Monday, February 18, 2013

Taxes

I've been slacking on my blog and have completely run out of pre-written blog posts to fill the void that is created with my three post a week habit. That would have meant that the last post about my daughter's illness would have remained on top for longer than I cared for it too. So I am just writing a quick splurb about doing my taxes to fill the void until I can come up with something better.

I used to do my taxes by pencil, calculator and lots of head scratching over a period of a couple weeks of evenings years ago. It worked but I dreaded it. Then I made the decision to go to a tax preparation firm to do it for me it about forty minutes. It was painless and stayed that way for many years. As their prices started going up, I strayed one year to buy some tax preparation software but it didn't do much for explaining things and I felt it was only an automated version of my pencil days except that the head scratching still remained. So I returned to the tax preparation company and continued on. That is until one year their fee for doing my taxes was almost 30% of my refund. Normally I try to owe the government and that was never a problem but when I slip and get a refund, I certainly didn't want someone else to collect it. That was the last straw and I went out and purchased tax preparation software the following year. Besides, my tax preparation person simply entered my information into her computer whenever it prompter her to do so.

That was probably five or six years ago and I have been using the tax preparation software every year since. After the first year which requires a lot of first time entry, it probably only taxes me a couple hours to completely due my taxes with little to no head scratching involved. The programs have gotten very sophisticated about how they function and interface with us people who have to file for taxes for a government with a tax code taller than a several story building when printed out. Best of all, taxes are so painless now that I have extra time to do some digging into new parts of the tax code that I am not familiar with to better understand it.

As expected, this year I didn't do a very good job of withholding taxes so that the federal and state governments both owe me back some money, money they have held onto for the last year and several months and gotten interest off of it. Not much these days thanks to our basement interest rates but still money that I would rather have in my account. Due to my wife's job, she actually works for up to six different companies that write her checks, I lost my job and there were signing bonuses figured into things. I find myself saying for about the fourth or fifth year in a row, maybe the next tax year our income will be straight forward.

So now that my taxes are done for the year and I have officially funded my governments for  yet another year of wasteful spending, I guess I now have the right to bitch about it in upcoming posts. Since my tax bracket went up almost a full percentage point in 2012, I guess I get to bitch a little bit more than last year. Be forewarned!

7 comments:

Murf said...

Thanks for the warning! :-)

I tried a tax preparation software last year (technically their website version, not the software) for the first time after years of having an accountant do it and I was impressed with how easy it was, even down to including a small annuity that I receive. I'm assuming since the info is in place now, this year should be even quicker. I do miss the ol' Telefile where I could do it all in 5 minutes from my touchtone phone.

Ed said...

Murf - If I didn't have a refund coming, I wouldn't have done them so soon.

Perhaps someday we will be able to do our taxes in five minutes again. That would be nice.

Leigh said...

We're still paper and pencil tax doers. Ours are so simple, with nothing to deduct, that it hasn't been too bad. We're tried the online tax services recommended by the IRS, but boy, what a mess they were. One wanted to know when we sold our house for the 1st time home buyers credit, except that we didn't sell it, we still live there. It never would accept that we didn't sell the house. The next one told me I forgot to upload our W-2s, so I had to go back and do it again. The second time around it doubled everything - income and taxes! We haven't tried to purchase a tax program, because I don't thing they have one out for Linux. Nice to hear yours are done for the year.

Ed said...

Leigh - I haven't heard the term Linux for many years! I'm glad to hear that it is still out and about in the OS world.

I haven't tried any of the online stuff. I'm just leery about entering so much personal information to some server that can be hacked.

roaring40 said...

Are the tax people required to point out to you when you've overpaid them. Or do they send you a extortion letter with a number on it leaving you to prove you don't owe them that amount.

Ed said...

Vince - Well the only one you can overpay are the state and federal taxes. The local taxes are exacted upon you when you file your taxes. Once we go through the calculations to show who owes who tax monies, you just request a check if you are owed and the state and federal government sends you the money. There really is never a dispute. If we the taxpayer do not claim all that is owed to us, then the government will only send what we requested. They don't calculate everyone's taxes to see if they did them correctly. Saying that, if your taxes raise enough flags such as large jumps in the amount they owe you between years, etc., they can and do audit people on their taxes and then you have to provide lots of proof that you are owed what you were owed. It is a very painful process and not one that is welcomed. Fortunately, the large majority of taxpayers will never get audited in their lifetimes.

Leigh said...

Oh yes, Linux is alive and well and I'm a dyed in the wool user. I use the popular Ubuntu distro which is very user friendly.