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Refi Progress & Taxes

January 24th, 2012 at 02:50 pm

I think I am still in utter shock with this 4% refi. Like, I won't believe it until I see it.

But excitement factor is starting to increase as we near our lock deadline.

Plus, I heard from the CU. They wanted a copy of our HOA bill. So far - still very EASY stuff. Will see...


I took the time to finish up our taxes, after all. I have had everything I needed to finish since about 12/30. Our taxes are pretty darn simple.

When I had grabbed my medical expenses to estimate I must have looked at the wrong number. Was about $1000 higher than I had estimated. SO, I Was able to change our ROTH/Traditional IRA contributions from 75/25 to 80/20. Bigger refund from state (almost $70?) but net is still about $500 due in the end, as expected. I expect to do 100% ROTHs in 2012, but with the cash outflow of the refinance, I didn't really feel like giving the IRS another $400 or so, this April. I have a lifelong habit of making this decision about every January. How much to put into Traditional IRAs, for best tax scenario... I think 10% of our income to ROTHs is more than ample, and might as well put a little into the Traditional IRA since I probably won't make any more contributions for a long time...

I couldn't file though because our tax software was not updated at work. I might be able to file Wednesday.

Our federal tax rate is about 4% of income and state tax rate is about 1%. As I say, we don't pay much (thanks to marriage, kids, mortgage, medical bills, etc. If I had no mortgage I'd still be an itemizer). The medical bills are probably our biggest deduction. I know my boss is severely confused by my paycheck. Everyone else in my office has a working spouse and pays BIG taxes. I get to take home most of my gross, in comparison. Which is hugely key on surviving on one income. I know a lot of 2-income couples who make a lot more income than us but take home less (when it comes to taxes, daycare, working expenses, etc.). He must just think my mortgage is insane. Wink He has seriously like asked me if I Was sure on my withholding, before. & he's a tax guy. Funny enough, we usually owe about $0 - and sometimes get refunds - I withhold plenty.

Oh and Grandma wants me to do her taxes again, and pays generously. So, I think that means I won't touch my savings for my IRS bill come april. Heck, I will probably just pay the IRS when Grandma pays me. That is GOOD news! She gave me $300 last year, and the other $200 should be easy to come up with.

3 Responses to “Refi Progress & Taxes”

  1. Jenn Says:

    MM, I calculate my 'real' federal tax rate each year too. Last year was our best yet - about 3.5%. I think it'll be higher this year because our higher income may have hit some thresholds. We'll see.

  2. MonkeyMama Says:

    I should have said this is also by far the most tax we have ever paid on one income. About $3000 to the feds and about $600 to the state. Last year we only paid about $2000 Federal taxes, and the years prior I received substantial amounts of tax-free income. Though I did get a LOT of tax-free credit card rewards this year - I didn't include those to arrive at my tax percentage. Maybe I should...

  3. EarlyRetirementJoy Says:

    If memory serves, every one of our real estate transactions went smoothly till the last possible moment, when everything went to heck in a handbasket. Crossing my fingers yours will continue smoothly, but it it doesn't, consider it normal and just buckle up and enjoy the bumpy ride! ;-)

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