What a week it's been so far... and it's only Wednesday! Well, the week started off pretty good. I found out that I will be getting a pretty good salary bump (11%). I was really happy when I heard that news :) I immediately started tweaking the budget spreadsheet and found that I could get our debt repayment this year up to around $26K! That's assuming we stayed on course for the remainder of the year, which I am bound and determined to do!
Then my husband got his W2 and I entered it into Turbo Tax. Yeah, this is where things went horribly wrong. The numbers in the corner started changing and turned from green to red. My worst fear. I had an idea that we may owe a little this year because earlier in the year we were looking at buying a home because the tax credits were so good. We did a silly thing and I changed my payroll with-holdings to almost nothing. We were trying to come up with the required down payment to get us into a house and figured we were going to get the tax credit later anyway. Well, that didn't happen. We decided to hold off on buying a house. In addition, I cashed out my old 401K plan and although I requested taxes to be taken out, unfortunately they didn't take enough. At the end of the day, it looks like we'll owe about $7K in taxes! Hold on a sec, I just had to swallow some vomit. I'm making myself sick over this. So, my change in salary is pretty much completely eaten up by us owing taxes. What a bummer.
I have to give my husband credit though. He mentioned to me that this may happen earlier in the year and told me I shouldn't reduce my with-holding but I did it anyway. I've never really had to pay before so I thought I'd take the chance. He's such a positive guy though and forward thinking that he's trying not to let me focus on the mistakes of the past. But ouch, it's so hard not to!
So, I'll spend the next few weeks trying to think of ways to get the taxes we owe down, but at the end of the day, we'll probably end up having to pay it. How's everyone else doing with their taxes? Misery loves company!