It’s Tax Time!

As everyone knows, tax time is my favorite time of year! I’m using TaxAct again and I’ve been anxiously awaiting all of my tax forms. I have a checklist of all the forms I need and in my income taxes folder for 2014, I have text files with filenames saying things like “Need HSA Bank.txt” and “Need 1099-B.txt”. Before we left for New Zealand, I had: two 1099-INTs, my one W-2, my 1098, my 1099-R for my Backdoor Roth IRA, and 75% of my charitable donation receipts. I made a donation in January of last year and they still hadn’t sent my receipt! I was still waiting on my HSA form and my 1099-B for my RSUs.

I always make a “W-2 Estimate” spreadsheet in which I estimate my W-2 numbers based on my last paycheck. In another worksheet, I estimate how much of my Vanguard Total International Stock Index Fund’s dividends were qualified/ordinary and how much of a foreign tax credit I should get, based on the 2013 numbers. I was spot on with my W-2 estimates this year and only off by a dollar on my qualified dividends estimate.

Usually I wait to do my taxes until I have all of my forms, but this year, I decided to start on TaxAct and then stop at any point that I needed a form I didn’t have yet. It’s kind of fun this way and means that I only spend ~5-10 minutes at a time entering my taxes. Since I haven’t entered any of my deductions yet, it still thinks I owe taxes. It’s so fun watching the refund/owing amount change as I enter new numbers!

The last two forms came in while we were gone, so I filed my taxes last week! My refund was the exact $ amount that my tax spreadsheet had calculated :) I have a spreadsheet in which I input all of my paychecks, deductions, bonuses, interest income, dividend income, capital losses and gains, and an estimate of the foreign tax credit. I then use those numbers to calculate based on the marginal tax brackets, ordinary vs qualified dividends, etc. how much income tax I’ll need to pay that year vs how much my employer will withhold and I use it to set my allowances throughout the year.

I expect to get a larger refund than usual. Normally, I update my allowances on my December paycheck to plan on getting ~$50 of a refund, but since I was unsure of how much I was going to get paid in December until just before Christmas, I couldn’t do that. Oh well. I’ll get the money back soon and it’s “only” around $1,000, which will help with the negative cash flow for February pay/March spending. I’m looking forward to saving again instead of living paycheck to paycheck! That should happen with my March paycheck, so only one more month to go…

Readers, are you getting ready to file your taxes?

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19 thoughts on “It’s Tax Time!

  1. I filed my taxes a month ago but then just yesterday got my 1099-DIV for my brokerage account (which, for some reason I totally spaced on having since I’d already gotten my 1099-B for the same account). So now I get to refile. Whee!

  2. I have been doing the same thing working on my taxes little by little as the different forms trickle in. Believe it or not, but I just got a few more tax forms in the mail today. I am probably about 90% complete with my taxes and will look to finish them up this weekend. It is always fun to see the taxes owed tick lower as deductions are input to offset income. My wife almost had an heart attack when she walked in on my starting our taxes a few weeks ago and saw that Tax Slayer was flashing up around $10,000 owed in taxes.

    She has calmed down a bit now that the taxes owed are around $2,700. I have a little more work to do, but I don’t think I will do much better than writing a check for around $2,700, because the remaining income and deductions I have will largely offset each other.

    I would much rather owe than get a refund. Sounds like you typically optimize your taxes for the same, with the excretion of the uncertainty you had this last year. I usually adjust my withholding’s to be pretty close to zero as well, but had some unexpected income in December that was embraced with open arms but also through my perfect plan out the window.

    Cheers!

    • I usually try to optimize it so that I get a refund of around $100. I don’t want to owe because if you end up owing too much, then there are penalties, so I’d rather get a small refund.

  3. We just got our last Vanguard form in the mail yesterday, so we’ll file soon. We’re using TurboTax again this year but next year I may look at taxact- I know it’s cheaper and I hear more and more good things.

    • Same here on the late Vanguard forms… Just received mine electronically today and that was the last piece of the puzzle for me… I had a lot of life changes last year which brought about many deductions…. It’s nice that I am getting so much back well over $10K however, that means I need to refigure my withholding exemptions which I already did in January when I ran the number for a ball park estimate.

      I’m a fan of turbotax… I’ve used it every year since 2002 and have a great history with them and all my records established there..

      Does taxact have significantly better options and user interface?? Just wondering what makes it better than any of the rest of them..?

      • TaxAct is much cheaper ;) The federal filing is free and state is $14.99. You have to do manual input of everything though. TurboTax easily becomes quite expensive when you have to pay for the Premier for stock sales and such.

        • I’ve never paid with turbotax to file my state taxes. Granted I’ve had to print out the froms and mail it in but that’s the easy part.

          $15 for tax act is pretty inexpensive but I haven’t had to pay all that much for turbotax either I guess. I’ve never paid retail for it as there always deals on getting it.

    • That’s annoying! I got my last form in early February. Do you not get your Vanguard forms online? Sometimes you get them earlier online than by mail. TaxAct is cheaper, but TurboTax magically imports from all sorts of places. TaxAct doesn’t import from as many places, so you have to do a bit more work, which I’m fine with doing to save the $!

  4. I need to start coming up with a list of all the forms I need. Guess that’s a project for this afternoon. I expect to get a larger refund this tax season because last year was a big year of changes. Full year of property tax/mortgage interest and we welcomed our son in November. Hopefully 2015 will be a smaller refund year. No sense in giving interest free loans to the government.

    • Congratulations on the new tax deduction! It definitely sounds like had a full 2014. I like to make the list of forms to expect throughout the year when I do something that would generate one. So when I start a new job, it gets added to the list. When I churn a bank account, that gets added to the list. That way, I know exactly what to expect come January!

  5. I have already filed and gotten the refund from the federal. I am just waiting on the refund from the state. Yay!

  6. I used TaxAct instead of Turbo Tax this year since it is cheaper. I usually pay to file the federal return through their system and then just do my state returns on the states’ websites for free. TaxAct was less user friendly than Turbo Tax, but since I’m a 1040 pro I have a excel schedule like you and knew about what my numbers were going to be (I wasn’t spot on like you). Hope you enjoyed New Zealand!

    • Oh that’s a neat idea! I don’t think I noticed that TaxAct is less user friendly than TurboTax, but that seems quite possible. Thanks- I did quite enjoy New Zealand!

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