Forum: Adults / Money Matters

Money Matters
Happy US Tax Day!
By kandykanePremium member Comments: 16415, member since Mon May 01, 2006
On Mon Apr 15, 2013 11:00 AM

Everybody got their taxes all done? I do the taxes for the whole family and I have everything done (finally!) for everybody except for one that I am filing an an extension today. That is the only one that had anything owed, the rest were refunds or zero outs.

Any plans for refunds? I took a short vacation and the rest went to pay my daughter's spring semester at college.

kk~

19 Replies to Happy US Tax Day!

re: Happy US Tax Day!
By PinUpGirlmember has saluted, click to view salute photosPremium member Comments: 25878, member since Tue Jul 16, 2002
On Mon Apr 15, 2013 12:04 PM
My taxes were filed back in early March. I didn't get much of a refund this year, but I also made more than I've made in my life last year. I'll take a higher salary over a bigger tax refund any day of the week.

Incidentally, it's my friends' wedding anniversary today, too. :D
re: Happy US Tax Day!
By Louisemember has saluted, click to view salute photosPremium member Comments: 17315, member since Thu Jun 06, 2002
On Mon Apr 15, 2013 12:10 PM
Do you guys have to do your own taxes even if you're someone else's employee? Here it's all done for you unless you're self-employed or have other untaxed income like property, an inheritance, freelance work etc.
re: Happy US Tax Day!
By Niennamember has saluted, click to view salute photosPremium member Comments: 6776, member since Fri Oct 07, 2005
On Mon Apr 15, 2013 12:27 PM
^Yepppp . There are businesses you can take your taxes to and they'll help you work them out, or people have accountants that will help them, but your employer doesn't file taxes for you.

I'm lucky enough that my dad is has a degree in Math and Accounting and my mother-in-law-of-sorts has a Masters in Math, so I just send everything along to them. :D
re: Happy US Tax Day!
By Louisemember has saluted, click to view salute photosPremium member Comments: 17315, member since Thu Jun 06, 2002
On Mon Apr 15, 2013 12:40 PM
Madness, here it's just deducted out of your wages every week/month. You don't even see it - it doesn't even make it to your bank account. I've had a minor nightmare recently trying to file some untaxed income from a bit of writing I do and that was bad enough, can't imagine doing everything!
re: Happy US Tax Day! (karma: 1)
By ChristinePremium member Comments: 6815, member since Wed Feb 04, 2009
On Mon Apr 15, 2013 08:30 AM
Edited by Christine (207347) on 2013-04-15 08:32:34 fix markup...I hope
It would take two pages of unproductive ranting to express the depth of depression and frustration I am experiencing at the moment regarding the annual April 15th blood letting.

Image hotlink - 'http://ronestudio.files.wordpress.com/2011/07/uncle-sam-death-and-taxes-unlce-sam.jpg?w=584'

I think I'll just write the stinkin' tax check and dance while I clean the kitchen.


Keep On Dancing*
re: Happy US Tax Day! (karma: 1)
By d4jmember has saluted, click to view salute photosPremium member Comments: 12490, member since Fri Aug 27, 2004
On Mon Apr 15, 2013 02:54 PM
Every year for over twenty years we have had an accountant do our taxes. We tried to save some money this year and go with a national chain. BIG MISTAKE. Total bait and switch operators, tried to charge us a thousand dollars. Oh did they get an earful and we refused to pay. They finally negotiated with us and we got it down but it was still more than we paid for the accountant. If we didn't have to do complicated things like depreciation schedules then I maybe would attempt to do them myself. But we are two self-employed people with a kid in college and that's a lot of tax crap to go through. We'll be going back to our accountant next year. I told her what happened and that I learned the hard way the value of her services and the trust we have in her.
re: Happy US Tax Day!
By kandykanePremium member Comments: 16415, member since Mon May 01, 2006
On Mon Apr 15, 2013 09:18 AM
Edited by kandykane (157761) on 2013-04-15 09:21:59
This year was more complicated than any I've ever filed before, but I still managed to get through it without an accountant. I use Turbotax and while the price has gone up, it's still a valuable tool. Next year should be easier. If nothing changes with the kids, I'll be able to file theirs without the service next year and save them the fee. Well, for two, the third is considered self employed (dance teacher) so her's involves a lot of itemizing. It's a good thing she can take off her mileage. Wow, she almost zeroed out right there, even without her clothing and music costs. The girl drove over 10,000 miles for work last year. And that doesn't include her commute to school.

