Finally was able to get everything together for the taxes in 2019. We use a CPA because of some complications, though its fast closing in on the time when I plan on taking back over doing our own taxes (I did them up till about 2011).
Well, we got the info back, I reviewed them, and the end result was….. we owed about $2,400 to the Fed (and $500 to our state). Plus penalties. Ouch.
I thought we’d prepaid enough to make sure this wasn’t an issue, but apparently not. We’ll have to take some money out of savings to pay for it. This way, we won’t be selling stocks during the current down market. That is why you have spare funds in place.
I can kick myself a bit, but in the end, the next step should be to evaluate your current tax withholdings for 2020 and make sure they are taking enough out. Low and behold, after running the numbers – we were about $2,800 low in withholding, based on what I see coming for the year.
Back to the federal/state W-4 form, where we determine withholdings, make a few adjustments which will reduce our available income a little over $200/month, and we should be set for taxes at the end of 2020. Better to take action at the beginning of the year than to try and find money at the end of the year.
I tend to try and get our taxes to $0, or have us owe a little money. I know some people like to get a nice refund, but I’d rather not give the government and interest free loan. I can use the money better.
Hopefully, your tax situation is better than mine!
Mr. 39 Months