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?