kk~
re: Happy US Tax Day!
By Moonlitefairy06member has saluted, click to view salute photos Comments: 7177, member since Fri Apr 16, 2004
On Mon Apr 15, 2013 05:19 PM
My parent's accountant did it for me even though I'm in a different state than them which was nice. This is the first year where I've been constantly employed and not doing just summer jobs or unpaid internships. I randomly owed $101 in state tax to Virginia (my coworkers owed varying amounts too so I guess the employer is messing up somewhere when taking money out of paychecks). But I'll be getting over $1000 back from the feds. I won't be doing anything special with it, just using it to pay the rent but it'll be nice that I won't be losing any money to pay rent as my bank account is kind of sad right now. I filed about 3 weeks ago, hopefully the money comes in soon!
re: Happy US Tax Day!
By Moonlitefairy06member has saluted, click to view salute photos Comments: 7177, member since Fri Apr 16, 2004
On Mon Apr 15, 2013 05:39 PM
Just saw this on BuzzFeed: What it's like to file taxes when you are young and single. It's pretty funny.

www.buzzfeed.com . . .
re: Happy US Tax Day!
By YumYumDoughnutPremium member Comments: 8688, member since Sat Jul 10, 2004
On Mon Apr 15, 2013 06:05 PM
I finished my taxes a couple months ago. I owed couple thousand in taxes, but because of my educational credits,I ended up roughly breaking even. I now cry for next year, p because I won't be a full time student.
re: Happy US Tax Day!
By Chaconnemember has saluted, click to view salute photosPremium member Comments: 6359, member since Thu Jul 12, 2007
On Mon Apr 15, 2013 12:59 PM
Edited by Chaconne (182529) on 2013-04-15 13:07:32 tweaks for clarity - As if US Tax Law were clear.
Louise wrote:

Do you guys have to do your own taxes even if you're someone else's employee? Here it's all done for you unless you're self-employed or have other untaxed income like property, an inheritance, freelance work etc.


Our employers and some other sources of income such as cashing out an individual retirement account or investment income, WITHHOLD payments to the government and send them to the government on a continuing basis. For most who are employees, it is at every payday, be it weekly, biweekly, or monthly.

The big fizz about April 15th, the tax deadline for most Americans, is that is when you file a tax return with the government, it is simply a reconciliation of your tax accounts for the previous year (for most...some people can declare a different fiscal year, few do.)

There are too many variables in individual tax situations because of our tax code. Deductions are allowed for state taxes, for mortgage interest. People can defer some taxes by setting up an Individual Retirement Account. You can set up educational trust funds for college. The tax code here is often a vehicle for public policy...e.g. the government wishes to encourage home ownership, so people get a deduction for mortgage interest. The government wishes manufacturers and investors in certain areas to buy new equipment, so people are permitted to amortize the cost of equipment used in businesses. The government wants investors to build apartments (this affects me as I am a landlord) so when I bought a rental property I was allowed to depreciate that over a set number of years. People get deductions for child care required so a person can work...and on and on.

The US Tax Code runs to some 5000 pages. It is very complicated. There are law firms who do nothing but tax cases and the same is true for accountants. There are also Tax Courts who only adjudicate tax issues.

The government has been collecting taxes all year long in the form of withholding; or, for some, by quarterly payments. People also have exemptions and if you are over 65 you get two exemptions. We also have separate state and local income taxes. We have many other taxes too which have different deadlines such as property tax. Those are all local taxes entirely separate from federal tax. Local income taxes are usually filed on the with the same deadline. Many people (such as me) actually filed out taxes much earlier...today is simply the deadline to file a return without being penalized for filing late.

Once we file a return, it could be subject to an audit. Most people do not get audited, and for the most part Americans are pretty good about paying taxes, unlike, say, Greece or Italy where evading taxes seems to be a national sport. Our revenue service is rather effective in enforcing our tax laws. They do use algorithms to check for tax evasion. A person with $40,000 income is unlikely to give $20,000 to charity, for example. That person would face a high probability of an exhaustive audit. A gross willful evasion of taxes could get you a prison term. Most just get fined and are still obligated to pay their taxes.

