April 11, 2016
Life, death, and taxes, my friends. But unlike the other two, taxes happen on schedule every year.
And this year, boy o boy am I not so ready.
Life doesn’t discriminate
Between the sinners and the saints
It takes and it takes and it takes
And we keep living anyway
– Wait For It, Hamilton
In 2014, I started using a CPA to put together the return itself. I still compile all our financial documents and a spreadsheet listing everything, including our itemized deductions, so really the CPA just has to plug the numbers in and advise me on the trickier parts like the investment property.
It feels absolutely silly in retrospect to feel guilty over hiring it out but it was hard to fight the feeling that as the Family CFO, I was abrogating my responsibility by doing so. Of course I could do it myself but I don’t have that kind of time to spare, and the headache was getting to be too much. See? Even now I feel like I have to justify the decision.
Never mind. This year, I’m extra grateful for making that decision because what we’re looking at would have been much worse at the butt-end of 20 hours of tax agony.
It’s a long story, and I can’t get into the specifics of it, but we have an on-paper only “income source” from a family thing, from which we don’t derive any true income. This year, there was a huge one-time income bump that we wouldn’t see but, of course, would impact our return. I knew we’d owe something. That part I was braced for.
The other part, the first draft of the return, staggered me. No, let’s be honest, it knocked me on my ass. Might have actually stopped breathing for a few solid minutes.
We would have had a modest tax refund this year from both state and federal. Instead, the bill totals up over $13,000. It’s not that we failed to pay quarterly taxes, this is truly a one-time thing, and it won’t be a problem going forward after this year. That’s cold comfort in a cold spring, but payment is due on April 18th this year, so, yay grace period?
We’ll have to use our long-term savings to pay that sucker, which sucks, but at least we can swing it. Meanwhile, let me sit down and put my head between my knees until the world stops spinning.
Have you filed? Are you likely to get a refund or a bill?
*Part of Financially Savvy Saturdays on brokeGIRLrich, Disease Called Debt and I Am the Future Me
April 10, 2015
Every single year, no matter how organized I think I was the previous year, I wasn’t. Then I’m having to dig for hours to find and sort all the necessary documentation for my tax filing. This year’s even more complicated than last because we have rental property in the mix, so I was determined not to repeat a decade of errors.
This year, finally, FINALLY, it seems like I might have developed a good system.
Throughout the year:
I keep a running spreadsheet of rental property income and expenses which will be matched against the property management company’s 1099.
I keep another running spreadsheet of all deductible expenses as they’re incurred: mileage, non-reimbursed business expenses, donations.
At tax time:
I save all files with category information. For example, a 1099 from Ally Bank would be named: Income 1099-M Ally Bank.pdf. A donation receipt is saved as: Deduction Donation Goodwill 01-09-15.pdf.
Sorted by name, all my income and deduction forms will naturally group together, and I can easily combine them into a single PDF if necessary.
One spreadsheet to organize them all!
I match all the forms and receipts against my running spreadsheet and then pull that information into a Summary Spreadsheet for the tax year. I also compare this to the previous year’s Summary to confirm everything’s there, or if I forgot to download Bank of HadAGoodBonus’s 1099-INT form. Our banking changes year to year but not a ton so this is a good way to double check.
Any relevant notes about life changes and people-related information are included in that spreadsheet: names of people filing and our dependents, any changes from the previous year, etc.
Since I recently started using an accountant for all the legwork, my concession to the value of my time, it’s been even more imperative to make sure all the information is there and easy to understand. I generally catch a minor mistake or two when I review any prepared taxes, mine or otherwise, so my very detail-obsessed brain knows that I shouldn’t be handing over a virtual shoebox of receipts if I don’t want a horked up return filed.
Alas, it’s to be another extension for us this year, but I have hopes that next year we’ll be filing by Jan 30th, just like the good old days!
:: Do you have an amazing organizing system? Tell me all about it!
April 7, 2014
I declare a Minor Victory. After wading through 20 forms and itemizing deductions for home, charitable deductions, expenses and so on, I’ve finally gotten the taxes sorted enough to file for our extension. Maybe a numbing effect sets in after the first several hours, or the pain is so unbelievable that you entirely forget what it was like, much like how I’ve heard childbirth described. No kidding, that was torment stretched across 3 weekends and I’ve only just bought us a reprieve until October. On the bright side, I always forget that California grants an automatic extension so all that pain was for federal taxes.
