bigger profit share checks and raises and OVERTIME!)

We apparently withheld MORE money from our paychecks this year than last year (Likely due to the higher profit share check, because our individual paychecks got bigger after the tax changes, not smaller).

We are also getting a $2,000 child tax credit instead of $1,000 due to the tax changes.

And as I mentioned earlier, we are taking the standard deduction federally, and itemizing for the state.

As for the state, apparently Hubs and I made $115 more than the limit for being able to get the California credit for child and dependent care expenses... so even though we paid almost 10% of our income towards daycare, we don't get a credit...

and that kind of blows.

• We could blame our savings account interest... (we keep 6-months of bare bones expenses liquid in a savings account, and that savings account earned over $115 in interest over the course of the year)... So we could look at it as our being smart, cost us a deduction...
• Or we could blame the temporary job promotion I had at the end of the year for 7 weeks while a co-worker was on leave...
• Or a couple hours of overtime for hubs at work... 

but either way, it ended up costing us this credit... and this credit would have been for $1,020..... Okay, now I will breathe and let it go... and no longer dwell on it.... But I had to put it out there once just to get it off my chest.

All in all, we are getting a nice return of  $4,300.00 when we combine our state and federal returns.

You might be like, why give the government a free loan? We don't plan to. We have our deductions set to give us about a $1000 buffer, because our goal is NOT to owe. However, Profit share bonuses from Hub's work can range significantly from year to year, and they hold 50% of it for taxes... so this is like getting his profit share check returned.

Yes it sits with the government for the year interest free, but it would be a LOT harder to adjust our withholding and re-balance our budgets every year to try and guess what the check will be before we get it... and we risk the chance of lifestyle inflation as our paychecks increase and suddenly finding that we "need" profit share to pay the bills, which is not how we want to live and make financial decisions.

So instead, we get a tax return.

Our Effective tax rate for federal was 6.20%... and our effective tax rate for California was 1.90%. Last year our federal rate was 6.32% and our state was 1.23%

What do we plan to do with our return?

The same boring things we did last year!

• Replenish our travel account, and stick the money in savings until profit share, when we hope to top off our emergency fund to bring it to a full 6-months of expenses based off our bare bones budget. We haven't adjusted for inflation for a while and since we are spending down some of our savings for the home remodel, etc. it's time to see how much more we need to add to this account.

After that, its slush fund, and well pull from it though out the year for car repairs and other larger purchases.