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...and I learned a few things that I had assumed wrong.
One example. My DH couldn't figure out why I spent so many hours doing Fed and State taxes. I told him that I had to update our Excel file of YTD investments/CD's first and then try to forecast how much dividends/interest we'll earn by the year end. Then do the same with our paycheck stubs and then do taxes. He still didn't understand. Then I questioned him a little bit. And...I came to undersand that my DH thought all this time that since we reinvest all the dividends/cap.gains we don't need to pay taxes now. Duh...
no wonder who makes investment/saving decisions and taxes in our family 
. I should charge him a penalty for this ...kidding.
Another example...having a second child. This was my wrong assumption.
When your AGI is above $110k, you have to fill out a different sheet to learn whether you qualify a Child Tax Credit.
Let's say we've got close to $120k AGI. Since we had one child for 2 years, in my mind I thought that for 2008 we'd qualify for the total $1000 = $500/child (prorated due to our AGI) *2.
Nope, I was pleasanty surprised, I was wrong when I completed the sheet again.
Now we'll have 2 kids * $1k/child = $2k max credit for 2008 and our AGI is $10k above $110k threshold * 5% = $500 (prorated). So, we'll qualify for $1,500 child credit for 2008. A mistake of $500 on my part.
And finally I think that probably we're better off to pay our mortgage off early like I said on another thread. By my calculations, we pay $1 in interest to save $0.25 in taxes. Like I said on that thread, if everything goes well as planned we'll pay in stages and be done within one year and then replenish our savings + add more to taxable investments. It's more emotional than financial and also less work during the tax season (no need to file Schedule A).
After everything was done, I went on DH's co. benefits page to amend payroll deductions. Before we had ZERO exemptions for Federal + $200 Addn'l taxes. If I didn't change we'd get more than $4,000 refund. So, now no more additional tax w/h + 3 exemptions. To be honest, I don't know how much exemptions affect tax w/h. I'll learn in 2 or 4 weeks.
One example. My DH couldn't figure out why I spent so many hours doing Fed and State taxes. I told him that I had to update our Excel file of YTD investments/CD's first and then try to forecast how much dividends/interest we'll earn by the year end. Then do the same with our paycheck stubs and then do taxes. He still didn't understand. Then I questioned him a little bit. And...I came to undersand that my DH thought all this time that since we reinvest all the dividends/cap.gains we don't need to pay taxes now. Duh...
no wonder who makes investment/saving decisions and taxes in our family . I should charge him a penalty for this ...kidding.Another example...having a second child. This was my wrong assumption.
When your AGI is above $110k, you have to fill out a different sheet to learn whether you qualify a Child Tax Credit.
Let's say we've got close to $120k AGI. Since we had one child for 2 years, in my mind I thought that for 2008 we'd qualify for the total $1000 = $500/child (prorated due to our AGI) *2.
Nope, I was pleasanty surprised, I was wrong when I completed the sheet again.
Now we'll have 2 kids * $1k/child = $2k max credit for 2008 and our AGI is $10k above $110k threshold * 5% = $500 (prorated). So, we'll qualify for $1,500 child credit for 2008. A mistake of $500
on my part.And finally I think that probably we're better off to pay our mortgage off early like I said on another thread. By my calculations, we pay $1 in interest to save $0.25 in taxes. Like I said on that thread, if everything goes well as planned we'll pay in stages and be done within one year and then replenish our savings + add more to taxable investments. It's more emotional than financial and also less work during the tax season (no need to file Schedule A).
After everything was done, I went on DH's co. benefits page to amend payroll deductions. Before we had ZERO exemptions for Federal + $200 Addn'l taxes. If I didn't change we'd get more than $4,000 refund. So, now no more additional tax w/h + 3 exemptions. To be honest, I don't know how much exemptions affect tax w/h. I'll learn in 2 or 4 weeks.
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