Monday, February 27, 2006

More on this year's taxes

I got less of a refund this year, but I can't say this was due to any strategy on my part of adjusting my witholding to avoid giving the goverment an interest-free loan, as mentioned by a commenter. That is one of the things on my to-do list for this coming year, but for 2005, I thought I must have just ended up paying more taxes than last year, since I got less back.
I was pleasantly surprised to find that this was not the case.
In 2004, my federal tax was $11,793, In 2005, it was only $11,624.
In 2004, my state tax (incl. NYC local tax) was $6,898. In 2005, it was only $6,683.

So did I actually get to partake of that manna from heaven known as a tax cut?!?

Well, one part of the story is that I made less money. Hey, I should try that again next year! (It was due to a lower bonus.) I also contributed more to my 401k, since the maximum increased from $13k to $14k. But since I had fewer deductions, my taxable income was only $148 less this year. I also did my secret ju-ju tax dance on the summer solstice and shook salt over my shoulder any time I sneezed. The upshot of all this is that it appears that my federal tax rate was about a quarter of a percent less than last year. I think. I don't know. I guess that is the kind of sad thing about our tax system-- even a well-educated person like myself can barely tell if she got a tax cut or not. Then again, maybe the sad thing is my math skills.

3 comments:

Empty Spaces Inc. said...

buy investment property.

I get to depreciate my property at the rate of roughly 5k/yr per house!

Bao-Long said...

The IRS has a pretty handy online calculator for figring out one's withholding.
http://www.irs.gov/individuals/article/0,,id=96196,00.html

Caitlin said...

Now...is there a smudge stick involved in the ju-ju dance? ;)