With the new promotion and increased income, I figured I should check out where that puts us with taxes. We are still in the same tax bracket of 15%. But 15% of more is still more taxes!
I also realized and kind of knew that we would no longer be eligible to claim child tax credit on our daughter that turned 17. That right there is $1000 more in taxes than we have had in the past.
I have estimated that taxes(after the credit for one child) on our taxable income will equal $4,891. So far in eight months we have only had $2,308 withheld and withholding another $450 for four months will still put us short. I went ahead and changed withholding from 8 to 7. This will have us withholding $488 each month for the next four months. I could have made it more, but decided it was okay to keep it where it should be for next year and we will just owe the government again this spring. I expect in the end we will owe $630.
I plan to set aside $105 for the next six months for this particular debt. This way it won't be a big surprise or burden at tax time.
Each pay period we will have $440 more income after all the changes. DH and I did discuss this last night and he is all for just sweeping the money into savings knowing a move, and college are in our future. Seems like the best plan for now. We may evaluate retirement at the first of the year.
Do you evaluate your taxes anytime during the year? Or only at tax time?
Estimating Taxes Before Promotion
August 28th, 2014 at 11:16 pm
August 29th, 2014 at 01:33 am 1409272394
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