Yet another reminder that it never hurts (and often helps) to ask: By emailing a CPA one question, I lowered our federal taxes by $242.
My reading of the tax law said I couldn’t take a particular deduction. But I thought I’d ask because, uh, I wanted to save $250 less if I could. Turns out that I misunderstood the rules. And so we went from owing $125 to a refund of $122.
It doesn’t matter what the situation is. Unless someone is threatening physical harm (or, worse, financial penalties) if you ask even one more question, it really can’t hurt.
As of today, our taxes are sent. At some point in the next couple of months the IRS will deposit $122 into checking. At some point in the next 12 weeks, the state of Arizona will send us $490.
That’s 12 weeks instead of 10 days because I refuse to spend $15 to e-file. In my defense, I wouldn’t make $15 of interest in three months’ time. So it’s still financially prudent — even if it’s actually motivated purely by inherent stinginess.
Point being, we’ll get refunds from both sources. Those sums should nicely grow the Capital One account.
Granted, I don’t love the fact that I overpaid. There are only a couple of times it’s worthwhile to overpay taxes. But, given underpayment penalties, it feels smarter to just err on the side of caution.
This year’s numbers also give me a little better guidance on tax estimates for the coming year. I do okay for the federal ones, but I’m still pretty clueless when it comes to predicting state taxes.
For those of you who haven’t yet filed, please please please don’t forget to check out Free File.
If your adjusted gross income is $57,000 or less, you get to use tax preparation software for free. Companies that participate include H&R Block and Jackson Hewitt. Definitely worth looking into.
If your AGI is higher, the IRS still provides online forms to e-file for free. You have to be comfortable doing your taxes yourself, but most people’s are pretty simple.
I opted for the good ole paper version for reasons too complex to explain. Mainly, I’m a neurotic control freak. Oh, hey, that wasn’t complex at all!
The rest of you should be fine with free e-filing.
Now, there will be those of you whose AGI is over $57,00 and who feel the need for tax prep software.
Happy tax season, everybody!