WHOA, tax question, last year we got almost a $3000 return, this year we get less than a thousand, w

Taxable Income

Adjusted Gross Income $41,709 $55,741

Less: Standard Deduction $10,300 $10,700

Less: Personal Exemptions $6,600 $6,800

____________ ____________

Taxable Income $24,809 $38,241

Taxes and Credits

Income Tax $2,969 $4,951

Less: Tax Credits $1,273 $63

____________ ____________

Net Tax $1,696 $4,888

Payments

Federal Tax Withholding $4,842 $5,854

Estimated Payments $0 $0

____________ ____________

Total Payments $4,842 $5,854

____________ ____________

Net Refund $3,146 $966

WHOA, tax question, last year we got almost a $3000 return, this year we get less than a thousand, wat i miss?

Definately the increase in income made a difference, you might want to check your wifes withholdings that she currently has coming out of her paycheck.

Also, your tax credits are roughly $1200 less, which makes a difference as well. Look and see what tax credits that you got last year that you aren%26#039;t receiving this year, maybe you missed something, like claiming a child.

WHOA, tax question, last year we got almost a $3000 return, this year we get less than a thousand, wat i miss?

you are in the 15% marginal tax bracket -- which means that, for every $1,000 your taxable income increases, your tax goes up by 15% of that figure [$150].

so, taxable income up 13, 400+ should cause and increase in tax of about 2000

PLUS, your tax credits went down 1200

BUT, as you observed, your withholding only went up 1,000.

looks like the correct result to me

***

here%26#039;s what I%26#039;d recommend ... increase or start an automatic transfer of income in the amount of $250 a month from your paycheck to an investment or savings account.

then go on about living within your cash income.

***

my guess for 2008 is that, if your wife continues to work for the whole year, that next year, your taxes will show that you owe money. I%26#039;ll guess the amount at middle hundreds of dollars.

then what you do in April 2009 is withdraw the needed amount from your investment/savings and pay your tax bill.

and put the remainder aside for your retirement off in the future there.