Today I made a budget that makes me happy. It has my new salary (now that I’m working full time) and my husband’s salary divided proportionately between all our little categories. Since I will finally have some wiggle room, I can have categories such as “recreation” and “charity”. While the budget will go into effect on Jan 1, 2008, the ultimate goal is to pay $0 in taxes.

The most I’ve paid in taxes was 6 something percent of gross salary in 2005, and it really upset me for a variety of reasons. Since then, I read up on ways I can legally reduce my taxes without feeling deprived. My favorite initial resource was the DON Method (Don’t Owe Nothin’). Last year I paid 1.23% of gross income in taxes. This year I am expecting to pay $0 in taxes nor get a large refund. I might get a bit of a refund for education credits. I used the IRS withholding calculator to aid me with adjusting my withholdings. Since I can have a Roth IRA in conjunction with a regular retirement account, I plan on funding it as much as possible with the goal being the limit of $4,000. But first I need to open one. To date I’ve been contributing toward retirement just enough to get matching contributions from my employer. I plan on opening a roth IRA account as I would like to max it out every year from now onward.

Of course I should admit that doing my taxes is one of my favorite annual activities. And I can’t wait to do my 2007 taxes. Nor can I wait to implement my 2008 budget.