Beside taxation at the national or federal level, each of the 50 states has their own rules for a separate income taxation as do many communities. (In my state, the state collects the tax for the local entities.) There are 5-6 states that do not have an income tax, but they have other way to "getcha."

If this all sound confusing, it is. We have a whole industry of tax preparers. Large corporations have departments of accountants who do nothing but deal with taxes. Many private citizens, and I am one of these, use computer programs (TurboTax is the most famous one) into which we plug in the all the numbers and the program does all the calculations and prints out the form. I can file my return directly from the TurboTax program and it electronically goes to the taxing authorities. During January, Americans with wage income get a statement from their employer, called a W-2 which states the total wages earmed for the previous year, how much withheld for taxes, health insurance, etc.. Those, like me who non-wage sources of income. My wife and I get a form for our pensions, my wife's social security (yes we have to pay taxes on that, too), income from investments, private pension plans, etc. The two of us had 23 1099 forms last year, but as retirees we no long get wages, we do not get the W-2 form.

So with all these permutations, there is no one-size fits all tax scheme. If a person were a perfect financial planner, at the end of the year, they would owe no additional tax, or be entitled to a refund from paying too much into the system. Few people could do that with that degree of precision. Most people have a bit more withheld so that they will not be in a penalty situation, which over a certain amount could result in a fine. That I why you hear Americans talking about their income tax refunds. That overpayment is actually a "free" non-interest loan to the government, so while most people like these refunds, on a personal finance basis, having too much withheld so you get a refund is a bad idea. While I keep up with my finances pretty closely, I can't micromanage it to that degree. Also situations intervene which can alter a person's tax situation. My mom died late last year, and I received a modest inheritance I knew I might get some day, but could not predict when. This altered my entire tax situation for last year.

So I hope that explains to non-USA people why we fret so much about April 15th tax day and why it is not very cut and dried.

Jon
re: Happy US Tax Day!
By majeremember has saluted, click to view salute photosPremium member Comments: 5889, member since Sat Sep 29, 2007
On Tue Apr 16, 2013 01:00 PM
I did mine a while ago, and already received and spent my refund.

At work for the past few days people kept coming in to get extension forms. Over the past few months people were mad that we ran out of the 1040 instruction book.
re: Happy US Tax Day!
By Chaconnemember has saluted, click to view salute photosPremium member Comments: 6359, member since Thu Jul 12, 2007
On Tue Apr 16, 2013 02:05 PM
^I did mine in February and like majeur probably spent the proceeds.

The bad news...I owed the feds $900. Much of that caused by the late-in-the-year inheritance and the first year I was required to withdraw from my IRAs.

The good news, I got $2500 back from the state/local (the state collects the local surcharge.) Our state has some pension exclusions and special stuff for people over 65. Our state also does not have the "marriage penalty."

Some number of years a co-worker, a brilliant girl who also was a CPA discovered the "marriage penalty" built into the US tax system. (Don't ask me to explain...I haven't figured it out yet either.) So every year around Christmas, she and her husband would go to Haiti and get a "quicky" divorce so they were divorced at the end of the year. They'd come back, file their taxes as single people, and get married again. They did this for about 3-4 years and actually got coverage in the supermarket tabloids for this stunt. Finally, our agency, employer to both of them (and me) told them to stop this or get fired. They both had security clearances and people with clearances are supposed to avoid notorious acts. This was in the 70's and I presume they stopped doing this as they were still around late in my career.

I think Congress fixed some of the more egregious aspects of this anomaly. (To quote David Stockman who was President Reagan's Budget Director "Nobody really understands all these numbers." If the president's budget guy doesn't understand, how are we supposed to? I'm supposed to be a rather bright guy and I haven't a clue. LOL)

