I am just boggled by the details of filing our income taxes. Our financial circumstances are not very complex, yet I am no good at predicting what to expect each year. It is probably a good thing that I am not a tax adviser of any sort.
Years ago, we heard the advice that it is best to not get a big tax refund. It is smarter to keep that money in the paycheck and prevent the government from banking on all of its interest. That sounded logical. It was fun to get a return instead of having to pay in, though. So, we didn't spend too much energy trying to make our taxes break even.
Until this past tax year.
When I took a seminar through Crown Financial Ministries, my eyes were opened a little further. One of the budget scenarios that we studied had a couple who were struggling to make ends meet. The instructor explained how they were advised to increase their exemptions in order to have less taxes taken out of their paychecks. The additional money in each paycheck from that point clearly helped balance their budget.
That was just the example I needed to help me see the benefit of not getting a large tax refund. My husband immediately altered his exemptions to have less tax money taken out of his paychecks. It helped our monthly budget tremendously.
Since the changes were not implemented right at the start of the tax year, and since I do not have the tax code figured out that well, we were still expecting a refund after filing our taxes this year. It was expected to be a much smaller refund than before.
Except that it turned out to be a much larger refund than expected. This time it is not as fun as in the past, but instead it is a huge relief. A HUGE relief. It is an answer to prayer. The amount equals the amount of out-of-pocket expense we are anticipating having to pay for medical expenses that our insurance won't cover.
All this time, I have been thinking that we will spend this whole year struggling to keep up with medical bills (much like life has been during the Fall and Winter months). Instead, we have just been blessed by filing our income taxes! How crazy is that?!?
Years ago, we heard the advice that it is best to not get a big tax refund. It is smarter to keep that money in the paycheck and prevent the government from banking on all of its interest. That sounded logical. It was fun to get a return instead of having to pay in, though. So, we didn't spend too much energy trying to make our taxes break even.
Until this past tax year.
When I took a seminar through Crown Financial Ministries, my eyes were opened a little further. One of the budget scenarios that we studied had a couple who were struggling to make ends meet. The instructor explained how they were advised to increase their exemptions in order to have less taxes taken out of their paychecks. The additional money in each paycheck from that point clearly helped balance their budget.
That was just the example I needed to help me see the benefit of not getting a large tax refund. My husband immediately altered his exemptions to have less tax money taken out of his paychecks. It helped our monthly budget tremendously.
Since the changes were not implemented right at the start of the tax year, and since I do not have the tax code figured out that well, we were still expecting a refund after filing our taxes this year. It was expected to be a much smaller refund than before.
Except that it turned out to be a much larger refund than expected. This time it is not as fun as in the past, but instead it is a huge relief. A HUGE relief. It is an answer to prayer. The amount equals the amount of out-of-pocket expense we are anticipating having to pay for medical expenses that our insurance won't cover.
All this time, I have been thinking that we will spend this whole year struggling to keep up with medical bills (much like life has been during the Fall and Winter months). Instead, we have just been blessed by filing our income taxes! How crazy is that?!?
We are getting more back this year than we thought too.
ReplyDeleteIt is such a great blessing when God provides money in unexpected places!