Tuesday, August 9, 2011
Something told me that I should do a check up as to where I am with my tax withholdings at this point. I decided to look at the total taxes withheld on my W-2 from 2010, compared to where I would be if I continued to withhold what I currently am, through the end of 2011. Oh oh, I smell trouble! From the looks of it, I would be very close to what I withheld last year. We all know where that got me (read here if you don't)... owing $7K+ in taxes.
I know how it happened. In an effort to get the taxes paid off quickly this year, I had basically nothing taken out for 5 paychecks. I thought claiming Married, Zero for the remainder of this year may balance things out but from the looks of it, it won't. Unfortunately we don't have much for deductions really since we don't own a house or have children we can claim.
I refuse to be stuck in the same situation I was last year, where I had to scramble to get the money to pay the tax man. I don't want to do that again. I won't do that again.
This leaves me with no choice but to adjust my withholdings now. I'm going to have an additional $360 withheld each pay period. There are 10 more paychecks left this year, so that will be an additional $3600 going towards taxes. I'm not even sure that this will be enough but it's all I'm willing to do right now. Anything more will impact our debt repayment schedule more than I'm willing to do.
Hopefully this will be a wash, but if not, at least I'll owe less. Just when you thought it was safe to let your guard down. Better I discover it now than when it's too late to remedy.