Taxes are done!

[Kraken]

Nervously hoping that we get our returns back before the Q1 EST is due. I think we overpaid estimated taxes for last year and I'm hoping that our estimated bill will go down substantially this year. I divide our annual tax bill by 12 and save that much money each month, but April's EST is a stretch because I have to pay our CPA, and our car excise, and property tax all before May 1. I just don't have enough money to make the EST payment at the rate we owed last year.

Unless I see the hard number in the next couple of days I'm just going to send the government everything we have left over, which will be only half the amount they are expecting. I hope that doesn't cause the government any hardship, but every member of the House would need to take a $1 pay cut to cover the shortfall.

[Freezer-TPF-]

ACHIEVEMENT UNLOCKED: Filed an extension.

ACHIEVEMENT UNLOCKED: Extension accepted by the IRS.



I did manage to scare the crap out of myself by using the TurboTax refund estimator, which showed I owed a few thousand dollars in taxes. My heart rate increased until I noticed that I had it set for filing separately instead of jointly. Correcting that error put me safely back on the refund side of the ledger. Ahem.

[Kraken]

CPA emailed to say that we won't owe a Q1 EST payment since we overpaid significantly last year (as I had suspected) after having underpaid significantly in '14. That's welcome news since I had nothing in the budget. Naturally, the overpayment will be used to reduce the EST requirements for the rest of this year -- that's as close as we ever come to a refund.

Should see the actual returns by the middle of next week. This is the first time in years that we have made the deadline without an extension. Yay us.

[Octavious]

Got killed this year. Even with us both setting 0 for the state we still owed them money.

[pr0ner]

ACHIEVEMENT UNLOCKED: Filed an extension.

ACHIEVEMENT UNLOCKED: Extension accepted by the IRS.



I did manage to scare the crap out of myself by using the TurboTax refund estimator, which showed I owed a few thousand dollars in taxes. My heart rate increased until I noticed that I had it set for filing separately instead of jointly. Correcting that error put me safely back on the refund side of the ledger. Ahem.

You filed for an extension even though taxes aren't due until Monday?

[LawBeefaroni]

Got killed this year. Even with us both setting 0 for the state we still owed them money.

Feel you. Owe the feds a lot. Not unexpected though, the wife refuses to do her quarterlies. Basically have to pay up for all her earnings.

Somehow the state owes us. Not sure how that is and considering that they're bankrupt I'm not counting on a penny.

[Octavious]

My wife more than doubled her salary halfway through last year so I'm not exactly surprised. Need to adjust my fed withholdings. State I don't get why I owed so much.

Sent from my SAMSUNG-SGH-I337 using Tapatalk

[stessier]

ACHIEVEMENT UNLOCKED: Filed an extension.

ACHIEVEMENT UNLOCKED: Extension accepted by the IRS.



I did manage to scare the crap out of myself by using the TurboTax refund estimator, which showed I owed a few thousand dollars in taxes. My heart rate increased until I noticed that I had it set for filing separately instead of jointly. Correcting that error put me safely back on the refund side of the ledger. Ahem.

You filed for an extension even though taxes aren't due until Monday?

Extensions are easy and there is no real penalty, so why not?

[Octavious]

If you owe money don't you still have to pay right away or start paying penalties?

[Kraken]

If you owe money don't you still have to pay right away or start paying penalties?

Yup, but they don't amount to more than a few bucks unless you owe a lot of money and procrastinate for months. A week or two late paying a small balance is no big deal.

[Cortilian]

Filed and check in the mail to the bloodsuckers.

[Kraken]

Major unexpected windfall!

I "knew"(ish) that 2015's required estimated quarterly payments were too high because Wife had made a lot of 1099 income in '14. I expected that we'd be able to reduce the amount we'd have to pay in EST this year, especially since Wife's 1099 income may reach zero.

What I didn't know was that both of our businesses would show nice healthy losses last year. That delivered a $8,000 swing from modest profits to modest losses.

Bottom line from 68 pages of calculations is that we're getting >$5,000 back from feds and state together. I had no idea it would break so resoundingly. And just as good, we don't owe ANY estimated payments this year, freeing up several hundred bucks in the monthly budget.

Now to figure out how to fudge those numbers when Wife has to sign, lest she demand that we blow it all on a vacation. I'm inclined to use it for home improvement but she's been complaining a lot about not getting a vacation this year.

[El Guapo]

It was a little tempting to pay for the in-person tax prep, but the 90%+ odds were that the only difference would be that we would owe an additional $150 - $200 in tax preparation fees.

I just have to convince my wife...she has friends who have convinced her that tax preparers have magical cash-giving powers.

