Tax Time: My income went down?!
Like many pf bloggers, I enjoy tax time. I’m careful to make sure I get a small refund — and I don’t care if I’m giving the government some minuscule interest on the “loan”, unscheduled money does wonders for my budget!
This year I should get just under $700 back! I also owe Cali about $50 bucks, so they can’t send me an IOU. I have pretty simple taxes (and I only have to file in one state for the first time in years!) and I usually learn something by doing it myself.
This year, I was really surprised to see that my Adjusted Gross Income went DOWN, despite two raises! By about $2,000! What happened?!
I traced it down to two things. First, even though I got a raise, I put pretty much all of it into my401k. Since I reduced expenses by living with T, I put even MORE in my 401k. Second, I also had a signing bonus and moving expenses last year, which may have skewed things a little bit. I’m not sure though, as I think only the bonus was taxed.
I’m also still quite far out of line with the average tax payer. The average person of my AGI paid about 64% of the taxes I paid. As a childless unmarried renter with a relatively high salary, I’m not surprised. Marrying T will help out my taxes in the short term as his income is about half of mine for now. Still, I told him this year that I was SO GLAD we weren’t married yet because his taxes are confusing with his grad school stuff combined with his independent contracting!