In 2009, I had a ‘hybrid’ tax situation. I retired in October so I fell into a category where a ‘life event,’ i.e. retirement, introduced some uncertainty into my ‘normal’ tax situation.

This week, I filed my tax return on-line, as usual. It turned out that I owed the feds a small balance, but the insolvent State of Kalifornistan owes me a little. It has been my custom to try and wind up owing both the state and fed a small amount, just enough so I don’t get a penalty. No sense letting either of the two keep my money interest-free.

I have a plan to deal with the state owing me money. God only knows how long it will take for them to credit my bank account with my refund, or even IF they will do so. Therefore, I can and will suspend state withholding from my pension. A few keystrokes and it’s done.

Update: 04/14/2010 - Amazing! The California Franchise Tax Board deposited our state tax refund to the bank account today. I guess I won’t be suspending the withholding after all.

tax-calculator.jpgThe Turbo-Tax tool for 2010 isn’t on line yet, so I searched for another way to estimate my 2010 tax liability. A website called CalcXML has a quick federal-only tax calculator that allows you to plug in your situation and numbers to get the estimate almost instantly. You don’t need to register or enter any personal information. I used it to see if my target withholding will be in the ballpark of where it needs to be at year’s end. My state tax bill usually comes in at 25 percent of the federal amount, so I use that as a guide. @#%&! high taxes here.

Just a note about filing in April. I do the numbers in February or March, so I already know the ‘damage.’ I file the week before the deadline so if there is a glitch, I have time to fix it. This time, Turbo Tax and (believe it or not) the IRS found another 250 dollar tax credit during the filing process!

Update: I found the code to put the calculator here . . .