While looking forward to working with a good tax preparer/advisor, I get that weird “I have to pre-clean for the housecleaners” feeling. You know what I’m talking about, right? Friends who had housekeepers/housecleaners (or still do) always spend half a day picking up in preparation for people to come clean. It totally baffles me. But Moom inspired me to sort all the just-about filed paperwork so it’s not a file folder chock full of confusion; everything’s scanned and itemized in a spreadsheet now.
This is the second year I’ve used TaxAct and around Hour 13, I started wondering what possessed me to use them again. The relief of being done with taxes must have overcome all memory of my frustrations in using the software last year. Since I’d already committed, I rationalized that this was just my way of being fair, that the frustration really had to do with the software, not just doing taxes.
Let’s be honest, there was a lot of that frustration:
1. Filing an extension requires an estimate of your tax liability and payment by April 15th. Slog through the entire filing process and then send in Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
2. Finally filing again in October (instead of January or February at the latest) when the last straggler Schedule K comes in: Form 1040; Schedules A-C, SE; Form 6251; Form 2106; Form 4562
3. Filing amendments because the last straggler Schedule K was wrong – Forms 1040x and 540x.
Human error aside, the linear-but-NOT interface was terrible
TaxAct walks you through each of the forms, start to finish, via their questionnaire. Answer yes to this or that question and it opens up the relevant form. This works if you have all your information at hand, organized, and ready to be flipped through.
The problem is, you can’t easily skip certain questions and then just use their “Back” button to weave your way back up the tree. Go backwards that way and you’re liable to find yourself up a creek instead, lost in some random cul-de-sac of form questions, or rowing your way through a whole series of questions that aren’t the direction you meant to go.
New Stuff
When you have a number of new forms or situations to work into the picture, it’s not necessarily intuitive when you should be adding which forms to which sections if you only know which Schedule it should appear on but not much else. I ended up adding and deleting forms multiple times trying to get things into the correct sections/sequence. It wasn’t until the end where I found the summary page for either the Income or Deductions section where it was much easier to fill things out piecemeal; and I still couldn’t tell you where to find that.
Once I further complicate our financial lives with other investments, I won’t have hair left to pull out while doing taxes. Another vote for hiring a pro!
Stupid inconveniences
If you’d, say, spent 4 hours working and turned your attention away briefly, you get logged out. It saves your work, of course, but when you try to log back in, there’s a 30% chance it’ll decide that you disabled cookies (when you didn’t) and insists that you have to accept them again (but I DO!). It’s an annoyance but let’s be honest, every minute wasted trying to do taxes is as frustrating as those minutes and hours spent actually working on them.
Honestly, the software’s probably halfway decent but for the amount of time I had to waste figuring it out, or figuring out where information should go because they failed to provide enough information, I won’t be using them again.
April 17, 2013
We’re a little more than three months into living on a combined budget. And even though this is the first time PiC’s lived on such a detailed budget, we still seem to be doing sort of ok.
I say “sort of” because:
+ we’re not fighting tooth and nail over living by a budget (yay!)
+ we’re not fighting over anything budget at all (yay!) (yes, I assume there’s going to be some amount of disagreement and conflict when you’re learning to live in new boundaries)
– we’re not exactly ON the budget in some places (boo!)
– we still need to discuss how to offset some of the early spending highs (boo!)
It’s a wash, as far as operations go.
As far as execution … we’re having a touch of trouble staying in our budgeted amount in certain categories and not yet doing a good job of pulling back in specific areas to make up for it. This goes against the grain. I’m a money hoarder and I would much rather spend on the low side of any budgeted amount throughout the year and have some left over. This is, of course, not PiC’s style. 🙂
Nearly four months into the year, I’d expect that our spending should be at about 33% of the budgeted amount across all categories. I’m seeing spending as low as 3 and 7% (less regular/essential categories) and as high as 47 and 53% (ahem someone’s allowance).
Overall, though, we only went over our monthly total once in the last three months and the monthly averages are very close to what we expect to be spending each month. That helps ease the sting of what feels like budgetary failure.
