Fed Tax Refund ? ~ It's improving!

[DisneyMomma81]

So I'm working on my 1040 on Turbo Tax and I'm about done, well my refund is quite a bit less than years past. I made maybe $2K more this year than last. Any ideas as to why? I'm talking at least $3K less..... I don't mind as long as it's right ~ and one day I'm looking forward to perhaps owing money ~ that'll mean I'm making more $$$

See below for updates.

 

[MyDizneyBoyz]

Did you use TurboTax last year also? If so, you can do a side-by-side comparison between the two and you should see exactly where the difference lies.

Click on Federal Taxes tab, then Federal Review and towards the bottom it will have a link for the comparison between the two, as well as a quick link to "Not what you expected?" with some ideas to explain the difference.

 

[DisneyMomma81]

Did you use TurboTax last year also? If so, you can do a side-by-side comparison between the two and you should see exactly where the difference lies.

Click on Federal Taxes tab, then Federal Review and towards the bottom it will have a link for the comparison between the two, as well as a quick link to "Not what you expected?" with some ideas to explain the difference.

Nope ~ I had to paper file cause I got the new home buyer tax credit ~ and yes I subtracted that $8K from the difference between 2010 & 2009

I have a copy of my 2009 1040 somewhere *probably work - in my desk ~ I work for the IRS

 

[QVCshopper]

Last year, there was an extra "working" credit, but someone said they think we will still get it (good to know). Are you in the same tax bracket? Did you have the same withholding as last year? We're getting less as well, but we increased our withholding so we got a slightly bigger paycheck throughout the year.

In the future, you can use your 401k/403b to get into a lower tax bracket. We save our way into the 15% tax bracket, but it keeps the money in my pocket instead of the governments.

 

[auralia]

I did HR block and it said the 800$ tax credit was available this year too... hope it was right because the software told me to take it

 

[MyDizneyBoyz]

Did you itemize your deductions last year? One difference I noticed between our 2009 and 2010 returns (even though 2010 is still a work in process...) is that last year we had a deduction of $1,200 and change which fell under "Phaseout of Itemized Deductions". That same line item was $0 for this year. I don't know enough about taxes to explain it (which is why I love TurboTax!) but maybe something similar applies to you?

 

[dfchelbay]

Didn't we have less federal taxes taken out beginning in 2010. I forget the name of it when it happened, but you were to get about $24 more per pay period. That might be where some of the difference is coming from. You paid less in than the year before

 

[Mrs. Charming]

Last year, there was an extra "working" credit. We got $800 off the bat, and I don't think we're getting that this year. So, that could be a big chunk for you. Are you in the same tax bracket? Did you have the same withholding as last year? We're getting less as well, but we increased our withholding so we got a slightly bigger paycheck throughout the year.

In the future, you can use your 401k/403b to get into a lower tax bracket. We save our way into the 15% tax bracket, but it keeps the money in my pocket instead of the governments.

How does this work? Thanks!!

 

[QVCshopper]

How does this work? Thanks!!

It's easy. Just save into your retirement account. The amount you pay govt taxes on does not include the money you save into your 401k/403b. In other words, saving in these accounts reduces your taxable income. I've been doing it for years, very legal, it's an encouragement to save into those plans (same with traditional IRAs)--we put in $20K last year alone. Otherwise, I think we'd be in 1 if not 2 tax brackets higher. Of course, this isn't for everyone, especially if you need the money now.

 

[QVCshopper]

I did HR block and it said the 800$ tax credit was available this year too... hope it was right because the software told me to take it

That's great to know! I do my taxes by hand and the 1040 books aren't available yet. So, I didn't include it with my original estimate last night. It's hard to run your taxes with no instructions. Of course, I was just doing a ballpark figure. Now, I can hopefully count on $800 more...

 

[QVCshopper]

Didn't we have less federal taxes taken out beginning in 2010. I forget the name of it when it happened, but you were to get about $24 more per pay period. That might be where some of the difference is coming from. You paid less in than the year before

Yes, that does sound familiar!

