Do you owe, or are you getting money back? Does tax season make you crabby? Do you do your taxes yourself, or do you have an accountant?

I am always a little contemptuous of people who get big tax returns and are happy about it ... that's your money, and you should have been earning the interest, not the government. I always think the best idea is to owe as much as you can without incurring a penalty. I haven't gotten money back at the end of the year since I was in college, and even then I think it only happened once.

But this was my first year with the full mortgage deduction (last year it only covered about three months), so I didn't realize how much my taxes would be reduced. I'm actually embarrassed that I'm getting almost $4,000 back. I'm going to use it to pay off credit cards, and today I'm going to go decrease my withholding and start putting that money into mutual funds.

Oh, yeah, and I always do my own taxes, but Jeremy did them this year. He was playing around to see how we should divide the mortgage deduction for maximum benefit.

-- Anonymous, April 17, 2000

Answers

Tax season sucked....

I lost 1/2 of my return because I got married. Ugh.

-- Anonymous, April 17, 2000

I ended up having to write almost $3000 in checks this weekend for my federal and state taxes. My stipend doesn't get reported or withheld, so I owed full taxes on four months' worth of last year's stipend, plus I have to pay my taxes quarterly now, so I owed for the first quarter of THIS year. Ouch.

I have a lot of investments, too, so my taxes are pretty complicated. Every year I tell myself that I'm going to spare myself the agony and go to H&R Block, but then every year, I wait until the last week or so before taxes are due, and I can't get an appointment, so I end up doing them myself.

-- Anonymous, April 17, 2000

The taxes went fine, but since California drove me FREAKIN' NUTS a couple of years ago with their Fakeglish, unreadable directions I first hired an accountant (waste of time and money) and then I started to use Quicken or Kiplingers.

Now, I don't have a mortgage, kids, tax-deductible business expenses, a railroad pension, oil-drilling tax breaks, or much of any complication beyond "Ordinary" "Income", so can anyone tell me why California's return needed to be so freakin' COMPLICATED? The Fed stuff was a breeze. California, ha! Even New York's was written in plain English.

Anyway, this year my wife got me Kiplingers, and I did it in February to see if we'd need to save up for money owed (we actually got a refund), and held on to it until this week so I could double-check the numbers (and I have a superstition that early returns are more likely to get audited).

And Kiplingers got to the point where I could "E-file", and first directed me to "Check for updates." Log on - check - no updates on the server. Now let me continue? No. it won't let me continue until I check for updates. HELLO, BUG?

Oh well, I snail-mailed my returns and saved me a couple bucks on the obnoxious "E-filing charge" anyway.

-- Anonymous, April 17, 2000

ha. you think california forms are bad? try massachusetts. and even better--try filling out both "part-year resident california" and "part-year resident massachusetts" forms. that's a real kick in the pants, i'm tellin' ya!!

-- Anonymous, April 17, 2000

Had to pay almost $6,100 to the Feds and Massachusetts. To buy the house, I had to withdraw 401k funds (couldn't borrow against them because of an arcane provision in my employer's 401k rules). Employer failed to withhold $3300 in penalities, although employer reported that the withholding was done -- right up until the 1098-R that showed no withholding. So, we went from expecting to pay about $2,000 at year end to digging much deeper into our pockets ($3,300 straight back to Feds, about $300 to Mass. for the income not reported). Worst bloodletting ever.

Now I'm in NYC and earning a lot more than I did for the first 3 months of 2000. Of course, I can't instruct a new employer to withhold on the basis of an annualized income that will be less than the annual salary the employer is paying. That is, I can't tell my New York employer to give me about $200 per paycheck more because my actual 2000 earnings will be considerably less than if I worked here for the whole year. So, Uncle Sam will get between $6,000 and $9,000 of my 2000 income to play with until early 2001. In short, Arrrgh.

-- Anonymous, April 17, 2000

Well, I'm Canadian, so it's a whole other ballgame. I pay about 23% of my income into income taxes and payroll taxes. Some of that is insurance - like Employment Insurance, which theoretically I'll get if I'm laid off, and though I don't expect to ever actually use it, it's nice to know it's there. But 17% is income taxes, which I got a chunk back because I put money into a Registered Retirement Savings Plan (like an American 401K). I'm a "low income earner" so I actually get my provincial taxes back. I did okay, but I resent that they're spending my tax money to open more call centres. Grrr. The free health care is pretty cool though.

