Every year I struggle with this. Basically, our income keeps changing (Mostly up, but sometimes down). We keep having more kids. We keep giving more away in charitable contributions. So, I think I have our tax situation figured out and think we'll get close to breaking even (not owing or getting money back) but then something changes and it just gives me a headache.
We got a $2,000 refund last year. This year the following changed that will impact our taxes
- My income increased 15k
- Husbands income increased 5k
- We're having our 3rd child in November
- I maxed out my 401k (up from a 7k contribution last year)
- Hubby maxed out IRA (up from 0 last year)
- We increased charitable contributions to church by almost 10k
- Due to a giant purge of crap, we gave a metric crapload of stuff to Goodwill.
I have no idea how to minimize our tax refund (I am embarrassingly bad at tax math) but I estimate it will be closer to 4k this year, which is completely ridiculous.
Plus, once I figure it out, it won't even matter!
Because next year, our tax situation will change drastically again!
-I'm going down to 2 days/week at work, decreasing my income by 20k
-401k contributions will drop to about 8k/year for me (due to income going down. I'll only make about 18k next year)
-There will be much less in the way of contributions to Goodwill.
Any advice? Sorry for the rambling, I just can't figure it out. I'm totally fine with putting our refund into my IRA next year, but there has to be an easy-ish way to figure this out.