Tuesday, April 8, 2008

Tax Time

My father-in-law is a CPA. My uber-cool brother-in-law has a cool MAcc. after his name. My brother loves all things monetary. Me? I hate tax time. I want a flat tax. I get irritated by the complicated tax laws and convoluted forms. And I get downright grumpy every time we do them (except for that rebate thing).

Every year, we have a conversation that goes something like this:

Me: I want to sit and do taxes together, so please let me know when you're doing them.

Ever-so-patient Hubby: Okay.

Me: I'm serious. I know I get totally grumpy when we do them, but I really do want to try to better understand the stupid tax codes and laws. Even though I think we should have a flat tax.

Ever-so-patient Hubby: Okay.

Me: I mean it. I really want to do it. Together.

Ever-so-patient Hubby: Okay.

My ever-so-patient hubby collects all the paperwork, receipts, W-this, that, or the other 1040, various tax forms, tax software, etc. and lets me know that he's ready to sit and go through the program. With me.

So we sit down and from the very first Turbo Tax prompt, I'm grumpy.

"Why do they want our names?"

"Because it's kind of important."

"Oh. Well. See? It's just another way they get you. Big Brother is watching!"

My ever-so-patient hubby offers to enter in all of our personal information since it's "mundane" and "even a trained monkey could do it" (translation: Let me do this and then we can deal with the grumpiness during the tax portion only). Fine by me.

So we sit down and start the process that you *think* will take you an hour or two. Three tops.

"This is so stupid. We should have a flat tax."

"I know, but we have to do this."

So, I take a deep breath and start out excitedly figuring out every possible way we can get a tax break because, let's face it, we're barely starting to make money and we have LOADS of indebtedness. All kinds. I'm almost hyper trying to figure out the tax system and how to make it work for us. The little refund tally in the upper right hand corner goes up a bit and then tauntingly stagnates for 43 screens.

3 weeks and 12 hours later you're still on the 3rd tab in (of 8) answering questions like "Did this piece of furniture that you purchased for your business and is only positioned in the rooms you have designated for your home business in which rooms you have no other personal use nor would you dare because you would so be audited have anything to do with the ethanol fuel program or did any money used to purchase this piece of furniture come from a Gulf State Relief Program and would you like to take depreciation on this all at once or over the years and when did it get put into use and did you use it as a personal chair beforehand or has it always been a business expense and if you're sure about this put "0" in the box, otherwise proceed to the next line where we ask you to figure out if the money you're getting from your side job is hobby-related or royalties."

This is when penny-pinching, let's-get-all-the-refunds-we-can-out-of-this me starts banging my head against the keyboard just to dull the pain from this mind-numbing exercise in bnhgbnhy tax deductions bgnhynhg screaming, "I don't care anymore! I don't want to answer any more of these asinine questions tonight! I give up!"

And then I see that it's 2AM and I literally (no, seriously) hear my pillow screaming for me to come to bed. Have I mentioned I favor a flat tax? And we thought we were going to watch a movie afterwards . . .

And my brother (we'll call him Mr. Moneybags) informs me today that since he makes lots of money and doesn't ever pay taxes, he's going to buy (insert Charlie Brown Adult Voice Sounds here) "Waaaahhhhh waaaaahhhh waaah waaah waaaaaaaah waaaaah"

"Yes, Mr. Moneybags, I do think it's neat that you're going to buy some cool add-ons for your mid-life crisis Miata and 2 large screen televisions."

I excitedly tell him that we're getting a really good refund and we're so excited because we can use it to pay down debt and refinance our house so we can pay down more debt and how neat is it that we're really starting to make money after being so cash poor and strapped for the past few years?!

To which he responds with a guffaw, "I don't think you "start" making money until you've paid off your debts." Wind. My sails. Out. Since, you know, that's like 400 thousand dollars away.

And now I'm sitting here blogging and eating a Starbucks hot chocolate called "Double Delish" (Yeah, that's right. Eating it. They're delicious little nuggets of chocolate joy. Double Delish nuggets of joy.) and I don't even emotionally eat.

But hey. We're done with them. We've worked hard and we're done with them for this year anyway. And please don't tell me you did it on February 1st. I'll give you a big la-te-da and you'll be on your merry way. I know. I've heard Suze Orman say a thousand times that you're letting the government collect on YOUR interest. Seriously, if that were my biggest financial concern, I'd dance in the rain. Naked.

