So, I honestly thought we would be better off this year, but what I didn't realize is how much more money we actually made this year. Our situation is a bit complicated, DH owns his own business and since it's an S-Corp he gets paid hourly wages but those are basically what any other laborer would get paid. We pay FICA on wages only and the rest of the profit from the business is treated as other income on our federal 1040. This is great until it comes to calculating the additional child tax credit (the refundable portion). Since they know you didn't pay FICA on the majority of the income then they limit the refundable credit to a certain percentage of your wage income. Last few years we actually qualified for the earned income credit and since we made about 20k more this year, we did not qualify at all. So long story short, our taxable income went up 20k and our net taxes for both federal and state came to a $300 credit. I should mention we have 4 kids that all qualify for the child tax credit. Last year we made 20k less and our net tax was a $1700 credit.
We live in MO which is a very affordable place to live (our 1500sq ft house on 3 acres cost us $112k back in 2013). Our AGI this year was 68k compared to 48k last year (We had some business equipment we bought last year that qualified for Section 179 which is why our income was a bit lower, plus we had higher overall revenue this year). We have no other debt besides our house, so our bills are low, which is why we can afford to live off such a meager income!