January 30, 2011
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| WORDLE! |
With every 1099 that pops up on my screen, with each box I check off on my list in the “For Tax Filing” folder, my excitement grows. I’m going to get my taxes out of the way soon!
Stacking Pennies and Well-Heeled shared my excitement on Twitter but mostly (or only) because they both knew they were getting money back; I’m a fool who’s just excited to get them done solely to have them done. It’s the excitement of crossing the finish line, and chucking the folder, never mind the penalties potentially associated with filing when you aren’t expecting a refund.
Adding to the weird tingly eagerness is the knowledge that this may be the last year I have a relatively simple tax situation. It just dawned on me, as I was doing the 1099-dance a couple weeks ago, that PiC’s taxes are always still lingering incredibly, disconcertingly late in the year. When I commented on this, he mentioned something about “complicated” and “extensions” and I’m sure there were other words in between but the buzzing of denial quickly set up shop in my brain. Not quickly enough to prevent me from realizing – *sob* – we’re going to have to file together, late, once we get married. (Technically, that should make me savor this last filing, one supposes.)
Now … I’m not saying, that I’m going to put off the wedding as long as I can so as to enjoy as many years filing head of household as possible, I’m just saying I’m going to miss nearly being able to do my own taxes.
To be honest, previous years weren’t entirely my own work. I cheated because I only handled the dry run and double (triple) checking the forms after they came back from the family CPA, but there was still satisfaction in knowing whereabouts the numbers should fall.
After marriage, let’s just say these eyes can’t handle that much crossing and still be good for anything.
Is anyone else happy to deal with their taxes this year or any year? Does the bliss of having them out of the way make it worth the trouble?
December 28, 2009
It’s the end of December, which means tax preparation time! Well, prepping for tax prep, anyway. I like to start pulling together my records early in December to make sure things are all set for this tax year.
This is the first year since 2004 that I can claim Education Credits because I took a couple classes this last quarter. I should also be able to claim the money paid towards next quarter’s tuition since that’ll be paid before December 31st.
The usual two choices are the Hope and Lifetime Learning Credits. This and next year, however, a new player is in town: The American opportunity tax credit (AOC), a modification of the Hope Credit.
Here’s a quick comparison of the credits:
AOC, a modification of the Hope credit:
— The maximum amount of the AOC is $2,500 per student. The credit is phased out (gradually reduced) if your modified adjusted gross income (AGI) is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). Exception. For 2009, if you claim a Hope credit for a student who attended a school in a Midwestern disaster area, you can choose to figure the amount of the credit using the previous rules. However, you must use the previous rules in figuring the credit for all students for which you claim the credit.
— The credit can be claimed for the first four years of post-secondary education. Previously the credit could be claimed for only the first two years of post-secondary education.
— Generally, 40% of the AOC is now a refundable credit for most taxpayers, which means that you can receive up to $1,000 even if you owe no taxes.
— The term “qualified tuition and related expenses” has been expanded to include expenditures for “course materials.” For this purpose, the term “course materials” means books, supplies, and equipment needed for a course of study whether or not the materials must be purchased from the educational institution as a condition of enrollment or attendance.
After all is said and done, the Lifetime Learning Credit remains my best friend. This gives a 20% of the first $10,000 of qualified education expenses you paid. Quick calculations say that I’m looking at a credit between $400 and $500. Of course, these are just rough numbers right now — there’s still a lot of income crunching to be done before I’m ready to file my tax returns for 2009.
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Carnavale!
The last Carnival of Personal Finance for 2009 is up at Gather Little By Little. Mike included my update on investing.
February 17, 2009
1. Positively antsy to get my/family taxes completed. Yes, this is my confession that I did not offficially file my taxes myself, again, this year. Gah. I’ll feel guilty about it later. I did my usual dry-run, and I think I’ve finally gotten things straight. If they match the accountant’s, I’m filing my own next year. *goal set!*
2. Got two ING Direct referral bonuses in the last week, courtesy of Flexo‘s awesome link-sharing policy. Thanks Flexo! [If anyone wants one directly from me, I’d be happy to send you one!]
3. Still waiting to see my check for the truck insurance refund. How sad, just $115. Stinks that they refunded it to a card I canceled, so I have to wait for that card to send me the check.
4. Expect to be doing the same run-around with the insurance refund on the sedan.
5. Food makes everything better: we’re going to potluck next week. This should be good.
September 5, 2008
It’s not anything so nuts as actually running the numbers, precisely. Sort of. I just decided that in the spirit of getting ready to pick up and fly where the winds may take me (am I mixing my metaphors?), it’s more than time for me to get more of my financial paperwork online.
Also, my receipts were all hanging out in a single envelope, and that’s unsightly. While I’m not ready to go all out like FB’s scan-a-thon, oh but I would LOVE to, I did want to get started.