However, I must say that I'm thrilled with our rebate (and credit, even though it's really an advance on next year's refund--boy, aren't a lot of Americans going to be peeved at that one next tax year). See, we're poor and hard-working enough to qualify for the "Earned Income Credit" and we're fertile enough to qualify for the "Child Tax Credit" and I'm pretty sure we qualify for the "Record for Highest Student Loans That Have Been in Deferment And You're Finally Paying Them Off Credit" as well as the "You're So Daring For Quitting Residency You're Probably Stupid Credit." Or something like that.

With the rising cost of gas and food, the refund is very helpful. We're not very good at splurging. We're the kind of people to whom others are loathe to gift money because they full well know we'll use it to do something crazy like pay MetEd or Sallie Mae. I know. Boring. I still don't know how people our age afford trips to Disney. We've been putting coins in our jar for about 5 years and I think we've earned enough to get us half a ticket in to Epcot.

On that cheery note, happy recession, everyone! And may all your tax refunds come expeditiously.

19 comments:

Dr. Mark said...

Don't forget the "Even though you waited until one week before the deadline we feel sorry for poor people like you" credit. So, do you want to help next year? ;)

emily said...

i still haven't done mine, and i'm ALWAYS a february 1st kinda gal. it seems much more complicated now that we have a house. and i can't find our property tax notice and i have no idea how much we paid so i guess we'll just leave that out this year? awesome. how come your brother doesn't pay any taxes? my brother makes LOOOOOTSSS of money and he pays tons of taxes. (he wants a flat tax too). hey, i'll take it. we haven't paid taxes in years and last year our refund was over $6,000. it's like welfare, love it. this year dave's w-2 actually said $37.40...that's how much we paid in taxes this year...and we're getting a refund. awesome. although we didn't quite make the EIC this year, dave made just about a thousand more than the maximum, darn it. we got it last year though!

Boquinha said...

My brother is one of those people who knows every work around there is in the tax system. He'll do a billion extra steps to save a dime on his taxes. I'd rather pay the dime.

I hear you on the complications. Ours have gotten SO complicated with a rental property and a business. We love what we're doing though.

Jessica said...

This is hilarious! I'll have to tell Greg to check this out. I'm sure he'll get a kick out of it!

Stacy, you're such a great writer; Humorous, witty, sarcastic, profound...so when are you going to write a book?!

Robynne said...

ROTFL!!! What a great description of the joy of taxes!!! Now, would you say you *are* for a flat tax? ;p

arinandevasmom said...

Ok, I'm a CPA too, and I used to make my money doing other people's taxes. But I also favor a flat tax. This year, I had to file in two states (and I had to do it by hand because my program couldn't get the credits right between the states), we sold a house, bought a house, had a home business, had a rental property. It was a HUGE headache. And I just mailed mine today.

Greg said...

Okay Stacy, let me hit you with some knowledge and two thoughts. First the knowledge. The rebate appears to be a "forward" on your 2008 return. However, the first $10,000 (rough estimate) of income will not be taxed. So "The Man" isn't playing some sick little joke for all the fat cats in Washington to have a good laugh. So yes, "The Man" is actually giving you $1,800 in the form of a rebate. The no tax on the first $10,000 is also a nice way of saying sorry for the frustration when filling out the confusion forms. If you have any questions let me know. I might have to charge you but I'll get the answer. The first thought is about your brother. If he is making a lot of money and still not paying taxes he needs to get a new accountant. The second thought is on the flat tax. I'm not saying it isn't a better method but think about the billions of dollars rich people spend in donations just to get a tax deduction. A huge portion of that will be lost. I know it's a Dr. Cox attitude but most people just aren't that generous. Well, I've got to get back to filling out some procrastinator's tax return... and charge him double for my trouble.

Boquinha said...

Mark, Yes! :)

Emily, good question for Greg (property taxes). But he might charge you. I hear he likes Mexican food.

Jessica, I totally love you! Thank you--I swear your compliment just helped the gears in my head turn a bit more and tweak a book idea I've had mulling around for quite some time. Thank you!!

Yes, Robynne, I think I *am* pro-flat tax.

Wow, Tess, a CPA mailing hers in in April. I'm impressed! ;)

Greg, Greg, Greg. Are you turning cynical on me? You don't think the rich would give? From what I understand the poor and middle class give more than they do anyway simply to be good (not just to milk Uncle Sam). Do you think there might be something to that? Cynical or not, I'm so excited to see you and Jessica blogging more!! I LOVE it! :)

jaredski said...

That was hilarious. I totally agree. I went to the Bell County Republican Convention here in Texas a couple weeks ago and they're all in love with the "fair tax". That just multiplies the headaches for anybody who sells anything (small business owners beware). And don't think there won't be a plethora of special interests getting special exemptions and complicated rules tacked on.

