2012 Income Tax Return Status: Refund Pending

It appears that the third try was the charm with filing my taxes this year!

Since I’m reasonably comfortable with the tax forms, having done my taxes myself on paper back when I just had a W-2, my first attempt was to use Free File Fillable Forms. It’s a service that is provided by the IRS for taxpayers of any income level and it is completely free. The catch was that there is no help whatsoever and I was getting XML parse errors when I tried to file my taxes. I tried quite a few things and eventually gave up on it.

My second try was with TurboTax. I’ve heard mostly good things about it from other people, so I thought I should give it a try. It was able to import my W-2 and my Vanguard forms, but not my RSU sales or any of my 1099-INTs or 1098s (mortgage interest). That wasn’t the end of the world since I didn’t have very many, but then I realized that I was too cheap to pay $30-50, so I gave up on it too. I was very close to just printing the forms out and paper filing again when Bichon Frise suggested I try TaxAct.com. Win! It was free AND there were no XML parse errors. I am so glad that I am finally done with this – I had originally started them back in early February and left them alone for a bit to breathe.

Last year, I used a CPA and decided to do them myself this year. How do I feel about that decision? I definitely think it was the right choice. I know enough about the tax code (and ended up using software in the end), that it actually cost me less time and money to do it myself, since I was double checking what the CPA did anyway since he/she didn’t necessarily know to file form 8606 (non-deductible Traditional IRA) and some others.

I was a bit cautious with my W-4 allowances after purchasing my condo last year, since I was unsure of how much I would end up actually itemizing. Back in November, I updated my calculations on how much income tax I owed for the year and realized that I’d already overpaid as of my November paycheck, meaning that I didn’t need to pay anything on my December paycheck and I adjusted my withholdings accordingly. Since I didn’t know I could itemize the origination fee I had paid on the purchase loan or the state income/sales tax, I had thought I wouldn’t itemize (or that it wouldn’t be worth much) for the 2012 tax year since the other items summed up to slightly above the $5,950 standard deduction for single filers. So my income tax refund, which I should hopefully receive by the end of March, is the tax savings from itemizing plus the approximately $400 that I had been expecting. A summary of what I ended up itemizing:

  1. Charitable donations (expected)
  2. Mortgage interest (expected)
  3. Origination fee on purchase loan (unexpected!)
  4. Real estate taxes (expected)
  5. Part of my vehicle tab renewal fee (unexpected, though < $100)
  6. State income or sales tax (unexpected!)

Now I have a better idea of what itemizing will look like for 2013. I’ll pay property taxes for the whole year instead of just half and I’ll pay a bit more in interest, but I don’t have the origination fee to itemize. So I expect that I will itemize about $1,000 more in 2013 than in 2012. I’ve set my W-4 with my employer to 2 allowances for now because my itemized deductions aren’t forecasted to surpass the standard deduction until I have paid my property taxes in full late in the year. At that point, I’ll calculate my remaining income tax to pay and adjust my W-4 allowances accordingly. I have developed a spreadsheet now, but if you’re looking to adjust your W-4 withholdings, I would suggest searching for “IRS Withholding Calculator” in your favorite search engine – it was quite helpful for me in the past.

What will I do with my refund? Exactly what I would have done with it had I had it earlier in the year – an extra payment on the mortgage.

Readers, how is your tax season going? Have you received your refund or filed yet?


16 thoughts on “2012 Income Tax Return Status: Refund Pending

  1. Glad taxact.com worked for you! My liability dropped significantly this year, meaning I overpaid since I wouldn’t have any “safe harbor” to protect me from short paying. So, I filed a month ago to get my cash back. I’ll have to file a 1040x b/c of a corrected 1099, but such is life. At least I have my moolah…!

  2. I haven’t done them yet, but it is on my list of things to do this coming week when I get home. I might have to try out taxact this year, I’ve been using TurboTax because I could get the free file due to my income and just the standard deduction, but I think I’ll have to pony up some extra cash this year since I have some stock sales. Nothing is that complicated this year and I could probably do it all by hand, but next year with the addition of ESPP share sales I’ll definitely be using either a CPA or the software.

    • I would consider taking the time to figure out how to do the ESPP sales yourself, just to know. Then again, I like to double-check the tax software myself :) Doing my RSU sales myself isn’t all that complicated since they’re just reported to me on a 1099.

      If you sell a lot of stocks and TurboTax lets you import from your brokerage, that might be worth paying for. Just make sure to click through on Vanguard or some other site that will give you a discount. I only had a few stock sales, so it wasn’t a big deal that they wouldn’t import.

  3. We’re having a CPA do ours again this year although the woman we used last year recently left so I’m feeling less confident in our choice this year. And I’m also not expecting a refund this year, but that’s fine.

    Nice work getting your taxes done. Although I guess it is March already! Ours will hopefully be done in the next week or two.

    • Yup almost mid-March, wow! I really don’t like the idea of going to a new CPA and having to explain things all over again. People are super awkward when they realize how old I am and how much money I make. That’s okay that you won’t be getting a refund – that’s better any way, so long as you have the cashflow to pay it :)

  4. I used TaxAct the past two years, and I paid $13 for both state and federal. Im so confused as to why people pay $50 for turbotax? How did you calculate your sales tax for deduction purposes? I never thought about doing that.

  5. We did ours last week, Turbo Tax, haven’t gotten the refund yet. I wasn’t expecting a refund, but I forgot we had a second dependent! So that was a pleasant surprise. (Didn’t forget that we had the baby, mind you… just forgot we didn’t have her yet last tax season.)

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