About the only possible thing that may be possible is to get more of the approximately $11,000 in tuition, books, and transportation costs for her LPN program deducted. The school did not issue her a tax form, which seems to indicate that they don't play nice with subsidy programs (she could not, for example, get a student loan for this place). There was a lifetime education credit that the software deemed she did qualify for, and while I haven't looked at the form yet to see how much that credit is for, it looks like it dropped the tax owed by around $2000. And this was something her fellow students claim their tax guy did for them. I'm skeptical that it's going to be worth $200, but it wouldn't be the first, last, or most costly "I told you so."

For the last few years, I've been liquidating my library -- I put everything up for sale on Amazon. Last year, I had to file a tax info with Amazon because I came close to 50 transactions that Amazon said required them to send me a tax form. I wonder if I total up all of these sales, then calculate the cost of goods sold (basically, the list price on the books). The net loss could be several thousand $$$, especially when I add in the Amazon fees. Is this even possible?

The meeting with the tax preparer was yesterday; and let's just say it was a resounding victory for the wife. And now I am considering letting this tax accountant revisit my 2014 and 2013 taxes to see if there is additional riches to be found. Yesterday without a doubt was the best $225 I've ever spent.

How good?

H&R Block Tax Cut: You owe $7,242. Will that be cash or credit card?
Accountant: Uncle Sam owes YOU $7,111. It will be deposited directly into your bank account.

That's a $14,353 swing.

Now, there were some unique things this year that won't apply to the past few years. I took a disbursement from the IRA I inherited after my mom died to pay off some debt, and had them take out 10% towards taxes. I also cashed out a pension account from the hospital to pay for my wife's school. Turns out for reasons I don't entirely understand, the money from that IRA is not taxable, and since it was used to pay for school, the liquidation of that pension account (also having withheld 10%) was non taxable because school is one of 4 things you can withdraw without penalty for. But it's certainly worth her taking a look at my last two returns, even if she doesn't find any more money, she's definitely earned additional fees with this return.

Since my generous donation to the federal government came out of my account today, this raises the question of whether I should have followed your wife's advice as well. Ugh. Though part of my reticence is that there are a couple deductions that we claimed that I think but am not certain about our entitlement to; seemed plausible that we could end up worse off rather than better off even aside from the tax preparation fees.

Oh well. If I wind up buying a Chevy Bolt this year that should help with next year's taxes anyway.

[Jeff V]

You can file amended returns up to 3 years. You might consider taking your shoe box of tax things to an accountant, and see if they will construct returns based solely on the information you provide. Then you can pick and choose what, if any, to refile.

My problem is a disorganized shoe box. I'll need to scrounge for my documents for the last two years and make sure I have a complete set before bringing to the accountant to see if any additional magic is to be had.

[gilraen]

H&R Block Tax Cut: You owe $7,242. Will that be cash or credit card?
Accountant: Uncle Sam owes YOU $7,111. It will be deposited directly into your bank account.

That's a $14,353 swing.

Unless you have some really bizarre circumstances or you really screwed up using the software, I'd question the CPA's legitimacy with numbers like that. At least make sure she's going to back you up if you get audited

Extensions are easy and there is no real penalty, so why not?

You're getting a refund, so why not get the refund now rather than later? Not to mention to just be done with taxes for the year and not have to think about it until next year.

[Zarathud]

I extended because my wife mentioned some additional medical bills paid in 2015 that now might be deductible. That would make a better refund.

[Isgrimnur]

Congratudolences.

[Jeff V]

H&R Block Tax Cut: You owe $7,242. Will that be cash or credit card?
Accountant: Uncle Sam owes YOU $7,111. It will be deposited directly into your bank account.

That's a $14,353 swing.

Unless you have some really bizarre circumstances or you really screwed up using the software, I'd question the CPA's legitimacy with numbers like that. At least make sure she's going to back you up if you get audited

That's what we pay for. There were two major things (and some minor ones) that had an impact, as I mentioned before. The tax software did not ask questions as to the nature of the 1099-R's, and there are valid reasons the amounts were not deductible. Without knowing that, it made it all taxable and hence the large tax bill. But not only was it not taxable, but the taxes I already paid on that became an overpayment. There were some other things too...a child credit that we qualified for by $4 (it would have been a reduced credit if AGI was $4 more), and some job expenses my wife incurred that we did not account for. For educational expenses, the tax software only credited a little over $200 when she qualified for the $600 limit. It did not, for example, inquire as to the commuting expense to school (20 miles each way, 3 times per week over 6 months).

Now, I asked her about my book sales for the last year. She thought I absolutely could claim the revenue and then write off the expenses (Amazon fees and un-reimbursed shipping) as well as the cost-of-goods sold, which in many cases were a lot more than the selling price of the book (a few, very few, appreciated in value over what I paid). Amazon doesn't provide me with very good reporting, though, and as I was close to 50 transactions last year, it's going to take a while to research them all. If the difference is enough that's worth paying the accountant to file an amended return, we will do so. If I find the time to do this work.

