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I'm a firm believer in paying yourself first. That's one of many sayings in our household. I can't remember going on any shopping spree with our refunds. An IRA is a great way to save.Unfortunately, people do go about it the way I mention below.... It is an ARG! financial move.My hubby and I pounded into our daughters' heads that saving your money gives one the power to negotiate in their favor. Buying on credit is a unnecessary drain of resources.
I've been filing our tax returns from the beginning (oh bring back the days of 1040EZ), before there were computer software that helps you along. Those programs makes it so much easier to do. Plus, if you have to file a state tax return (thank God, we don't have a state tax here in Texas), most software programs offer that as well.Ugh, this year, I have to file a state tax form for some property elsewhere. However, due to the ease of using such a program, I have no plans to go to a professional to file this.I think people get nervous about doing it themselves. Worse yet, they get sucked into the thinking, "Wow, that much? I need it pronto!" and they get an advance, on top of high filing fees. Going "the do it yourself" route and having a little patience, usually you can file and have it direct-deposited in your bank account in about 2 weeks. For about $25-40, approximately.
dohBana, Sounds like you and your wife are not 65 and older, and you are not a teacher and you did not contribute to a deductible IRA and the returned is filed as married joint. Basically you add half-of the social security benefits to wages, interest, dividends, and other income, if it is more than $32,000, none of the social security is taxable and you can still file a 1040EZ. If it is less than $32,000 you have to file a 1040A. If this is the case take the figure that is less than $32,000 and subtract an additional $12,000, if this is zero or less none of the social security income is taxable. If it more you will need to use the worksheet to determine the amount that is taxable. I wish you the best.
On a more serious note, my wife receives Social Security disability. Does that income have to be claimed on our taxes, or more to the point do we have to pay income tax on that money? We usually don't have enough deductions to itemize and file on the 1040-EZ.
I'm asking Timothy Geithner to prepare my taxes this year.