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Meh!

February 2nd, 2010 at 03:11 pm

This is kinda three posts all in one.

Taxes

We ended up getting $1938 back from Federal, $39 from Missouri, and $87 from California for a total of $2064. You can take the standard deduction and still get $1,000 more deducted for property taxes. Plus the $1,200 credit for our Roth.

Had I known about it sooner, we would have put more money into our Roth in order to get the full $2,000 possible. Live and learn. We'll do that for next year after the EF is finished.

I had my with-holdings set to only have $20 or so a month come out. My bonus gets taxed at 31% either way though, so they take $620 of $2000. I'll ask finance if there is a way to change this when I go adjust my with-holdings so I pay absolutely no federal tax.

Next year since standard deduction and personal exemption don't change, we will have $11,400 standard deduction + $1,000 for property taxes. Personal exemptions of $7,300. Comes out to deductions of $18,800. $34,000 - $18,800 = $15,200. So if you tax that at 10%, it's $1,520. Add in the $500 for the home buyer credit, and our tax liability will be $2,020.

Now add up the Making Work Pay credit and the Roth matching credit, you get $2,800. Subtract our tax liability, and you get a return of $780 even if we pay absolutely nothing in Federal or State taxes as long as we contribute at least $2,000 each into our Roths.

So it sounds like on Friday I will be making a trip to finance on post to have my with-holdings changed so I pay no federal income tax. It's not often you can say that neither yourself or your spouse will pay state or federal income taxes and still get a return.


Basement

I don't know what the basement will cost to have finished, but we'll take the $2,064 plus my $60 in Lowes gift cards from Christmas and give her the old college try. I think we'll come out right about spot on.

Floor tile: $75 for supplies. $250 for labor.

Carpet: Cost plus installation: $400.

Sink, toilet, mirror, and light: $600
Installation: Free (cousins a plumber)

Paint and trim: $250. Installation: DIY.

Doors: $500

We didn't budget for a tax return because I didn't think we would have one. Our EF will be done this year even without it. I didn't budget for my bonus in April either, which is good because now I can go to my sisters wedding in April, which will cost $500 to go to, and leave $1500 if I can adjust our with-holdings.

We would take the $1,500 left over and use $750 of that to furnish the basement, and the other $750 towards our Roths to be able to take advantage of the Roth credit on our taxes next year.


2010 Financial Goals

So my goals for 2010 should be done without a hitch.

1. $10,000 in big EF. We put $450 on the first and $385 on the fifteenth of every month. There was $450 to start the year from 2009. We should end 2010 with right around $10,500 in there when you figure in interest.

2. Finish and furnish basement. With our tax return, we should be able to finish it, and my bonus, furnish it.

3. Have enough in savings to pay for our costs for DW's transplant w.o a pay advance or using the EF. The other half of my bonus, plus cutting cable ($106/mo) and our house cleaner ($150/mo) for the time we'll be in Minnesota will be able to cover all of this. We should actually come out around $2,000 ahead after it's all said and done when you consider that we'll be cutting our home costs. That will also go towards our Roths.

4. Double contributions to Roths. We put $100 a month each into our Roths. Figure in the $750 from my bonus and $2,000 from savings when we go to Minnesota, and we should be able to more than make up an additional $2,400. It would be in lump sums as opposed to monthly allotments, but it still accomplishes the goal.

5. Purchase investment property. We close in a week or two on a 7.34 acre piece we bought for $12,500 plus roughly $600 in closing costs. We put it on a 5 year note. Don't know the rate yet - the real estate contract said 5% but the banker estimated 8%, so we'll have to wait and see. Either way, the intention is to pay it off over 18 months, not 5 years. It's as much to raise our credit scores with an installment loan as it is to have investment acreage.

6. Get promoted. Blasted points. I hate you points, all 798 of you. Just because my 620 doesn't measure up, doesn't mean you should win. Fall points, I beg of you. Let me make that extra $300 a month.

2 Responses to “Meh!”

  1. homebody Says:

    What kind of credit do you get for a ROTH? Is this a state credit?

  2. homebody Says:

    Aaahh, well that counts us out. Rats. But I will tell my children. Thanks for the info.

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