Wednesday, February 6, 2008

Filed 2007 Federal Taxes

Last night I went ahead and filed my taxes for 2007. I used H&R Block's free TaxCut software online to e-file so I can get my refund back as quick as possible. The software was pretty easy and free. To file for state costs $30 each state. I moved to a different state so must file in 2 states. I didn't know when I agreed to do them both on the TaxCut site that you can only efile for one state. Therefore I paid $30 bucks for Missouri and am going to mail in the return. I'm a little mad about that one. I could have just done Missouri by hand had I known. I did file my Kansas return electronically though.

For my federal return, I am expecting a refund of just over $500. I am expecting a refund from KS of $18 and I owe nothing to MO. I chose the option to have the refunds electronically deposited into my checking account. I am curious to see how quickly the money will be sent to me.

Recently I increased my with holdings from 2 to 3. I am debating whether to decrease it back down to 2 or not. In 2007, I had contributions to an IRA and was able to deduct this amount from my taxable income. In 2008 I will have no contributions to the IRA so I will not have this deduction. Also for 2007 I was able to deduct some short term capital losses. Hopefully, 2008 will fair better for me and I will be reporting gains instead of losses so I won't have this deduction. Both of these issues have me concerned that my taxable income will be higher in 2008 and I should pay more along the way. I don't want to pay taxes at the end of the year but I don't want a huge refund either.

For 2008, I will be getting married. This is a more favorable filing status and will help my taxes. We also plan on buying a house and will be able to deduct the mortgage interest. Therefore, I think I will leave my with holdings as they are for a few months before switching them back to 2. I can certainly use the extra money in the present to help pay off my debt quicker and save for our upcoming wedding.

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