A few weeks ago I filed Benjamin’s taxes. Given that he had virtually no income, no deductions, and no credits, and only one IRA conversion his taxes were very simple. He didn’t get anything back, but that isn’t surprising since he didn’t pay anything all year either. I was glad to get his taxes done so I could fill out his FAFSA as early as possible.
I’d been holding out on submitting my taxes for weeks now anticipating getting a 1099-B in the mail showing me information regarding the RSU sale to cover transaction that occurred last year. I finally called Smith Barney yesterday to discover that the RSUs were done in a withhold to cover instead of a sale to cover transaction which the agent said didn’t require a 1099-B. After a bit of searching online I came to the conclusion that you don’t need a 1099-B for a withold to cover because you don’t sell the stock, per se, but when the RSUs vest the company withholds some of the stock back and “swaps” it for cash that they pay on your behalf to the government for the taxes. At least that’s how it looks on paper. Unlike the excellent tax information I was able to find for RSU sale to cover transactions, I didn’t find much at all for withhold to cover telling me that either it is more rare than the former or just so intuitive to everyone else that I’m one of the few that didn’t grok it immediately.
Anyway, with that one remaining piece I was able to submit my taxes last night. I’m getting a couple of grand back from the federal government and about $800 from the CO state government. The state refund has me shaking my head. Last year I had to pay something like $300 to the state and that was for a partial year. Putting pen to paper I calculated that due to my self-employment I was going to need to make tax payments throughout the year for 2008. I proceeded to send 4 quarterly payments of $242, only to have almost that entire amount refunded to me. The big miscalculation? The offset provided by the mortgage interest of the new house. Nothing like providing the government with an interest free loan for an entire year.
So I expect to get my refund from the Feds and the CO government here within a few weeks — just in time to send it to the Denver Tax Office for our 2008 property taxes!