Balancing 401k to Deductions

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We owe Uncle Sam some money this year.  We stopped claiming our younger two daughters as dependents on our Taxes this year.  Unfortunately, we didn’t make any adjustments to my withholding earlier and now we’re paying the Tax Man.

tax-manIt’s too late to do much about the 2012 taxes, except maybe add some to our IRA.  However, what we need to balance now is how make some adjustments for 2013.  The two choices I see are:

1.  Increase our Federal Withholding to we pay Uncle Sam more money for him to blow, or

2. Increase my 401k contributions.

As you might guess, I’m pretty certain we’ll do #2, but I need to figure out how much to increase and not get to the point where we get money back from IRS next year.  Since we’ll be eligible for Catch-up Contributions this year (a nice benefit to turning 50), we have some room to add.

I’ll keep everyone posted on how things go with this.  In the meantime, if any of my readers know of a good site to help figure this out, please share in the comments.

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