Management is….
a bit complicated right now: we primarily use my American Express, and his Southwest Visa when it’s a non-American Express establishment. Then we have the odd cash or check expenditures. It all gets tallied into a spreadsheet on a (we try) weekly basis.
We’ve also finally opened a joint checking account to pay the bills from so that’ll help smooth out the problem of taking it turnabout to pay bills. And, happy day! I may be able to start closing out some of my other banking accounts. I’ve got accounts across four banks right now.
Admittedly, I’ve been refusing to close my oldest checking account because it’s the one I opened when I first turned eighteen and was allowed to open my very open checking account. (PF sentimentality!) And I enjoy the freedom of having the choice of accessing ATMs for two B&M banks… but considering I have two branches of the other bank nearby and go to the ATM about 6 times a year, that’s not a good reason.
Observations …
We eat a lot. Or rather, we spend a hell of a lot of money on not terribly fancy food. We don’t even buy beer (except once in several months), we only get basic (but good IMO) cheddar, we have a regular rotation of relatively “cheap” food & recipes around things like whole chickens but it’s more than offset by the handful of convenience foods that we buy for my fibro-body benefit.
Saving Money …
I’m over the moon about changing our cell phone plan with T-Mobile. SingleMa and I got into a conversation on Twitter about cell phone plans. Next day, we found the new contract-free plans and each saved a ton! She reduced her bill by $40/month, ours should be less by $50/month. Woot! That annual $600 will go a long way to making up for buying a new phone a bit earlier than I wanted to. I hated dealing with the nonsense of their customer service which has gotten pretty iffy these past couple of years. It used to be rock solid but not so much anymore. A shame. I also finally sent in Mom’s death certificate to cancel her phone line, something I’m trying to be totally pragmatic about but I have to admit gives me a bit of a pang.
And after a couple months of paying too much for internet ($43) when our last promotion lapsed, I surfed AT&T’s promotions for Internet without a Phone Line while signed into my account and lo! They still pulled up the cheap-cheap plans! I experimentally put it in my cart, put the live customer service chat on, and found that I could indeed switch to the $20/month plan without cancelling service. Check. That. Out. AT&T, making life easy for an existing customer. Unbelievable. And I love it.
Total to be saved this year (8 months of each line being cheaper): $400 + 160 = $560!
Tax Time …
We got bitten by AMT this year. Sonnuva … it wasn’t terrible, insofar as the money’s concerned. My headache was another thing entirely, trying to learn everything specifically relevant I could about AMT on the fly. There was definitely cursing associated with this year’s taxes.
I managed to get all the forms in for an April 14th filing but then found out afterward that one of the forms was an estimate and the “responsible” (@$$shole) accountant didn’t bother to say so until well after the fact. Again: cursing. Bitter? Yes. Now I have to file amendments for this year as soon as those new forms are in. Another hour and a half of my life re-committed to doing unnecessary taxes. Still, the bulk of it’s done and that’s something to be grateful for.
::How are you folks doing with your money these days?
June 27, 2012
This is the tax season that may never end.
It was probably between lines 35 and 37, estimating our 2011 taxes. I was writing in another set of numbers. And before the reason fully settled in, I felt the full force of idiocy wave through my system.
My first mistake on my taxes and a whole filing year had passed.
I’d forgotten to claim my brother as a dependent for tax year 2010.
I could blame it on any number of things: Sheer carelessness, rushing through the taxes, not double checking my work, filing in a new home, or just plain being so mad at him he was financially dead to me.
Fact remained, I was an idiot.
And I had to meet Mssrs. 540x and 1040x.
For the record: If you’re not a neurotic fool, *ahem* you will read the instructions first like a normal human and find that it’s not actually all the difficult to fill out a correction. Twice. Once for state and once for federal. Because let’s face it, when you screw up claiming a dependent, you will have screwed it up on both.
In total, if I hadn’t gone back and spent too much time doing it wrong the first pass for three hours fussing over unnecessarily recreating the previous tax form and then taking a second, sane, pass at 30 minutes per form getting it right, I would have forever lost more than $3000.
The I.R.S. has already paid me back with a gentle nudge of a correction because I made a math error but they didn’t hold that against me and cut a check anyway.
