Income Tax Planning

[CG6468]

Does anyone here know of an income tax planning site? It's hard to know if your withholding is where it should be.

[obumazombie]

Does anyone here know of an income tax planning site? It's hard to know if your withholding is where it should be.

I arrived at ours through a series of trials and errors. Mostly increasing witholding until we weren't being fined anymore.

[CG6468]

I arrived at ours through a series of trials and errors. Mostly increasing witholding until we weren't being fined anymore.

We were never fined, but there should be some way to learn something about your upcoming tax status.

[Eupher]

There's a worksheet on your W-4, but I found that formula to lead to too much withholding (of course -- it's an interest free loan to the gubmint, ya idjit!).

I had to tweak my state withholding as I had to cough up $350 to those bastards this year. I'm still okay with federal in that we get a modest return -- not too much, TYVM.

[Zeus]

Why not just go with a CPA, CFP or tax attorney or whatever of the alphabet bean counters. If they can save you on taxes or guide you towards some reasonable investments it's money well spent. That money also tax deductible by the way.

[Lacarnut]

Does anyone here know of an income tax planning site? It's hard to know if your withholding is where it should be.

Zeus has the right idea. However, if your income is going to increase by say xx number of dollars of ordinary income rather than long term gains, you could just add that estimated increase to your taxable income (line 43) from last year, go to the tax rate, divide the increased amount by 12 to come up with how much extra per month you need to withhold. I did that last year and may have to adjust it this year also. If your taxes are complex, you should be using a CPA/tax advisor

[CG6468]

Zeus has the right idea. However, if your income is going to increase by say xx number of dollars of ordinary income rather than long term gains, you could just add that estimated increase to your taxable income (line 43) from last year, go to the tax rate, divide the increased amount by 12 to come up with how much extra per month you need to withhold. I did that last year and may have to adjust it this year also. If your taxes are complex, you should be using a CPA/tax advisor

Our taxes are not complex. TurboTax does just fine for us. It's just that in 2011, my wife retired and had a big cash payout with no withholding. We normally get a small bit of money back, which is where I want to be, but I wouldn't mind paying a very small amount either.

[Lacarnut]

Our taxes are not complex. TurboTax does just fine for us. It's just that in 2011, my wife retired and had a big cash payout with no withholding. We normally get a small bit of money back, which is where I want to be, but I wouldn't mind paying a very small amount either.

Turbo tax is ok unless you get into income produced from other sources such as rental property. In that, case a CPA will more than pay for itself.

If your wife retired with a big cash payout and no withholdings, you are going to whacked pretty good unless the payout is non taxable or she only withdrew a portion of the proceeds in a retirement fund like a 401k.

[CG6468]

Turbo tax is ok unless you get into income produced from other sources such as rental property. In that, case a CPA will more than pay for itself.

If your wife retired with a big cash payout and no withholdings, you are going to whacked pretty good unless the payout is non taxable or she only withdrew a portion of the proceeds in a retirement fund like a 401k.

Taxes are done and filed on about 3/1, and we got hit, but it was payable with no sweat. We have no rental property, and I don't want to do that anyway.