Virginia is one of the lucky states with an annual tax on vehicles. After getting hit with hefty tax bills in the past (almost $1,000 in 2009) and having no money set aside, I finally learned my lesson. In January, I gathered the Kelley Blue Book and Black Book values for both our cars. I saved electronic copies along with filed a printed copy. Since the tax is based on the value of the vehicle I wanted to have some evidence in the off-chance they were overvalued. I used this along with the tax codes to calculate the expected amount of the bill. I think I added some buffer amount of ~$50 too. I set this into equal payments for the 10 months (its due in October). I had ING auto-transfer this amount into a separate savings account so it would all be there when it was due.

I got my tax bill this week and it is $280 less then I expected! I guess I should be upset since it says my car is worth less than I thought. But now I’m able to adjust my monthly savings to the new amount too give me more wiggle room through the end of the year. I am also going to snowflake the extra $280 towards debt. Don’t you love it when things work out?

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