You're doing it wrong!!

So I've been told that if you are doing your taxes correctly you should actually owe the government money at the end of the year instead of getting money back. This way you are not giving the government a 0% interest loan. In the case of owing money come tax time that means you have gotten a 0% interest loan (that is if you believe that the amount of taxes you are paying is fair, but that's a whole other topic in itself).
 
This year when I did my taxes I came back with the following results:
 
Tax Refund
 
Ugh!
 
If this is right, how come it feels so wrong?!?!


This is the first year that I have done my taxes "correctly" and actually owed the government money. I actually don't think this is quite "correct" since I believe I'm on the verge of the underpayment penalty, so I will have to make some adjustments this coming year so I don't accidentally get hit with the penalty next year.
 
For some reason I feel like I'm in one of the worst spots to be in as far as taxes go. I don't make little enough to qualify for any real tax breaks, but I don't make enough where I'm raking it all in either. For example, this year I bought a new computer directly to use for work. I figured, hey I can write this off as a deduction for my taxes. But when plugged it into turbotax this year it told me that work related deductions have to be over 2% of your income to be qualified for a deduction.. and I didn't buy that expensive of a computer. Someone also suggested to me that I should write off my bus passes since that is work related. But I can't do that either because that comes straight out of my paycheck pretax anyways.
 
It always seems like the deductions are set just enough that you never qualify for them. You can even write off your tax preparation fees, and every year I put in the $50 or whatever turbotax costs that year into the software and it's not a high enough amount to qualify since the limit is somewhere around $200... Too bad I can't say that it took me X hours to complete my taxes and my time is worth Y amount. Then I might start to get some of these write offs.
 
Does anyone else feel like they never qualify for any write offs? How do you feel about your taxes this year? Do you get a refund? If you do have you considered changing your withholdings so that you get more back throughout the year? If you don't get a refund, how do you feel about owing more money come tax season?
 

1 comment:

  1. You were a little underwithheld for the year. Adjust your W-4 and move on. You're doing it right to try to end up near break even. I got a $900 refund this year, a little too much - I might increase my withholding exemptions on W-4 from 2 to 3.

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