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The First Part of the Taxes is Done…

Wow. So far, I am a big fan of Tax Cut. I was able to set it up and enter the 4 W-2s we do have within a half hour. It was so easy, no adding up totals or anything like that. No practice form…just check each box and copy in the number.

The best news is that it currently shows $1200 due in Federal refund (we both opted for conservative withholding since we didn’t know what getting married would bring). And that’s without the last W-2.

Where is this going?

Straight to the car! In fact, since we should be getting the rebate as well as the refund…we may make HUGE progress on the car payoff. Yay!

Depending on how much we end up with, I’ve thought of a few other things (I didn’t expect over $1000). First, it would be nice to try eating out once. We don’t do that much and DC has a lot of fine restaurants. I’m not thinking anything crazy, but Clever Dude was telling me about this great Ethiopian place I’d like to try.

Second, we might put a little of it into the Roth IRA. That’s sort-of stimulating the economy, since it’s investing in companies, right?

At our age, the power of compounding is pretty strong, so I don’t want to neglect it while we pay down the debt monster. As paidtwice said this week, if you save $2000/year through your twenties and stop when you’re 30, the money will compound to more than if you start saving $2000/year when you’re 30. I’m 22. That’s good.

And in other tax news, Hank wants to know what you’re doing with your tax refund. He has some prizes which may interest users of Entrecard, Amazon, and those hoping to do their taxes at the last minute. πŸ˜‰


{ 8 comments… read them below or add one }

Mom@wide open wallet March 27, 2008 at 11:20 pm

Well congrats on getting some unexpected money. very cool!

Dad March 28, 2008 at 12:59 am

I’ve been a fan of Tax Cut for several years now. Glad it works for you!

Mark March 28, 2008 at 3:42 am

My wife and I have taken a big advantage of Tax Cut this year.The name of our Tax Cut software was “Turbo Tax” We got back $3,700 federal and $941 State. You know what? Come to think of it, We have yet to recieve our thank you letter in the mail from your Uncle and mine. hmmm. Maybe it will come tommorow. Since we aren’t anticipating that letter. My wife has already sent in motion the plan that will discontinue allowing our Uncle the abiltiy to use our money interest free. We believe we can spend it better to manage our household expenses in the coming year. I’m justa saying!

deepali March 28, 2008 at 6:39 am

Yum, Ethiopian. I say go for it. I live in Little Ethiopia, and I can recommend some very good (and inexpensive) places. You won’t have to feel guilty about the $20 splurge (even more so since the cheap spots are better than the expensive ones!).

And my second vote is the Roth. πŸ™‚

ms. m&p March 28, 2008 at 11:57 am

I think treating yourselves to dinner is a great idea. There are so many good restaurants in the area. I also support the Roth. If you can afford to part with the cash, Roths seem to be the supported by the consensus.

Do you mind sharing what your withholding was for 2007 and what you think it will be for 2008? I’m still trying to figure it out. The calculators tell me 5, but that seems awfully high.

Fabulously Broke March 28, 2008 at 11:58 am

I love tax softwares now. It’s much easier to do them. Either that, or use an accountant, but tax softwares are cheaper… I’d prefer to buy the software and save it, over doing it online because you can’t really fix things online and/or you’re not careful in entering numbers vs. a software and taking 2 weeks to really make sure it’s OK

mrsmicah March 28, 2008 at 12:28 pm

@deepali, I’ll definitely get your opinion before we go out. πŸ™‚

@ Ms. M&P…I don’t remember offhand. I asked the HR rep what the conservative option would be and worked with her recommendation.

@FB. Exactly! I’ve got a nice saved file on my computer while I await the final W-2.

Pamela March 28, 2008 at 5:47 pm

I’ve used the free online tax programs to file federal taxes the last couple years and I really like them (save for a few miscellaneous issues). I haven’t liked them nearly as well for state taxes, and just do those on my own. I end up calculating deductions and credits that our state tax booklet mentions but the program misses. This year, thanks to the tax program I’m using, I discovered that not only can we get credit for any out-of-pocket money we paid towards my schooling, we can also get credit for the student loans we’ve taken out. Getting that credit took our tax bill from owing about $1500 to getting a $100-something refund! So for you students – check the credits and deductions you can take for school-related expenses (including loans taken out).

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