A random thought occurred to me today: neither S or I have adjusted our tax withholding since the babies were born which means a bigger tax refund next spring. The thing is... I don't want a big tax return in 6 months, I want a bigger paycheck now! I know some people like getting a fat tax return but for me the idea of loaning the government money, interest free, seems unfair given that the government isn't about to extend me any interest free loans. However, I don't know enough about taxes when it comes to having dependents to know whether I should adjust my withholding or S should adjust his. I do know that the extra cash each paycheck would help us pay off our debt that much faster so it seems like this should be investigated quickly.
Other questions that flooded my mind once I started down the tax rabbit hole:
- Since I was on maternity leave this year, S stands to make more... should he file as head of household with the babies?
- Would I qualify for the EIC since I didn't make as much this year if I filed with the babies?
- Is it possible to split the babies since we aren't married? Is that the best bang for our buck?
- What other kinds of credits are out there for people with kids?
- What difference would being married make? Is it significant enough to consider going ahead and getting married this year?
I'm adding tax research to my to do list for this week but I have a feeling this may be complicated enough to warrant visiting a tax pro.
Whoa, my head is spinning! That's a LOT of variables and there's potentially a lot of money at stake, so visiting a tax pro sounds like a good investment. We're probably going to have a professional look at our taxes this year since it's the first year we're filing as married. I also want some advice on what my allowances should be on my W-4 - didn't adjust those after we got married this summer.
ReplyDeleteIt's crazy how much money is on the table, I used the IRS withholding calculator to run a couple quick scenarios and was shocked to see how much we stand to get back in the spring if we don't adjust our withholdings!
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