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Preliminary Taxes - Car Pay Off

January 13th, 2013 at 12:19 am

On Thursday along with our paycheck stubs we also got our W-2's! All of us were pretty impressed to get it so quickly.

Friday turned out to be a snow day, so I decided to get on Turbo Tax and do a test run of my taxes for this year. The only thing I couldn't figure out how to account for was the sale of stock (and resultant Capital loss of about $35) and my 401k rollover into a Traditional IRA. I'm assuming I'll get whatever documents I'll need for those in the next month or so - but neither one will have much affect on my taxes (I don't think at least ..)

So, in the end, it looks like I'll be getting a tax refund in the realm of $2,100! Sweet! About half of that is from W-2 overpayment, and the other half is a combination of Lifetime Learning Credit and my contribution to the Traditional IRA (not related to the Rollover.)

On Monday I do plan to get the form in to the main office to make my deductions to 2. This will amply cover the approximately $20/mo from the 2% SS tax and give me a little more to work with for other goals throughout the year. I thought about raising it to 3, but there is a possibility of some good income this summer, so I don't want to press my luck too much.

What is that good income possibility, you might ask? Well, it appears that we might be able to have summer school again this year!! (We had thought that it wasn't going to happen due to funding cuts, but it might just happen!) If it does, then that *could* mean an approximate $3k boost. Yes!

Now you may be wondering why I mentioned car pay off? Well, I was working the figures out and I realized that I could have the car paid off by:

August - by putting all tax refund and the next 2 3rd paychecks towards it...

OR

by June - by putting all tax refund, next 2 3rd paychecks AND using part of the Summer School money to finish it off.

Either way, from my calculations I *will* be able to meet ALL of my financial goals for 2013, and possibly exceed them! With the summer school money, I am thinking that after paying off the car loan, I would put 1/3 to my EF, 1/3 to my FIRE fund, and 1/3 to my Vacation fund.

It made me extremely happy to see that it is a STRONG possibility to have this car paid off in much less than a year.

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I have now met the SB daily goal for 12 days, and cashed in for my 2nd $5 AGC today for January. I figured out that if I meet the goal every day for January, and then get the 300 SB bonus, that it is worth 8 $5 AGC, which of course puts me into February. I can handle that. Smile

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A thought just occurred to me. When I did the rollover of my 401k from my old company, I received a check. It was made out to the company I had opened an account with AND me. When I'd checked the balance a short time earlier, it was around $5500.00. When I received the check, it was for just over $5k. I chalked it up to maybe a big dip in what it was invested in, but now I'm wondering if it was a 10% penalty?? If it was somehow counted as an indirect rollover? At the time this happened, I was not in a good head space dealing with my dad's death, etc., but only had less than a week from the time I received the letter telling me I HAD to do something with it ... so I'm worried that I might be getting hit with a big tax hit. What I've read online is confusing - one place I read said that if you received a check at all, then it is considered an indirect rollover (if you don't add the withheld money to it.) Another place I read that for either indirect or direct you get a check - just have to get it deposited within 60 days.

Should I be worried???

4 Responses to “Preliminary Taxes - Car Pay Off”

  1. twest Says:
    1358036919

    Laura what is a FIRE fund?

  2. creditcardfree Says:
    1358037010

    Nice potential refund...and great plans for that car loan pay off. Either is good in my book.

    If memory serves, you will get a 1099R for the 401K rollover. The form specifies the withdrawal was for a rollover. Sometime before May, you will receive a 5498 that will show the rollover going into your IRA. You do not need the 5498 to file, but do keep for your records.

    Sale of stock...I think is form 1099B, which will show your capital loss, sale amount ect. You can look for a sample form online, so you can see what you will be receiving.

  3. FrugalTexan75 Says:
    1358037187

    Twest,

    FIRE = Financially Independent Retire Early Big Grin If you haven't heard of Mr. Money Mustache, then you might want to check out his blog. It's where I got the term from.

    CCF,

    Thanks!

  4. rob62521 Says:
    1358051537

    I would ask someone about the rollover issue. Worth checking out. It is wonderful you are going to meet your 2013 goals.

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