I have just finished filing our 2008 income tax returns. I managed to do a pretty good job estimating our withholding and quarterly prepayments. We will receive a small refund from our federal return, and we only had to pay a very small amount in additional taxes to our state government.
Unlike last year, I did not make any contributions to my SEP-IRA. I did so last year to reduce our tax liability. This year, with an additional child in the family, and an additional child care credit, our liability was already slightly lower than the previous year, and I really do not have any “extra” cash sitting around for contributions. Plus, with the current economic environment, I’d rather have a slightly larger cash reserve – and pay a little more tax on any interest that cash might earn – than to tie up more money in a retirement account.
As in previous year, I filed electronically, and directed the IRS to deposit my refund directly into my checking account. For the payment to our state, I simply printed out a payment voucher (provided by my tax preparation software) and sent it, along with a check for payment amount, to our state’s department of revenue.
I printed two copies of each return, federal and state, and I also saved two digital copies.