Taxes Done

27 Feb 2006

Our taxes are finished. This is probably the earliest I’ve ever finished my taxes. We went to H&R Block as we did last year. Last year our taxes were complex, involving several jobs and a lot of 1099-MISC income and self-employment tax, and I did them myself, and then took them to Block to have my calculations confirmed. This year things were simpler, but our experience with H&R block was so positive that we just went back.

Strangely, although we are getting a small refund on our federal taxes ($75 or so), we apparently owe the state almost $600. This has happened even though we set our withholding allowances identically on the Michigan W-4, as the form advises. I used Quicken’s withholding allowance calculator to try to estimate everything so that we came out close to breaking even at the end of the tax year, but it did not come out right. Apparently the difference is because the federal forms factor in additional deductions, while the state tax is pretty much a flat tax based solely on income.

We’re changing our state withholding allowance for 2006. This advice from H&R Block is probably worth more than the $150 fee we paid H&R Block, since we might have wound up owing a couple of thousand dollars to the state for tax year 2006, and would probably have to pay penalties on that. So I’m quite satisifed with our service!

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