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Tax Time: My income went down?!

January 30, 2010

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!

3 Comments leave one →
  1. January 31, 2010 10:27 pm

    What do you do to owe CA money? Do you claim more than just 1? CA takes way more money than they should from me and for the last two years I have gotten about half of it back.

    • January 31, 2010 11:23 pm

      No, i claim 1. That’s a good question –i have no idea what I do. Last year I got a small refund. About $100. I contribute quite a bit to my 401k, but I wouldn’t think that would matter.f

      I pretty much have no other deductions besides the standard. maybe that is it?

      • February 1, 2010 9:35 am

        Interesting to know. The math just works out for you! I claim the standard 1 and contribute to a 403(B). CA still takes too much from me. Ooh well.

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