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%.