March 02, 2007
Last year, after getting all the necessary 1099 and W2 forms in the mail, I sat down and did my taxes. They are mildly complex since I live in one state and work in another and, at the time, worked for an employer who couldn’t be bothered to withhold the proper state’s taxes. So I file in my state of residence first to get a huge refund, and then take that money and file in the state of work to pay what I owe. I netted about $200 in the process so it wasn’t all bad.
Federally last year was a bit complicated too. Michele’s death during the year took me down a whole new path in TurboTax, and the sale at a loss of the house in Illinois made for interesting answers to questions too.
I know that I wasn’t thinking too clearly in early February last year, and my memory of that time is a bit hazy as well so I can’t say for certain if TurboTax offered to help me recalculate anything in preparation for this year. What I missed, and what no one told me, is that my W4 filling with my employer had the wrong exemption category checked. I was down as married and not single. This meant that not enough money was being withheld from each check. Oops.
I’ve not completed my return this year, but a quick and dirty run through the process indicates that I’ll owe a couple grand. Fortunately I’ve managed to save a couple of grand so I should be okay. I hate to have to start my savings all over again, but not adding to my IRS woes is a very good cause for the money.
Still, I wish someone had told me sooner about the need to re-file my W4 based on my change in status. You’d think that the IRS would note my change in status, after all it was prominent on my 1040 last year, and automatically trigger a notice to me to adjust my withholdings. You’d think that and you’d be disappointed.