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Reviewed Our Tax Situation

December 13th, 2018 at 05:30 am

It's been a whirlwind of a year! In the last couple weeks, I've been starting to panic, wondering if I actually figured our tax situation out for 2018 in light of the new tax laws. I vaguely remembering need to wait to figure things out. But did I ever go back and review?

Yesterday, I hopped on the IRS Withholding Calculator to see where things stood. Luckily, at least in my mind, we are good. We will owe money but it should not be more than $540. I had increased our withholding which meant $90 more in our pocket each month, or by the time it took effect in February, $990 more for the year.

The calculations only took into account the American Opportunity Tax Credit I plan to take for our oldest daughter (for the final time, as it can only be used for four years). I did not take into account any credits for our youngest daughter. Because she only attended one semester in 2018, I plan to take the Lifetime Earning Credits on her qualified tuition, which should give us at least a credit of $300+ for the semester. That brings the tax owed around $240.

It is possible we will have a little more income added and more tax, but that's not looking too promising at the moment. I expect that anything that occurs is something we can handle. I have always preferred owing a few hundred dollars rather than have the IRS hold our money for many months before getting a refund. I've managed to make this work several years in a row now!

Have you reviewed your tax withholding and how that may affect if you owe the IRS or will get a refund? April 15th is just four months away. It's good to be prepared. The IRS Withholding Calculator is [url=https://www.irs.gov/individuals/irs-withholding-calculator]here.[/url]

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