Medicated Money

Monday, March 06, 2006

Here Comes The Taxman

But in this world nothing can be said to be certain, except death and taxes. -Benjamin Franklin

I finished the taxes this weekend, and all I can say is that Uncle Sam definitely loves us. But the good news is that I am getting a refund of $2500! I know, I know...it's a free interest loan to Uncle Sam. That's why I said that he definitely loves my wife and I. Number 1 agenda of this week is to march into the HR department and change our W-2 form. The IRS Calculator, that will help you figure out your withholdings, has been used and I hope to say goodbye to that interest free loan I give my favorite Uncle each year!

The second item of discussion revolving around our taxes is to try to lower them. I used Turbo Tax to help with the taxes due our recently change in marital status. Looks like the IRS does not care when in the year you were married, they count it as the entire year. Every question Turbo Tax ask regarding lower your taxes, we either did not participate in or were ineligible. But this year is going to be different. Here is a list of deductions that we did not take advantage of last year, but will plan for this year.

-403(b)
-Roth IRA - if we can lower our AGI enough
-Charity Donations

Unfortunately, 2 of the biggest deductions for taxes we do not and/or cannot take advantage of are:

-Student Loan Interest
-Home Ownership

We are in too high of a AGI for the student loan deductions, and our living situation is such that we do not want to buy a house in a location where we may not be here in the short-term future due to our careers and family in the northeast US. I have been reading many articles about lower one's taxes and if you, our readers, can offer any advice, it will be gladly accepted.

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