So, I grabbed all my receipts, and sat up organizing them into several categories for the Schedule C portion of my income: Gasoline, Business Clothing, Business Gifts, Cell Phone, Dry Cleaning, Travel and Office Supplies. Then, I opened up a new spreadsheet and a kajillion new sheets on Google Docs. The dates, amounts and any applicable notes for each receipt were recorded in chronological order. It only took about two hours to sort, create, and enter the data.
Now that all of the amounts are in a single place, I can easily PDF the whole thing, and take them to my friend’s house to hang out with his dad and learn how to really do taxes next year.
My next step? Getting a good deal on a scanner and scanning all of the tons of files that I’ve got in my room. Offhand, I have files for:
~ auto insurance, maintenance and registration records for three cars
~ Rollover IRA statements
~ FSA records
~ old BT credit card records
~ airline and hotel rewards membership numbers and information
~ tons of credit card statements from the past few years
~ household bills/statements
~ cell phone records
~ payroll records
~ past three or four years’ worth of tax returns
I could recycle some serious paper!
*Now I’m oogling multipage scanners. I don’t need that…. I need to save money more than I do time. Then again, hmmm……*
April 8, 2008
Surprise! As I was just telling my fellow state tax refund recipient, Ms. M&P, I got a bee in my bonnet and checked my bank account to find that, I, too received my whoppin’-huge state tax refund today!
I had JUST scheduled a transfer of funds from my Citi tax savings account to the Wamu payment checking account, for the federal tax bill withdrawal in two days, so I’m sad I didn’t check earlier today so as to adjust the transferred amount accordingly. Still, I sure don’t mind getting, so I’m not going to complain about making an extra transfer request.
April 4, 2008
This isn’t the first time I’ve pondered this and I’m sure it’s getting old. I’m mulling over the various adjustments I’d like to implement for Tax Year 2008. I know what my annual goal was fairly sensible, but in light of some mistakes made in Tax Year 2007, I need to make some post-Q1 adjustments.
Mistake Number 1: Underestimating the amount of “contractor” income I was going to make.
This led to Mistake Number 2: Adjusting my withholdings drastically to make up for what I thought had been excessive withholding, given my Head of Household status. For the last few months of the year, I was paying very little federal tax.
Had I not received so much untaxed income in Q4, too late to correct the withholding and increase my retirement contributions correspondingly, my estimate of my taxable income and corresponding tax bill would have been just about perfect.
Instead, the effects of the two mistakes above were:
1. I ended up owing the entire amount of taxes assessed on the untaxed income, and
2. My percentage of retirement contributions of total income was significantly lower than it should have been.
3. I think I’m being assessed a $32 federal penalty for not making quarterly payments on that income because I withheld too little. 🙁
Rather than making quarterly payments this year, I’m considering the following:
1. Increase my retirement contributions for the rest of the year to include the equivalent of 30% of the untaxed income.
2. Save 10% of the untaxed income for taxes, instead of the usual 30%.
3. Keep my withholding at 1 and add a small, additional amount per month so that I don’t have to waste time, money and brain capacity on sending in quarterly payments.
I like this plan because I really like watching the balances in my Vanguard account go up (despite the market volatility, it creeps up now and again). I really like the idea of committing to a bit more in the retirement accounts. I like reducing that feeling of false security when I’m holding a lot of cash in anticipation of a tax bill.
Cons of the plan: reducing my take-home pay even more will make budgeting even more difficult. I’ll have to be ultra-careful about juggling expenses because I’m no longer holding out until that next fat supplement check, what I gots is what I gots!
Any cons that I’m missing here?
April 1, 2008
Little of Column A, little of Column B.
Once again, any lingering regrets that I didn’t handle the tax return myself have been dispelled. PaDucky has the forms so I haven’t inspected his work with a finetooth comb yet, but it sounds to me like he’s more than earned his keep. The man has not only magicked the forms to produce a federal tax bill of $1290, approximately one third the total of my own margin-scribbles math, but he offset that with a state refund of $998. Throw in the tax rebate to hit my checking account on May 9th, and you have one happy happy ‘ducky.
Until the taxes have been paid, and the money I’m expecting is in my virtual, grubby hands, I probably won’t believe it. I know that’s weird, there’s no reason to doubt, but I also didn’t have a possible “windfall” to look forward to in the form of my dedicated savings account for taxes. Assuming those numbers are right, I’ll not only have an extra $300 after everything’s shaken out, I’ll have my ENTIRE tax savings account left over. I’ve not only been putting away money to pay taxes in there, I’ve been salting away any little money I’ve gotten, interest money from loans and the like, to keep safer than safe since I knew I wouldn’t touch that account for anything until April 15th.
Now I’ve got a little gremlin in my mind saying, pssst! That’s all windfall, ‘ducky! What’re you gonna DO with it?? I’m pret-ty excited…. so I’ll definitely take a few days to decide how this will be divvied up. E-fund? Mini e-fund? Car fund?
**I was putting this post together before the car thing. Talk about counting your ducklings ….**
