Death and Taxes

 

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I think we've all heard the famous Benjamin Franklin quote, or at least the latter part of it where he said: "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."

I'm beginning to think there won't be anything certain about taxes until my death.

Every year, I go into the tax season thinking that it should be relatively simple since nothing has changed but soon realize that nothing is the same because things have changed. While it doesn't necessarily make it harder to do the taxes, it does make it harder to compare this year with the previous year to make sure that something isn't off.

I guess with the flooring project being completed, I decided to start on my taxes a bit earlier this year than normal. My parents had fraudulent taxes filed on their behalf once and had lots of ramifications so I try to get my filed as early as I can. To combat this fraud, experts say the first one to file, you or the fraudster, is the most quick and painless option. But when I plugged in all my numbers, I noticed the amount of tax owed was significantly different than last year. Because February was still a week away at that point, and February 1 is the first day I could file taxes anyway, I shelved the project. 

I did start comparing W-2's from this year to previous years. This stems back from a couple years ago when we noticed that things didn't look correct. My wife met with her HR and sure enough, they were significantly underpaying her and had for two years! They of course paid her money do which drastically altered our taxes last year. Thus for the previous three years, it makes things difficult to compare. 

This tax year (actually last year), my wife's company was spun off under new ownership (same overall company) so that means two W-2's to compare to previous ones. 

Eventually, Iowa updated their tax form through TurboTax (the software I use) and the taxes owed looked a lot better but not quite the same, nor did it ask me for some of the paperwork I always input into the software. More research was done and then I found that my state had passed some legislation last year altering our tax code making it a bit more simple. The short version is that instead of being able to file your tax status independent of your federal taxes as either single, married filing jointly or married filing separately, we now automatically have to file the same status as our federal taxes. It has taken me years to figure out that filing "married filing separately" is the best route for our family and now that isn't an option. As a result, our taxes have essentially gone up since we no longer have options to reduce our taxable earning that we used to have. That explained the difference I was seeing.

Finally, two weeks later, my wife and I finally determined that in all likelihood, she is being paid what she earned, something we vigilantly check these days. I am still waiting one form that won't come in the mail for another week and then I can at last file taxes and be done with the problem. 

All told, I have probably spent only four hours of my time doing taxes this year and learned a lot of new things for future years. Definitely worth it compared to the $250 I paid to have H&R Block do my taxes last some ten years ago. She took my money, spent 30 minutes typing my data into her software and collected my check. It was at that point I said I could do the same thing for a lot less and have been doing my own taxes with TurboTax every year since.

But I have a feeling, the only time I will be able to enter my tax information, file them with federal and state within 30 minutes and be reasonably sure they are correct will be the year after I'm dead.