So I did some tax planning yesterday thinking that with the house purchase maybe we can even reduce our w/h. HA! Boy was I wrong! I don't know what I was thinking. First, the house/itemizing saves us only 2k/ year. But, because there are three jobs between us, our withholding is way, way off. This is our first year with only W2 income, and I assumed it would be fine at married 0, but we need to be at single 0 (and then some). We also took 5k (penalty free) out of traditional IRAs to help with the house, which doesn't help. Another problem is that my insurance is not pretax so that is costing us additional 2k yr. I've been pestering my employer to get a cafeteria plan (from what I understand, it is really just a piece of paper?), but they are pushing back. I am the only one with payroll deductions for the insurance. The only other guy on it is their longtime main sales guy, and they have always paid for it. It's offered to the other employees, but everyone must have coverage through their spouse or the state. (it's actually very good coverage for a great price). It just kills me that it is not pretax.
So, there are two ways around this problem - change our w/h and send a huge chunk of money to the IRS, or 2. max out 401k, traditional IRA, and HSAs and be solidly in BS4 by 4/15/15 (will be slighly over 15% gross to retirement). If we go with #2, we will also get our tax rate down to 15% from 25%, so it is a good goal. I know how everyone here feels about traditional IRAs :-) but I think for this year we are going to go that route. I am also going to change my W/H on at least the sales job that fluctuates so that should help. That is also the check w/ the available 401k. I am told I can put as much as 100% of my check in, just can't exceed the yearly max.
I'm just glad I looked at this in July rather than in December!! We need to hurry up and save the other 6m expenses so we can get started on this goal!