Journal TykeClone's Journal: 2005 Tax Year review
- If you live in Iowa, check your withholding. It's rarely "right on" in the best of circumstances, but in July of last year the state treasurer adjusted the withholding tables to "allow you to keep more of your money." I guess that was meant until taxes were due.
- Check your W-2's when you receive them - make sure that they are sane. I saw a couple this year where the state wages reported were much different than the federal wages. There may be a good reason for it, but make sure that there is! The state deparment of revenue has just about as good of a sense of humor as the IRS.
- If you need to replace a furnace or a hot water heater (or a couple of other of those kinds of appliances), 2006 is a good year to do it as there is a tax credit available for that. Double check that the model that you're looking at is eligble though!
- If you're in college and you have a choice between a job in your home state and one in another state, choose the job in your home state if all other things are equal. If you have income in more than one state, you'll likely have to file returns in more than one state.
- If you need to ask your tax preparer how to get "more of a refund" next year - don't. Unless your situation changes (by having a kid or by getting married), your taxes (and therefore your refunds) will not change substantially from year to year. When someone asks me that, I tell them to either do estimates or withhold more.
- The child tax credit is a very nice bone to throw to parents. But it sucks that it gets turned off at 17 (when kids are getting ready to go to college). And it sucks that it doesn't offset self employment income.
- If you are earning a small amount, look into investing in a 401k (if available) or an IRA. There is a retirement tax credit available to "low income earners" that actually goes to a pretty good income for married people. If you are close to the border line and can afford it, you can put some money into a traditional IRA which can reduce your income to the point where you can get that credit.
- HSA's (Health Savings Accounts) are a very nice idea - but poorly implemented. They should be available to everyone (no matter what your insurance status is). I did one return this year where the taxpayer had an HSA as a benefit (as opposed to a more normal insurance), but the tax forms that we needed to complete the return were not ready until well into February (good job IRS).
2005 Tax Year review More Login
2005 Tax Year review
Slashdot Top Deals