tax blah

[mellowtigger]

I just completed my taxes. I was unimaginative and did exactly the same process as last year, using TurboTax to file the documentation for federal, Minnesota, and Pennsylvania taxes. I sifted through many old envelopes but didn't find anything that wasn't already in the online records with the tax website. I even checked if I needed to report a generous gift from my parents early last year. (The IRS site said that I did not.) TurboTax cost me about $200. It's not how I want to do this process, but I figured I should avoid any novel behavior if it could draw attention from the IRS as Trump crushes the group that audits rich people... leaving them to audit whom exactly? Yeah, it's a mystery.

In addition, I owed almost $300 in Minnesota taxes, and I got zero back from the federal government. This status confuses me. I have my employer deduct the usual maximum amount from every paycheck, so I never have to pay money unexpectedly later. I always get a federal refund, and I never owe more tax. What happened this year, and why am I paying more in taxes than usual?

I don't have the mental bandwidth to do my usual breakdown in a convenient table like in years past. (Ugh, this job taxes my mental stamina.) Maybe eventually, since I expect my taxes to go up even more, now that Trump is in office. Yes, I know, he promises people will pay lower taxes, but I expect that offer to be invalid for poor people... just like happened to me during the previous Trump years (2017-2021).

Now, I need an Advil. I have a headache.

Comments

[threemeninaboat]

Dude, I owed an extra 6k Federal this year.

[mellowtigger]

Yikes! That whole "withholding" form when starting a new job is always a bit confusing. I learned decades to ago to never pick any extra "allowances", I think they are called? I wanted the government to take all the money it wanted from every paycheck, so I'd never have to deal with the surprise of owing money later in the year. I had a year or two long ago when the government wanted money that I couldn't easily find. Not fun. My refund for 2023 was $600 federal and $400 state. This year, without changing my withholding, the balance is off. Their recurring withdrawal from my paycheck did not leave me the usual refund this year.

I might have to deliberately add some extra withholding onto the recurring paycheck, so the government keeps more of my day-to-day money. I don't know if that tactic could help you avoid tax day surprises too? I never do anything complicated like stocks, cryptocurrency, or other business stuff, which I'm sure makes for more volatile predictions for end-of-year balances.

[threemeninaboat]

I am my own business so I have to estimate how much am I going to make and then that gets deducted quarterly.
I never know how much I'm going to make so the number is never accurate.