2005 Taxes Complete

Written by Nickel - 8 Comments

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
email this article - add to tip'd - stumble it - digg it - bookmark it

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!

Comments (scroll down to add your own):

I think we need to take back your library card — you’re not paying enough in taxes to justify it.
Comment by FMF — Feb 20th 2006 @ 3:22 pm
With 4 kids, he’s paying enough life tax for two family’s worth.
Comment by jim — Feb 20th 2006 @ 3:29 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.
Comment by Luna_C — Feb 20th 2006 @ 9:06 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.

Comment by nickel — Feb 20th 2006 @ 9:41 pm
You certainly made too well.
Even after being carefull, we ended up paying 57,000$ in taxes. Ouch.
Comment by Jose Anes — Feb 21st 2006 @ 2:26 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.
Comment by mpragnes — Feb 22nd 2006 @ 9:40 pm
sorry, here’s the link

http://tinyurl.com/cy837
Comment by mpragnes — Feb 25th 2006 @ 3:35 pm
Nickel - You are my idol. Not only are your taxes done in early March. You hardly pay any taxes. Nice work.
Comment by Jerry Maguire — Mar 7th 2006 @ 10:15 pm