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Tuesday, February 21, 2012

The Tax Rollercoaster

2011 was a funny year for us- income wise. For my job, I'm considered an independent contractor. What this means, for those who don't know taxes, is that I collect and pay ALL of my taxes. No deductions from this girl's paycheck. Which, to some people, is a great thing. Except for when you do the taxes at the end of the year and have had nothing withheld, so you have to pay income tax and self-employment tax (basically social security and medicare).

Our solution has been that hubby withholds extra from his paycheck so we aren't stuck at the end of the year. This saves us from the mess of paying quarterly taxes.

But here's where the unusual part of the year comes in... not only did I get a pay increase (YAY!), but hubby finally got paid on a job that he did years ago (had to sue, we won, and the guy FINALLY paid), PLUS, he was able to get another side job that paid him quite a bit. So, lots of self employment income.

I've been working on our taxes... When I first put in hubby's W2, YAY! We were getting back over $5,000. Then I put in my income. Oops. We owed $2000. Then I put in part of my expenses. YAY! We only owe $10. Then I finished putting in my expenses, and even more YAY! We're getting back $1000. Then I put in half of our itemized deductions as well as our credits. More YAY! Now we're up to a $2000 refund again.

I should be happy, right? I went over to hubby's computer to peek at where he was at with getting his business expenses. I was hoping he'd do income first so I could slip it into my computer for a worst-case scenario, but no. He's doing expenses first.

So really, as much as I think I know (like maybe we won't have to pay through the nose this year), I actually know exactly nothing about what our tax picture looks like. Yet it won't stop me from getting excited as I finish the rest of our itemized deductions (still waiting on a couple of forms), or being depressed when I finally do put in hubby's self-employment income, then being happier when I put in his expenses.

How are you feeling about your taxes this year?


Carla said...

Done! We too have one of us with incomes where we have to pay all of the income tax...and we miscalculated on something. Between state and federal, we did okay.

Dh does ALL the taxes and had them ready before Feb. 1. ;) I was fuming at having to work on them on Dec. 31 though I'm happy now.

Danica/Dream said...

Carla, AWESOME!!!

The plan was to have them done early this year, but we got a little sidetracked. Hubby is almost done, though, and I think the last paper I need should be coming soon.