Taxes

I am starting to prepare my 2011 tax returns.  It's important for the filing of the FAFSA I am going to do, though I am not 100% sure I need to do that for graduate school - must research and find out.  So far everything is coming in as it should, I've gotten my day job W-2 and the 1098-E's for my student loans.  I even received a 1098-T for the $400 or so dollars I paid for my Accounting I class this summer, which must be something new because I don't remember getting one when I attended undergrad over six years ago.  I know I had the cash out of my DTB IRA, so that's an additional $6K I have not yet accounted for in my income.  I'm not sure what form I need for that though, so there is a lot of information I need to collect before finalizing anything. 

Right now, H & R Block is showing I will get $900 back from federal and $4000 from State.  I realize these are not legitimate numbers, as I said I cashed out an IRA this year, and I'm really just hoping to break even.  I contributed more to my 401(k) and had an additional $50 per paycheck withheld for state taxes to compensate for both the IRA cash out and my second job.  So the estimates are far from realistic at this point, BUT wouldn't it be nice if they were?

That large of a return would pay off more than just the Christmas debt I saddled myself with this past holiday.  It would give me extra for school, or vacations, or to put away for Christmas this year.  Is this what homeowners feel like?  I know they get a larger return than I normally do because of the property values and mortgage paid, etc.  But of course that has to go back into upkeep of the house and property taxes.  Could I possibly stop having an additional $50 withheld from my paycheck every two weeks?  That would bring at least an additional $100 into my budget every month.  I will have tuition payments this year.  Perhaps I could rely on the regular withholding again. 

It's just the thought of having to pay the government money at the end of the year freaks me out.  It's not that I don't want to pay taxes at all or that I think they're too high, etc.  It's just that I'd rather pay too much and have the government act as a sort of savings account than have to keep estimating throughout the year to make sure I don't have to pay when I file.  The saving of money has never been easy for me, so owing the government would not be easy on my finances.  It's the intense pressure of owing money to someone or some organization that causes me to freak out.