[Carpet_pissr]

I wanted to do an amended return to get a credit for vehicle tax that I misfiled last year, and my uncle (tax maven, amongst other things) advised against it, saying it wasn't worth the increase in audit risk for that amount of money ($400?).

[Z-Corn]

Now to figure out how to fudge those numbers when Wife has to sign, lest she demand that we blow it all on a vacation. I'm inclined to use it for home improvement but she's been complaining a lot about not getting a vacation this year.

If it helps, I'm complaining as well about you guys not getting a vacation this year...

[Kraken]

Now to figure out how to fudge those numbers when Wife has to sign, lest she demand that we blow it all on a vacation. I'm inclined to use it for home improvement but she's been complaining a lot about not getting a vacation this year.

If it helps, I'm complaining as well about you guys not getting a vacation this year...

I don't like vacations that involve leaving the house. Wife likes to travel; I hate it. We're going to the Berkshires for a weekend in August and to (shudder) her family reunion in DC over Labor Day weekend; that's more than enough for me and not nearly enough for her. Having two new kittens is a good excuse for not taking an extended vacation this year. But since she earns 90% of the income she gets an outsized say in how it's spent. I encourage her to take vacations with her friends but for some reason she wants to go away with me for a week. I can't imagine anything less pleasant than spending a week traveling with me.

Anyway, when I revealed the refund I said "So there's our wiring job!" and she was on board with that. We had agreed last week that rewiring our 104-year-old house should be our next improvement project, so now it's on me to get some estimates. I'd expect to pay ~$5,000 to replace the fuse box, repair several broken outlets and switches, install a few new ones, add a light fixture or two, and deactivate the old burglar alarm that goes off every time there's a power failure but otherwise doesn't work.

[Jeff V]

I wanted to do an amended return to get a credit for vehicle tax that I misfiled last year, and my uncle (tax maven, amongst other things) advised against it, saying it wasn't worth the increase in audit risk for that amount of money ($400?).

Audit risk is only a concern if you know you're doing something patently wrong. But the risk is nil to begin with, so an increased risk might be 10% more than nil. And we keep hearing that the IRS doesn't have the resources to go after the big fish; I can't imagine they'll take a microscope up the ass of us guppies.

I've gotten love letters from the IRS before, usually a few years after the return in question was filed, and always relating to some stock or security I sold. They ask me to pay an assload in tax assuming the item sold cost me nothing, I respond with evidence that yes, I actually did pay for it and sometimes even paid more for it than I sold it for. In one case I sent them a check for about $20, the amount in question was so trivial I wasn't about to re-do all of the calculations and just applied my basic tax rate. They sent me $3 back. Mostly, I get a letter back saying carry on, this incident is closed.

[Jeff V]

I like vacations well enough but we just don't have the time. Wife will get a week's vacation this summer, which she plans to take prior to taking the nursing exam so she can study. Otherwise, her work and school schedule make it impossible to do much of anything. In a few weeks, we're spending two fun-filled days in the Land of Cheese, mostly driven by her desire to get the kid into a pool a little sooner than our subdivision's pool opens. By June she will be on travel lock down anyway. While she has some friends around the country she'd like to visit sometime, she'd rather hoard money for the next trip to the Philippines. That's going to be a costly one -- it'll be in 3 years when her brother graduates college. The baby won't qualify to be a lap baby anymore, so we'll have to spring for 4 full fares. I'd be taking my entire year's worth of vacation (only 3 weeks) at once. And this time she doesn't want to spend much time at all on Leyte with her family, instead she wants to go camping on one island, visit Palawan, a beautiful (but expensive) island, and Mindanao, the only part of the country with a travel advisory warning Americans to avoid.

[LawBeefaroni]

And we keep hearing that the IRS doesn't have the resources to go after the big fish; I can't imagine they'll take a microscope up the ass of us guppies.

Little fish are easier to land than big ones. Sometimes they'll take the easier prey.

[Zarathud]

Little fish also swim into nets en masse.

[Jeff V]

And we keep hearing that the IRS doesn't have the resources to go after the big fish; I can't imagine they'll take a microscope up the ass of us guppies.

Little fish are easier to land than big ones. Sometimes they'll take the easier prey.

A friend of mine owed $100K, that was big enough for them to go after. I know the whole existence of the IRS defies cost/benefit analysis, but I should think an agent spending thousands or tens of thousands to prosecute someone who at best will yield a few hundred or a few thousand dollars is really benefiting nobody. I'm fairly certain that full scale audits of little fish are an insignificant risk. Now, if the IRS has something specific...say, a record of a disbursement that isn't noted on your taxes, they might kick off a letter of inquiry, and suggest you might owe an inordinate amount of tax based on nothing in particular. Why not? This sort thing costs them almost nothing, and in some cases, will yield a compliant check in the full amount. In my experience, a modicum of proof will stay their hand. I'm pretty sure all of these companies advertising on the radio about getting large IRS bills slashed to a pittance are related to the reluctance of the IRS to commit resources in excess of the debt owed just to collect it. If the option is expensive litigation, why not take a small portion of what's owed and come out ahead?

