At one time in my past history, I use to love doing taxes! I would get refund back, so I actually was happy to do my taxes very early. Not anymore, this year will be the first year in a long time that I’ll actually own taxes…
Believe it or not, I would sometime actually started doing my taxes in December, 4+ months before they were due! I would plug in the income numbers that I though I made and do everything else while I waited for the various tax forms.
Once I got all of the tax forms that I expected, I would do a software update (just to make sure it has any last minutes updates), check over the amount expected. Back then, I would always get a tax refund which I loved!
Times Have Changed
This past year I bought and sold a lot of stocks that had appreciated nicely…. In fact too nicely! The combination of the realized capital gains on the selling of stocks, dividends from my dividend stocks, and the meager earnings from blogging, means that I’m now going to owe taxes this year.
Why did I get a Tax Refund?
Back when I had more expenses, we would take zero allowances on our W2 forms. Then we would scrap by during the year, and get a decent refund back at the end of the year. Both my wife and I have some Accounting skills, so we know that on the surface it seemed like a dumb, wasteful move. Why wasteful, you might ask? Because by overpaying, the government gets free money that it (in theory) can earn interest on.
We didn’t care though, because for us, we used it as a kind of forced saving account. Yes an odd, no interest paid savings account, but it was better than spending it, like we probably would have done. Besides, once we got those refunds back, occasionally we would used the money as contributions to our Roth IRAs.
Plan Going Forwards
Now that my stock transactions volume has increased and my taxes are becoming more complex, more than likely I’ll try Turbo Tax Deluxe before hiring an accountant. The software would be able to identify all of the 2011 Tax Changes and plus I can import my stocks transactions from my stock broker’s website.
What do you do to keep your taxes under control?
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