 

[DisneyMomma81]

Well I've tweeked it a bit and it's gone up *and my amount due to UT has gone down ~ I was filing single so I changed to Head of Household ~ I was just claiming my kids for EIC *letting my ex claim them* but you know what, they are with me 95% of the time, I haven't had child support reevaluated and he makes a lot more than he did when we split 6 years ago. I will let him claim 1 kid *hey we have 2 and I can share but he doesn't need both ~ as I said earlier I look forward to the day I owe/get less, it'll mean I'm making more ~ he has a good income, so I don't see it as a bad thing that he owes more. Plus he and his 2nd ex wife chose to stay married till the end of the year *married in March of last year and split in Sept.* so they could file jointly - she has 2 kids herself. I've called and of course he didn't answer so I left a message saying "I'm claiming one, I hope you haven't already filed."

 

[DisneyMomma81]

In the future, you can use your 401k/403b to get into a lower tax bracket. We save our way into the 15% tax bracket, but it keeps the money in my pocket instead of the governments.

Yes indeed I put $$ into my 401k ~ $1304 for 2010

 

[IDoDis]

Last year, there was an extra "working" credit, but someone said they think we will still get it (good to know). Are you in the same tax bracket? Did you have the same withholding as last year? We're getting less as well, but we increased our withholding so we got a slightly bigger paycheck throughout the year.

In the future, you can use your 401k/403b to get into a lower tax bracket. We save our way into the 15% tax bracket, but it keeps the money in my pocket instead of the governments.

Keep in mind that you will have to pay taxes on this money someday when you've retired and are receiving monthly payments. If you are in the 15% tax bracket now because of your shelters, you probably will also be in that same tax bracket when you retire without shelters. The advantage is your money will hopefully grow (ours actually declined the last 2 years) over the long term as it should. The govt. will get its money from you eventually though.

 

[QVCshopper]

Keep in mind that you will have to pay taxes on this money someday when you've retired and are receiving monthly payments. If you are in the 15% tax bracket now because of your shelters, you probably will also be in that same tax bracket when you retire without shelters. The advantage is your money will hopefully grow (ours actually declined the last 2 years) over the long term as it should. The govt. will get its money from you eventually though.

Yes, I know, but I lose sight of this as I'm in my 30s and retirement seems so far off. Our plan is save a lot while young and let it grow over the years, letting it (hopefully) compound. I won't see this money (or pay the taxes) for probably another 25 years. If all goes well, maybe we can retire early...

 

[disneychrista]

I was just claiming my kids for EIC *letting my ex claim them*

What does your divorce decree say about this? If it doesn't say anything YOU get to claim them both if they life over 50% of the time.

 

[DisneyMomma81]

What does your divorce decree say about this? If it doesn't say anything YOU get to claim them both if they life over 50% of the time.

I'll look into it tomorrow, I have a copy in my desk drawer at work. Honestly they stay no more than 2 nights at his house a month.

 

[FINFAN]

Yes, I know, but I lose sight of this as I'm in my 30s and retirement seems so far off. Our plan is save a lot while young and let it grow over the years, letting it (hopefully) compound. I won't see this money (or pay the taxes) for probably another 25 years. If all goes well, maybe we can retire early...

keeping fingers crossed for you...we got hammered in '08, our savings, college savings..it's like we won the" never be able to live on what you make" lottery as we basically have to save/pay twice for it all to make up for what we lost at an older age.

 

[Mrs. Charming]

It's easy. Just save into your retirement account. The amount you pay govt taxes on does not include the money you save into your 401k/403b. In other words, saving in these accounts reduces your taxable income. I've been doing it for years, very legal, it's an encouragement to save into those plans (same with traditional IRAs)--we put in $20K last year alone. Otherwise, I think we'd be in 1 if not 2 tax brackets higher. Of course, this isn't for everyone, especially if you need the money now.

Good to know! Makes sense since the 401K is pre-tax.

 

[angierae]

I'll look into it tomorrow, I have a copy in my desk drawer at work. Honestly they stay no more than 2 nights at his house a month.

Yeah, check your divorce papers. Mine says my ex can claim my daughter every other year even though she only spends four days a month there. (4pm Friday to 6pm Sunday, two weekends a month.)

The divorce had drug out so long I didn't bother to fight it.