Jon
re: Happy US Tax Day!
By Gioiamember has saluted, click to view salute photosPremium member Comments: 3024, member since Sun Jun 20, 2004
On Tue Apr 16, 2013 09:42 PM
I never thought about posting this here until it was too late, but still posting in case it helps anyone for next year. You can go to www.irs.gov/freefile and get access to programs (like Turbo Tax) to use for free to efile your taxes. There are a few qualifications, mainly income related, and then you are provided with a few options. You must go to the irs website first and click on the link (you can't, for instance, go to the TurboTax website first and fill out the forms for it to be free). For a lot of people on DDN who are maybe still in college but filing themselves, or maybe just out of college and still doing a fairly simple tax form, this is a really great service. In addition, anyone can fill out the blank forms online and efile as well. I am one of those weirdos who likes doing my taxes myself, as I learned to do them on paper when I was in college.
re: Happy US Tax Day!
By Chaconnemember has saluted, click to view salute photosPremium member Comments: 6359, member since Thu Jul 12, 2007
On Tue Apr 16, 2013 10:19 PM
I have done my own taxes since I have been on my own out of college. (A CPA friend of our family did mine before that gratis.)
I think it is a good idea to know how to do your own taxes even if you go to a service. Of course I had to do them long before there was a TurboTax...or even household computers of every kind. Doing you own taxes is a good idea because you will have to research just how the process works. You will gain at least a yearly understanding of your own net worth. By being able to do my own taxes and being able to understand the process, I can also make financial decisions with the tax consequences of those decisions being another factor in the decision process.
One should, at a young age, learn how to handle money and understand basic concepts such a banking, mortgage and interest, personal financial strategies, credit cards and their costs...and actually crank out the "what if" numbers. It will also attune one to the whole idea of the governance behind taxation and at a minimum be proactive enough in the process to at least vote. People who are upset with taxes, or the government, but do not vote gain no respect from me.


Jon
re: Happy US Tax Day!
By SaraTheGrouchmember has saluted, click to view salute photosPremium member Comments: 8600, member since Thu Apr 17, 2003
On Wed Apr 17, 2013 03:12 AM
I keep my deductions low, am a full time student, and don't make much, so I always get money back. I got a good bit this year. It went to the down payment on my new car :)
I also filed my taxes, with the help of a free tax preparer person, a few months ago. Literally like a week or two after I got my W2s. I hate waiting and rushing. And my father who's an accountant and had done my taxes in years prior always waited til the last minute. Not this year! I had them done and over and refunds in hand in a two week period. Best turnaround for the government yet!
re: Happy US Tax Day!
By kandykanePremium member Comments: 16415, member since Mon May 01, 2006
On Wed Apr 17, 2013 04:38 AM
I had to wait this year to file my return (and my son's) due to changes in the tax code, specifically education credits. The IRS had not updated their system til late February. The other returns I prepared were not getting a refund, so there was no point in hurrying to get them done early.

I only filed one 1040EZ, that one was easy. That 1040 long form can be a pain, especially with a handful of 1099s and 1098s.

The first time I filed my daughter's self employed status was a learning experience. This year her situation had not changed, so it was just a matter of refreshing my memory. She was smart and saved all her receipts throughout the year and kept track of her mileage.

kk~
re: Happy US Tax Day!
By LingScot Comments: 1036, member since Sat Apr 09, 2005
On Wed Apr 17, 2013 10:10 PM
I have always done my own taxes, but things were complicated this year, and I decided to go to a "professional" company. Man, am I glad that I knew something already about how taxes are done! The professional made a whole litany of errors, from telling me to use the wrong form as a voucher for payment, to making up numbers for one of my bank accounts, to claiming that I owed the state several thousand dollars when I was due for a refund! Now I need to go back and worry about filing a complaint with the company -- even if I don't get a refund for the money I paid, I want to make sure other people don't fall into the same trap. So I would reiterate Jon's advice to know the basics yourself, even if you get a professional to help with the details. You want to be able to double-check their work!
re: Happy US Tax Day!
By SarahdncrPremium member Comments: 634, member since Wed Jul 29, 2009
On Sat Apr 20, 2013 11:17 PM
Edited by Sarahdncr (214611) on 2013-04-20 23:23:07
I had always prided myself on being able to do my own taxes, and I have been filing a return since I started working while in highschool at age 16. Today however, I have an accountant prepare my taxes as now I own a rental property and my investments did well this year, so he/I had Capitol Gains to figure out how to allocate them in the best way to minimize my tax exposure the most.

I still manage to get a refund, and it just goes into a bank money market savings account.

One interesting thing, since I derive my personal income mostly from all of us paying U.S. Taxes (e.g.; I work for the US Government, so) I have never dreaded haiving to pay taxes, where most people hate to.

ReplySendWatch