I have been researching my personal income taxes. What I had in 2007, what I will have in 2008, and some go forward issues.
Some questions and comments
2007 AGI 103k taxable income 63k federal tax owed $8700 8.4% effective tax Ohio state tax owed $3800**net- refund of $3000+ federal and owed state ~$300** For last 3 years we get a larger federal refund each year and owe state more and more each year. We have adjusted state withholdings each year and it doesn't seem to work. Meaning we owe $120, so we withhold $10 per month and next year we owe $240, so then we withhold $20 per month extra and next year we still owe more than the $240 the previous year.
2008- will add 2 dependants (kids) income will drop slightly (one year thing- wife was on disability for about 16 weeks). The raises we receive might offset this, not sure yet. In June of 2008 wife adjusted withholdings so she has less federal tax withheld and take home was increased. In 2009 this should result in 0 federal refund.Issue- I cannot find Ohio tax tables which look like the ones on fairmark. First two pages of google search found nothing like these:
Second issue- taxable income is in 15% tax bracket (63k). 401ks are NOT maxed. Roths ARE maxed. 40k of deductions coming from mortgage and property taxes, plus some unreimbursed business expenses. Would it make sense to not put money in 401k and leave extra investment dollars in taxable accounts because paying 15% now is better than paying 25% or more in retirement? Fine line because if I reduce 401k contribution percentage for taxable accounts, I risk being put in 25% bracket.
**aside- 20% of gross pay is set aside for retirement in Roths or 401ks, the question is maybe taxable accounts are better than 401k provided we stay in 15% bracket**Third- I am considering some 529 plans which give state tax deductions but no federal tax deductions. Would the state tax deduction in any affect my federal tax liability?
contributions to a 529 contribution to gain a deduction? I don't think so (money would be taxed at federal level), but thought I would ask.
Any comments welcome. Thank you.
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