Greg said...

Stacy, Stacy, Stacy. Has there ever been a moment when I haven't been cynical? In all honesty, I don't think the rich (in general)would give as much as they already do. Unless, of course, there is some alterier motive. I'm looking in your direction Oprah. Don't get me started on that woman. In response the the poor and middle class giving more; I have the understanding the poor give more as a percentage of income not total dollar amount. Maybe they do give more as a total dollar amount but as a tax issue it doesn't matter. The poor and a lot of the middle class don't have enough expenses they could take as a deduction on their tax returns so they take the standard deduction. It's great that the poor and a lot of the middle class are so giving of their time and money but I don't see people like Trump still making the same donations they do out of the goodness of their hearts. Some people need the recognition for their careers, some need the tax deduction and some need both. I'm probably wrong but these are just some thoughts.

Dad said...

I just got to look at this posting. Hilarious!!! I to am for a flat tax. But then what would happen to all the tax accountants? I tend to agree with Greg about the charitable contributions, though. Stacy, hang in there, you only have to endure this until, oh, I don't know, you die! I do agree with you about spending the dime rather than the rest of your life looking for all the loopholes! Keep smiling.

N & M's Mama said...

Hey, the deadline isn't for another 29 hours and 29 minutes. And we intend to use it. Eric is STARTING our taxes tonight. Heaven help us. I told him he is not allowed to even think of extending. Too bad M wasn't born 6 weeks early. That would be sweet.

Boquinha said...

Jared, is the "fair tax" the same as the sales tax on everything idea?

Greg, I think you're right about percentages. You have a point. (And of course I'm speaking to you!! You know our little secret!) ;)

YAY! I've been wondering when my accountant father-in-law would chime in! So glad to see you posting on this one! ;) So far, we're all in favor of a flat tax. Amazing! Even the accountants! :P

Kara! Let me know when you guys start banging your heads on your keyboard. I'm guessing you're in for a long night!!

nicole said...

I have no idea what you are talking about. at all. Thank goodness for that. and for 2 brother-in law accountants.(My poor sister becomes worse than a residency widow for the first few months of every year.)
We got a smaller state refund this year because apparently(according to my BIL)PA has a ridiculously low table. again not sure what the heck he is talking about. Don't care to either.

Paul said...

Nicole told me to check out your blog on taxes (I am not stalking).

Quite amusing. I wrote one myself which you can check out if you would like.

I am a CPA, but not a tax accountant. Thankfully.

Stacy the "economic stimulus payment" is not a rebate of your 2008 taxes as described by Greg. See http://www.irs.gov/newsroom/article/0,,id=177937,00.html

I would not advocate a flat tax. While it would be simple (i.e. no forms to fill out) can you imagine our "friends" in Washington ever making the tax truly flat?

Several comment posters have touted such great refunds as the result of the child tax credit, the earned income credit, etc. If you like a flat tax get ready to pay your share and never receive a refund again.

There was a very astute article in Fortune magazine about who is paying taxes in this country. Check it out here:
http://money.cnn.com/2008/03/31/news/economy/tax_debate.fortune/index.htm

Based on many of the comments (and I get a nice refund as a disclaimer), we are enjoying the benefit of the top earners paying a huge portion of the country's taxes.

Any way you slice it you can't make us all happy. There is always a masochist out there (aka tax preparer) who is willing to shoulder your burden and prepare your taxes for you!!

Dr. Mark said...

I guess the argument for the flat tax assumes that the percentage will be low enough to relieve the tax burden on the middle class and at the same time eliminating loopholes that only the wealthiest of Americans and corporations can utilize. With the flat tax there are still ways to ensure that lower-income individuals and families are able to become tax exempt as well. There's no way to satisfy everyone, but there are ways to "equalize" it.

Then again, we could just go to a value added tax and scrap income tax altogether.

April Oaks said...

You have a fun writing style. I love the crossed out words. Ugh taxes!!

Dave Johnson said...

We almost got the "Record for Highest Student Loans That Have Been in Deferment And You're Finally Paying Them Off Credit," but our medical deductions weren't quite enough to land us in the "Sell Your Youngest Child Into White Slavery To Pay For That Last MRI" bracket. When you subtract that item from Line 43 and cross-sub-divide using the Fief/Serf rectal depth plunge table on Page 184, you can clearly see that no matter how we file, what we deduct, or how many boxes of Ramen Noodles we try to disguise so as not to throw up from eating them so much, in the end, we are royally and truly screwed.

Boquinha said...

Bwahahaha! Good ones, Dave. And I know you and I are on the same page about a flat tax. When will it happen?!?