2005 Taxes Complete
Tip It!Well, I finally got around to doing our taxes this past weekend. I’ve been using TurboTax for quite awhile now, and this year was no exception. All in all, it took me just over an hour to get through everything, largely due to the fact that I’d already spent some time collecting up the necessary paperwork as it trickled in over the past month or so.
The only real snag that I ran into was that my deductible contributions to my employer’s retirement plan somehow got coded as tips in box 12b when I was entering my W2 information. I’m not sure how it happened, but I’m guessing that it was a data entry problem on my part. Regardless, this little hiccup resulted in a tax bill that was around $2,800 higher than expected! I spotted this immediately on the ‘Federal Review’ screen and was able to fix it in no time flat.
All in all, we made out pretty well this year. We ended up paying around 2.7% in net federal taxes (net tax divided by AGI) after all was said and done. This was made possible by numerous deductions, exemptions and credits (mortgage interest, flexible spending account, retirement contributions, charitable contributions, a boatload of child tax credits, etc.). As good as that sounds in terms of total tax burden, we made out even better last year, with a net tax rate of just under 1.5%.
Published on February 20th, 2006 - 8 Comments
Filed under: Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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February 20th, 2006 at 3:22 pm
I think we need to take back your library card — you’re not paying enough in taxes to justify it.
February 20th, 2006 at 3:29 pm
With 4 kids, he’s paying enough life tax for two family’s worth.
February 20th, 2006 at 9:06 pm
FYI: Turbo Tax seems like a great product — if you have a PC.
I bought it for my Mac, and the sections that work are fine. Problem is, HUGE sections of the program just flat-out don’t work or are simply unavailable for Macs. (They don’t alert you to that fact anywhere.)
And their IT support/Customer service regarding those issues has been atrocious.
Buyer beware.
February 20th, 2006 at 9:41 pm
Hmmm… I use a Mac and didn’t run into any limitations. That being said, I didn’t use any of the tutorials and stuff like that.
February 21st, 2006 at 2:26 pm
You certainly made too well.
Even after being carefull, we ended up paying 57,000$ in taxes. Ouch.
February 22nd, 2006 at 9:40 pm
I’m a former TurboTax user — switched to TaxCut this year when a friend sent me a free download link and said I could import TurboTax data.
February 25th, 2006 at 3:35 pm
sorry, here’s the link
http://tinyurl.com/cy837
March 7th, 2006 at 10:15 pm
Nickel – You are my idol. Not only are your taxes done in early March. You hardly pay any taxes. Nice work.