It’s my favorite time of year!

No, not super bowl. Or winter. Or the new year. Or Christmas or Valentine’s Day or summer. It’s time to file my income tax return! And also to pick my health insurance options for the next year. I am pretty glad though that tax return filing and open enrollment happen when it’s not summer out and I want fun outdoor activities!

I’m still waiting on one last form to come in and then I’ll be done with my income tax return :) Last year, I fidgeted with FreeFileFillableForms.com and finally gave up on that in early March and tried TaxAct.com. It was magical. It didn’t cost ~$60 like TurboTax did – it was free. So this year I just rolled on over to TaxAct.com since I have most of my tax documents and it was pretty easy. Within an hour or two, I was pretty close to done. Despite the fact that I had two W-2s, three 1099-INTs, one 1099-DIV, one 1099-B, a 1098, property taxes, charitable donations, and the state sales/income tax deduction.

Oh, don’t you worry. I totally did my return on paper 4 weeks ago, before TaxAct.com was available. I will never stop doing my return on paper, even if I don’t paper file because e-file is magical. I underestimated a couple of deductions, but was otherwise pretty close to the TaxAct.com result. I had estimated I was going to get about a $200 refund and with TaxAct.com’s help, it’ll be just under $400, which will go directly to the mortgage.

What about 2014? I’m still unsure exactly what I’ll do for taxes in 2014. It all depends on what my bonuses end up looking like. I’ve set my W-4 allowances to 0. I’ll either make some estimated tax payments to offset the difference or increase my W-4 withholdings. I’m putting that decision off until at least when I get my first bonus though since I really won’t have a precise estimate of how much it will be until the day of. Making an estimated tax payment might be the easiest way to deal with this. What do other people with large bonuses do?

My employer made our insurance premiums marginally more expensive for the next year, but that’s okay. The premiums are still incredibly low. The deductible and out of pocket maximum are staying the same. I’m debating how much money to add to my HSA (Health Savings Account). Some of you might think this is dumb of me, but I see it somewhat as a glorified FSA (Flexible Spending Account) that I can roll over from year to year and employer to employer and that my employer puts some money into. Last year, I put the maximum in, which worked out to just over $200/month on my part. My goal is to have a full year’s deductible and out of pocket maximum in it at most, so I may only put $90/month into it this year. My employer will let me change that at any point in the year, so I’m not stuck with “only” a $90/month contribution. Plus, this will help in my quest to pay off the mortgage ASAP.

Happy tax fun everyone!

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41 thoughts on “It’s my favorite time of year!

  1. I used to love TaxAct, too! Though now that we have the rentals we hire a tax guy since the software didn’t seem to deal with that all that well.

    Have you considered treating your HSA as an investment account? We used to view Mr PoP’s HSA kindof like you do, but after we started maxing out 401Ks and IRAs, we decided that’s another place to get some tax-friendly investments, even if our choices are a little limited within his HSA plan. (We have his in an SP500 targeted mutual fund.)

    • Are you sure you can’t still use TaxAct? I had some complications my first couple years out of college (and most likely will forever), but now I just copy what the CPA did the first couple years.

      I have considered treating my HSA as an investment account, but I’m just not sure that’s the right decision for me at the moment. I’m also debating switching back to the medium deductible health insurance plan. My main goal with the high-deductible plan was to be able to pay for any possible health expenses pre-tax and I have enough left in my HSA to cover the medium deductible plan’s out of pocket maximum, so I may switch back to that plan for a year. I need to double-check that idea with my spreadsheets :)

  2. Leigh,
    I’ve been using and recommending Tax Act for years. It does the same thing as the bigger companies just way cheaper! I’ve written a few posts on this recently and taxes in general. I work in the industry so its not quite my favorite time of the year, but I do enjoy finishing my taxes and getting a small refund.
    -RBD

    • Glad to hear you like Tax Act as well! Someone recommended it to me last year. I was so happy to not pay TurboTax’s fee! I wonder though why TaxAct doesn’t charge much of a fee.

  3. Totally on board with TaxAct as well. I have been using it for six or seven years I think. As for POP having issues with the rental, I have reported rentals with TaxAct with no issues, so I’m not sure what might have happened is his situation. As someone who used to be in public accounting and file taxes for folks professionally, I absolutely think TaxAct more than meets the needs of 90-95% of the filing population.

  4. I have never done my taxes before, but I’m jumping in this year. It’s one of my goals for this weekend, to start fleshing out my return. I’m still waiting on all my forms though, so it will be a bit before I get them. I’m hoping for a massive tax return this year, so it’s going to be one of my favourite times of the year as well :)

    • I actually find it easiest to do my taxes if I already have all the data. That way, you don’t have to go back and redo sections. I usually do a draft before I have my actual tax forms and then do the actual return later. Good luck! :)

  5. I ended up going with turbo tax because of my rental property. It looks like TaxAct could have done the same thing for $50 less. Oh well.

