Friday, May 16, 2008

My Tax Idea

Last August, I quit my job and went back to school. Long story short, the school didn’t work out and I was unemployed until February of this year. Hence, we have a lot of debt. While I was off, I spent a lot of time researching ways to save and so on, and taxes came up pretty big.

It all started when we got our tax refund last year and it was over $8,000! Now, that was a nice payday, but I would have probably much preferred to have access to that through the previous year when I was struggling to make ends meet.

When I got my current job, I decided to finagle my W-4 to have Uncle Sam take as little as possible. So, on my first paycheck, I had the maximum amount of taxes withheld, and then changed it to the minimum for my 2nd check. This gave me an idea of how much I would need for taxes in the worst case.

So, knowing myself, and knowing that I cannot be trusted to actually keep track of how much I should save, I set up a direct deposit to my ING Orange Savings account. This way, the money goes away the same as if I was giving it to the Feds, but I get the ING interest rate (currently 3%) on it. Plus, God forbid, I need it, I have access to it. Ideally, I will still get a refund next year, but it will be from me and with interest.

If you want an ING direct account and $25 free dollars for signing up, email me and I can send you a link to get it.

1 comment:

Tom said...

i have a similar blog called 100 ways to clear your debts. check it out....