The state of California still hasn’t paid ten weeks later, giving me a financial noogie, to rub it in that much more.
Bonus Round
To extend the pain cycle, I couldn’t even finish up our 2011 taxes because: We. Are. Still. Waiting. On. A. Schedule. K.
Hello, Filing for an Extension. For the first time in thirteen years of employed life.
No, I’m not bitter that I’m still not done with filing taxes in July, when I’ve always been done with taxes/FAFSA by February 2nd, why do you ask?
I’ve booked time in August to file the dratted thing. [Long dramatic sigh.]
Welcome to married life! Whereupon you hitch your star to the other guy and you apparently can’t do everything on your own time anymore. Apparently. *chagrined grin* No, obviously I’m not perfect. I just have my thing about getting taxes done by a certain time and we are oh-so-very-late.
October 9, 2011
After some grumbles, I set myself to the task of filing PiC’s taxes yesterday.
I was annoyed at first because, well, it’s October. I’m a February Filer. Different philosophies. He had to wait for a Schedule to come in that didn’t arrive until September, so he had a reason but it still gets under my skin to be doing last year’s taxes at the point when I’m already thinking about next year’s.
Setting up the account was nearly impossible – I couldn’t get the page to accept a password. Fifteen minutes of error messages.
Finally, I got into TurboTax’s guts and we were off to the races.
Income
I had a whole pile of forms and shuffling through them, nothing was terribly complicated.
I did hate on Wells Fargo for a minute for sneakily combining a 1099-Div and a 1099-INT onto the same page, though – I like order and since I was inputting the forms by type, that interrupted my flow. And they had this whole “see Details” thing going on for a few boxes. You’d obediently flip to the Details section and it’d show you … nothing. THANKS.
(In my New Order, I’m banishing Wells Fargo. Especially since they were such a waste of time.)
Deductions
This was fun. {evil laughter} The know-it-all came out. I had a couple items in the pile from PiC, and then made out my laundry list of things I knew he should have deductions for that he’d missed.
His proof of charitable deductions were missing, for one thing. Property tax, mortgage interest totals, car registration.
And then upon review, I was mortally certain, without actually having seen his property tax bills during the year, the total he gave me was still too low and sent him back again for another look. Right-o, there was a supplemental tax bill he’d been dunned for, more than $1000, and had forgotten about. That put nearly $500 back in his refund.
Analysis and Completion
Clearly, he wasn’t taking the standard federal deduction.
I think his CPA was shortsighted for telling him to send in a chunk of additional tax money this year for state taxes, assuming he was going to owe just as much in 2010 as he owed in 2009. Did the CPA not consider that he was going to be paying a full year’s home interest and property taxes? That seriously affects your AGI! Think this through, my good fellow. When your state refund is twice and more what you paid in quarterly taxes … *smh* There was no real good reason to do that, is what I’m saying. He wasn’t in danger of an underpayment penalty at the end of 2009, and he wasn’t going to owe at the end of 2010 as much as he did the prior year.
Filing
I’d snagged him a fantastic prepaid code for both state and federal, saving him $140 on both filings. Did him one better than my own, I even had to pay for my state filing!
One Day, One File
It didn’t take the whole day, but we finished his taxes on the Saturday I started them. I had him review it with me at the end to make sure he understood everything that I did and all the notes I had. I’d initially complained that doing his taxes weren’t any fun but halfway through I was a liar because I was having fun again.
I could actually enjoy doing this for other people, now that I’ve gotten past my initial weirdness of not having the fully organized, spreadsheeted, noted, checklisted pile of forms to work from. Maybe I’m not quite ready for the shoebox of receipts thing but, you know, I could deal with the less organized anyway.
March 23, 2011
My part of Tax Season came and went with surprisingly little fanfare, after a fashion.
I used a free code for TurboTax to file my federal tax return online after finding out that there were several complications with my family’s information that has effectively left me out in the cold. I was hugely frustrated, enough so that I couldn’t even really talk about it.
It will cost a substantial refund but there is nothing to be done about it and dwelling on the lost saving or buying power does no one any good.
March 9th and 12th welcomed early, modest, refunds from both federal and state, and that whopping $700 will go toward the wedding and insurance payments, by halves.
Nothing like the lovely mistake Stacking Pennies made but survivable.