    What was nice about TurboTax is that I could import my Vanguard 1099’s without manually doing the data entry. Not sure if that’s possible with the download version of TaxAct

    • I think that the deluxe version of TaxAct will auto import things. I don’t feel like paying for even that though haha. If I had a lot more transactions, then maybe I would.

  6. You are one of those rare people who love to do taxes, luck you! I regard it as a chore :)

    Out of curiosity, how much (%age wise) is the health insurance cost increasing by (total premium cost, not just the employee subsidized cost)? I have been hearing that several companies have raised their health insurance premiums this year.

    • I have no idea what my employer pays. But they haven’t raised employee rates in a while, I think. I would definitely understand if insurance companies are raising their rates! They have to pay for more stuff!

  7. I’ve been keeping this secret from all my friends in real life that I love doing my taxes. I kept checking my mailbox for all my forms over the past few weeks, and they’ve finally arrived. I just settled down with my computer, all my forms, and a mug of tea to start going through 2013 data. I love it, haha. I also use, Tax Act. I think they charge you like $12 to do both state and Federal, which seems like a seriously reasonable price to pay for all the double checking they do. $60 is crazy!

  8. as far as bonuses go, there was always enough withheld on mine. Maybe mine weren’t what you consider “large” though. :-D

    • Well so part of the problem is that they are withheld at only 25% for federal, but they should have 28% withheld. It wasn’t so bad when they were smaller, but that 3% difference is becoming more of a concern as they get larger.

  9. This is great- I think we’re going to file our own taxes this year and I was planning on just using Turbo tax as we’ve done in the past. Thanks for the Tax Act tip!

  10. ARGH. Etrade isn’t putting out the 1099s until Feb 18th. :( I really need to consolidate all our damn assets. Plus I learned a new term (the hard way): escheatment. And one of my mutual funds did a whole bunch of selling for reasons I do not understand and didn’t notice… so I guess this is the year I finally get rid of America Century Trust. More Vanguard index funds!

    • Yay more Vanguard! That is lame about ETrade:( Wait, how did you find out that your mutual fund did that?

      P.S. I think it was from you guys I found the book “Help! My apartment has a kitchen!” I got it for Christmas and it has been really awesome :)

      • Ugh, it looks like it really did just sell a bunch of stuff. And they reinvested it. I hate mutual funds.

        I should have used this fund when we were donating my dad’s money to the school these past couple years. I’m sooo tempted to just sell the whole thing and deal with the cost-basis and capital gains. But it’s kind of a lot of money (41K)… still, one of these days capital gains are going to be taxed at income tax rates. I’d be happy if I could find a way to undrip this so I could bleed the fund dry if I’m going to have to be paying taxes anyway (the undrip option is greyed out and says it’s unavailable for this fund). Have I mentioned that I hate mutual funds?

        This is why I hate doing taxes– all these stupid complicated unexpected investment tax things from when my father was in charge of my investments. Over Christmas he’s all like, are you interested in taking over my investments since I’m getting old and don’t want to keep track anymore, and I’m like, I would sell them all and put them into a Vanguard broad market index (since he doesn’t want a bond-mix). He said no.

        • Wow, that sounds terrible. I’m so glad my parents were never in charge of my money really. Some of my friends had their parents using them as tax shelters and stuff and their tax returns turned out to be super complicated when they finally took over…

          Maybe instead of selling all 41k at once, you could sell 10k/year for a few years or if there is a huge dip in the market, then sell since the value would be lower (less taxes)? With a 1% expense ratio, it might make sense to take the bite off the taxes at some point…

          Wait, why doesn’t he want to use Vanguard???

      • I should have gone on sabbatical when DH was unemployed then sold every single penny and moved everything to vanguard. But I don’t see us at the 15% marginal rate any time soon. I sure would love me some 0% capital gains taxes though.

      • Hm, the internet says that I only have to pay those capital gains once, so I get that money back if I sell the entire mutual fund because I’ve already paid those taxes. So that’s not so bad. Yay internet. (Still, this thing has a 1% expense ratio, so I really should dump it one of these years.)

        • Yeah 0% capital gains taxes would be pretty sweet. Especially since that’s on dividends too. Going on sabbatical while your DH was also unemployed would have been a bit extreme though just to save money on taxes :P You might have lost out on more income than you saved in taxes!

          Yay internet indeed!

  11. I’m still waiting for a 1099 from Sharebuilder. I hate that some of these companies take so long. I guess it was worth the free $200 I got for investing 10k there for 6 months though

    • That’s annoying. Probably worth it :) I’m still pretty amused by the $275 I got for putting $300 in a Chase savings account for 6 months haha.

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