If it's tax season, where do I get my hunting permit?

[missroserose]

Now that I'm working for pay again, my tax situation has gotten a little more complicated. After Brian's income our marginal tax rate is XX%, but frustratingly, there's no option on the W-4 for "just withhold XX% of my income, please". (There's the "withhold this additional amount from each paycheck" option, but since my paychecks vary wildly from month to month and job to job, that's not terribly accurate.) Since each job calculates my taxes from 0 rather than from my husband's salary, they never withhold anywhere near enough; consequently we've had pretty good-sized tax bills the past couple of years.

This year, I actually worked out the percentage and did my own withholding; I started a separate savings account, calculated the XX% figure out of each paycheck, subtracted whatever was already withheld, and tossed it in there. I'm ridiculously pleased that I came out almost exactly right - I get to give myself a $100 refund. Not bad for a former liberal arts major! Of course, this upcoming year everything's getting rejiggered I'm going to have to re-calculate everything...and if we buy a house, that'll make everything even more complex. I saw an ad for a local service that trains volunteers in tax prep so you can help low-income and ESL folks do their taxes; I don't have anywhere near the time this year, but I might look into that for next year. It seems like it'd be a good body of knowledge to have.

Ironically enough, even though I'm all set to file through Turbotax, the IRS isn't ready for me yet - they aren't yet accepting my state returns. It's kind of weird to realize you're more on top of things than the IRS...but in fairness, my tax situation is somewhat less complicated, heh.

Comments

[jamesd]

Excellent work! Appreciating the value of an interest free loan from the government on which you can make money until you have to pay is a good thing.

Taxation for most couples here is simple because we're taxed as individuals in most ways. There's an option to transfer part of a person's tax free allowance to a spouse or civil partner but employers just get told by the tax authority HMRC what allowance to use, not why. Changing that allowance is how most people get shortfalls or surpluses fixed. Most people don't need to file a tax return at all. No big tax preparer industry here.

I no longer qualify for the simple treatment and do have to file a tax return each year. A fairly simple use of HMRC's online form filling once you have the numbers available. For us the online tax filing deadline is midnight on 31 January for the previous tax year, 6 April 2016 to 5 April 2017 this time. Get in a tax return that has anything even remotely close to attempted and late filing penalties can't be charged. I did one with estimated numbers over the summer because I was due a refund.

[missroserose]

Alas, since I have to have it liquid at the end of the year that somewhat limits my investment options - I think I made a grand total of like seven cents on the interest. Are there investment options with better return rates that don't also require locking in for a certain period? I'm open to suggestion but keep in mind I'm a complete newbie when it comes to investing of any type - if it's more complicated than a CD I'll need at least some explanation.

I've read about how tax prep works in the Eurozone, and I'm frankly jealous - it would've saved me a lot of time over the years. But yeah, Turbotax and H&R Block and various smaller preparatory agencies all lobbied hard against it when Congress recently suggested a similar system for Americans. Lots of money in tax prep here.

[jamesd]

I'll need to do some posting of my own to explain part of what I think you should do. Some things may not initially seem relevant because I'll be trying to explain long term, big picture financial planning as a necessary component of what you need to know Otherwise you might not understand why I think you should put some money into an investment with a one in four chance of halving in value within the next year... :)

Here I'd use peer to peer lending backed up by a checking account overdraft facility if the money turned out not to be available. I don't know the U.S. P2P market well enough to make a specific suggestion.