Tuesday, November 21, 2006

Estimating Taxes

As I get ready to wrap up another year, it seems there's always more financial work to do. Not long ago I went through my seasonal save-it, pitch-it fight with all the old bank statements, paperwork etc. However, I am realizing that the real interesting thing for me right now is getting ready for tax time and figuring out how much of a refund I will likely get.

I know that I am going to get some flack for this but I have extra tax taken out of my check each pay period. Mostly, I do this to make sure that I never underpay my taxes. The other nice feature about this is that it provides some built-in buffer against my side income so that I am not whacked with a large amount of money in tax at the end of the year. This little extra kick in each regular paycheck means that I can generally use the side income as I see fit throughout the year.

So now I am in the process of divvying up my expenses and such for the year into categories and getting ready to start filling out the forms once the W-2s come in January. Has anyone else started the tax season prep-work or am I the only one?

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