Helaine has been trying to rush me along and get me going on Income Tax 2003. And, of course, like everything else in my life, I try and procrastinate. Adding to my lack of motivation was the fact that I expected we’d owe money.
Wrong again – thankfully.
We began this afternoon. We’re using Turbo Tax Online, as we have the past few years. There are all sorts of advantages to doing it this way – not the least of which is, Turbo Tax ‘remembers’ what you entered in the years before, so addresses and common entries are already filled out.
I know there’s a certain amount of danger in putting all your financial info on someone’s servers. I’m hoping… no, I’m praying that Turbo Tax takes it all very seriously and has the best security. One can never be sure.
Everything I’ve ever heard about the tax laws is true. They’re complex, obtuse, and often counter to good financial policy. There are so many choices having to do with so many esoteric programs. It’s enough to make your head spin.
I’m sure there are good reasons why we don’t, but wouldn’t it be easier to stop all the financial contortions and eliminate deductions entirely?
When you look at how much tax liability a single dollar of deductions brings, it’s obvious why people pad. As it is, after all was said and done, we let Turbo Tax show us how we did versus other people with comparable income. We are way behind on deductions, charitable contributions, anything that would put more money in my pocket. We are honest – or at least try to be, and these numbers make it look like we’re removed from the norm.
At one point I was asked if I had spent money on post-high school courses. Mississippi State! Excellent! It’s deductible. Except, after 4 or 5 minutes of entering, Turbo Tax burst my bubble, telling me I made too much to deduct books and tuition.
It’s demoralizing to see in one place, as you do when you’re filing your taxes, how much you’ve actually paid! There are state and federal taxes, property taxes, property taxes on our cars (a Connecticut exclusive), and though not a tax, mortgage interest. I remember living comfortably on much less than I now shell out.
I think I did everything correctly, but who knows? Did I ascribe the proper reason for taking a deduction or classifying income? Was a bond I bought when Steffie was an infant tax deductible? I said no. Maybe it was.
I found it interesting that Turbo Tax rounded all the numbers to even dollars for Connecticut while keeping dollars and cents for the feds. To make matters more confusing, the method of writing dates is different for both. And, the program was unforgiving if you didn’t do it right for each one.
After going through all the numbers, it looks like both Connecticut and the federal government owe us money. They do every year. We plan it that way.
Within the next few weeks a financial genius will be on TV, telling me that overwitholding my income tax is a bad idea. He may be right. But, when the checks come from the government, in one big lump sum, it seems worthwhile.