Seeing that it’s tax season again, I’m trying to get our tax documents together to make sure it’s easy when we decide to do them. We always do them ourselves and have my dad check them over. Last year we ended up owing federal taxes, around $1000. I decided that I would have $50 a paycheck withheld for taxes. At that time, I thought that it was the best for us. I guess I didn’t think about saving the money myself and putting it in a separate savings account.
This morning, I decided that I would change that. I logged on to my employer’s HR website and changed my direct deposit information so that $50 a paycheck goes into a separate ING account for taxes. Why should I let the government use my money each month when I can be earning interest on it? True, it’s not going to be a lot, but I feel better knowing that I am in control.
I’m considering doing the same thing for my car insurance, but to be able to do that, I’d have to take money out of our emergency fund to do so, and I’m just not comfortable doing that right now. Of course, if I approach it that I’m paying 6 months at a time and taking it out of the emergency fund (6 months worth of expenses) it’s a wash. The only thing is I’d save a $2 installment fee each month for paying it by 6 months instead. Maybe that will be my next move.
I’m not looking forward to doing our taxes, because I’m afraid we’re going to owe again. I guess we won’t know until we actually do them. Plus, with me saving the $100 extra, we technically should be getting some back. I’ll keep my fingers crossed.
Do you have extra money put aside for taxes each month?