[ImLawBoy]

I think it's a bit similar to the security theater provided by the TSA. If everyone sees them scanning bags and molesting searching travelers, it might discourage Billy Terrorist from trying to sneak on a bomb. If everyone knows that the IRS will audit people, even when it doesn't necessarily seem to make sense financial sense to audit the little guy, it might help to keep more people in line.

The effectiveness (of either policy) is up for debate . . . .

[Jeff V]

No doubt the fear does motivate some to stay in line. Most people, however, are not inclined to do anything wrong. And with the tax code as complex as it is, many wouldn't know where to start even if they were inclined to cheat some. Of those who might try some questionable things (say, claim charitable deductions they cannot support) some will be rattled by a letter of inquiry. That's not the same a putative audit, though.

[Zarathud]

The IRS uses its big data to identify areas of high non-compliance or easy victories with a data mismatch. Jeff V's broker likely didn't report basis on those shares, so his gains on stock looked lower than expected. Easy to catch by mail, easy to fix by mail.

Only a small sample of lower asset taxpayers get fully audited. Some of them are used to build the data set of likely non-compliance and while it doesn't make sense for the collections on them individually, the data collected is valuable.

When you're dealing with a tax agent, there's also a personal factor. Some think of themselves as Paladins avenging Uncle Sam against the masses of unwashed tax evaders. Others are just assholes who have a hammer, and everyone is a nail. But many are just trying to do their job, hitting enough production numbers to avoid sticking out.

[Smoove_B]

As someone that knows a married couple that hasn't filed a tax return in over two decades over a personal belief that they shouldn't pay taxes - and has never been audited or tossed in jail, F taxes and the check I just had to write.

[Kraken]

As someone that knows a married couple that hasn't filed a tax return in over two decades over a personal belief that they shouldn't pay taxes - and has never been audited or tossed in jail, F taxes and the check I just had to write.

When I was a tyke several uncles and aunts on my dad's hillbilly side of the family didn't have social security numbers so they never paid any payroll taxes. 'Course, they didn't get any benefits, either, but they were stickin it to The Man! They could only ever work at jobs that paid in cash.

I doubt that anyone could get away with being that officially invisible nowadays. These folks were all born in the 1920s and 30s.

[em2nought]

Looks like no revolution again this year, time to do the damn taxes for 2015. I'm ever hopeful.

[Zarathud]

A little late, you need to have the tax return postmarked today!

[em2nought]

A little late, you need to have the tax return postmarked today!

E-filed so I had til midnight.

[Zarathud]

If you want to annoy the IRS, file in paper.

[em2nought]

If you want to annoy the IRS, file in paper.

I'd like to annoy them, but I'm afraid to.

[Kraken]

What's funny is the IRS makes it impossible to e-file one's quarterly 941 for free. Have to print and mail those every three months. I can deposit the money electronically, but not file the form.

[LordMortis]

What's funny is the IRS makes it impossible to e-file one's quarterly 941 for free. Have to print and mail those every three months. I can deposit the money electronically, but not file the form.

State of Michigan is the other way, in general. I can file electronically but I need to send them the tally with a check with no staples or paperclips by mail. The will, however, refund me electronically. The worse is when I owe them a dollar. I have to get all my physical shit in order and spend 42 cents to write them a check for a dollar. Owing the state one dollar has happened to me three times in the last 13 years.

[Isgrimnur]

Haven't received the W-2s yet, but I bumped up my deductions this year. Contrasting federal income tax taken out of my check made ~$2,800 more deposited in my paycheck. $2,360 of that went into my Roth IRA, currently reflecting $2,423.80 of value.

If my wife's numbers are similar to last year, that will take my refund from ~$4k down to ~1k. Nothing to sneeze at to refill the coffers after the holidays.

We won't see anything from a raise perspective until the beginning of April. Without a completely surprising amount, it won't be enough to reach the $5,500/year contribution cap.

And for this year, I expect to be receiving enough funds in tuition reimbursement to qualify as extra income, which may make a surprise for next year's numbers.

[Octavious]

We have a feeling that my wife's job totally screwed up her witholdings and that we will owe A LOT of money. How they did this I have no idea. I'm hoping I'm wrong, but I haven't had time to look into it very deeply. I just know that her company was bought and when they switched payrolls her check dropped like 140 bucks a month and everything THEY verified it was the correct witholdings and she hasn't changed it. So I'm more than a little worried I own like 2k.