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Wednesday, March 4, 2009

A frugal surprise. . .

I submitted my taxes last week, and found that my federal refund will be much, much higher than I originally anticipated. I had assumed (and my hand-done estimate confirmed) that my refund would be in the $200 range, due to the extra income from my second job. It turns out that I was off---way off---on this. Part of the issue has to do with one of my credits that is actually much higher than it should have been (due to timing---this will need to be adjusted next year), but even with that taken into account, my refund would have been quite healthy.

On the other hand, I've had to pay Oregon taxes for the first time ever. Granted, it's less than $50, but it's kind of a bummer anyway. The reason for this is that the organization I work for part time (from home, in the evenings) is based in another state. Due to this, there is no state tax withheld from that paycheck---meaning that the additional $8,000 or so I earned was basically state-tax free! What I need to do is have my Oregon employer withhold an additional amount each month to make up for this--maybe $15 or so, just to be safe.

The good news remains, though, that my federal refund was a nice surprise. I was able to put most of it into my 'internship year' savings account, which now has a higher balance than my emergency fund account! I'm feeling pretty good about this, although I'm going to continue to send as much money as I can to this account, 'just in case'. Because of the current anxiety about the state budget---and therefore the budget of the institution that I work for---I'd like to have as much money in that account as possible, just in case I'm not able to go back to full time status after my 2009-2010 internship ends. Who knows what the budget will look like in mid 2010, but at this point I don't want to take any chances!!

What are your refunds looking like this year (if you're lucky enough to receive one), and what do you plan to do with the money?

3 comments:

Ethelapple said...

OUr refund was nicer than expected too, and we fully funded our emergency fund, opened an ING account (with your recommendation!) and paid off 5 of our 8 debts (the smallest ones). It was a great jumpstart to our Dave Ramsey Debt free plan.

Finally Frugal said...

I know the 'experts' say that it's better to have more money in your monthly check than to receive a hefty refund, but there's nothing better (psychologically, anyway) than being able to meet some goals, like debt repayment! Good for you, Ethelapple!!!

A Frugal Friend said...

Congratulations on your refund!

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