-- Anonymous, April 17, 2000

This was our first year with a mortgage. I knew we'd be getting money back but could barely believe that we got over $4000 from the state and feds!

We probably lost money because we got married but I try not to think of that because it makes me furious.

I'm going to change my withholding so that they withhold less and I get less back next year. However, it's not as if i'd be investing that money if the government didn't have it. I'd be squandering it.

-- Anonymous, April 17, 2000

Hey Joanne, or any other interested Canadian:

In Ontario, "liens would be registered against their homes allowing the county to recapture welfare payments out of the prices they receive when they sell. If they did not sign, they were to be cut off benefits at the end of next month"

http://www.globeandmail.com/gam/National/20000413/UHOUSMSB.html

Sounds like you're being taxed AND having to surrender your property if you ever use a social safety net. Some bargain. To quote a Canadian friend, "Ontario is going a bit too far in its attempt to be American." (By the way, I paid 20% of my income to the feds. Some American bargain - evaporating social nets, AND high taxes.)

-- Anonymous, April 17, 2000

We were very, very stupid last year, and took money out of my retirement account to pay for a pool, and didn't pay any taxes on it, and between that and other stupid things, we are paying the piper $8,200 this year. I longingly remember when I was single and would get, like, $2600 back each year. Why, oh, why did I get married?!?!!

http://www.bitchypoo.com/bitchypoo.html

-- Anonymous, April 17, 2000

Short answer: I stayed home from work today to try to figure out HOW we're going to pay our taxes. I didn't realize until waaaay last minute that my employer for 10 months last year withheld me at the married filing married rate. Instead of the single filing single rate that I requested on my W-4.

I already assumed I'd owe a hefty chunk - oh, $1000 or so - just because I earn way to much money to not have mortgage interest to deduct. I wasn't prepared to owe close to five times that. :(

So, looks like I'll be filing for an installment plan and paying a hefty penalty on top of my already ridiculous tax rate (noting that I earned THREE DOLLARS into this tax bracket. Hmph. Can I give $3 back to one of my employers and go into the lower tax bracket??). That's what I get for being last-minute and not having time to get my money out of somewhere cheaper.

Flat tax is looking better and better every day.

-- Anonymous, April 17, 2000

Thanks for the link, Dean. Ontario is, indeed, insane, which is one of the reasons I moved back to Nova Scotia. We have a crazy Tory government too, but no Canadian government matches Ontario for venal stupidity.

But ask me what I really think....

-- Anonymous, April 17, 2000

Oh, I forgot. I always do them myself - used Kiplinger this year for the first pass, then did them by hand after I picked myself up off the floor. My numbers were even slightly (like $10 or so) better than theirs. I'm not going to go crazy figuring out why, either.

I did J's taxes, too, since he turns strange colors at the sight of a) official forms, b) math, and c) financial planning. Not a good combination when you're doing your taxes - it would have taken him a month. I just tell him how much to write the check for (in his case, about $800). Then I subject him to the "walking through the whole form" and make him sign.

Now we're revamping our budget to the "lots of pasta save like crazy" since we clearly cannot afford to not own a home anymore. Which means we need to save the roughly $25-30k we'll need to even think about getting into a house we could live with. Heh.

-- Anonymous, April 17, 2000

i had big tax problems this year. normally my dad's tax guy does my taxes for me (i know, i'm a big pussy). unfortunately, i didn't realize that the $5900 i made from my summer research fellowship wasn't going to get reported on my W-2. it's taxable income because it goes towards living expenses rather than tuition...but the university didn't withhold anything, because they don't want to deal with the paperwork.

ALSO, the tax guy made the mistake of filing for a lifetime learning credit for me, but since all of my tuition is actually paid by the university, i wasn't eligible for it.

SO after my taxes had been filed and i'd received a rather hefty return, i was talking to my dad on the phone and realized what had happened. i ended up having to file an amendment and pay back approximately $2000. that's a lot of money for a piss-poor grad student, and if i hadn't had some savings tucked away from a few years ago, i would not have been able to pay it on time.

so the moral of the story is: from now on i'm doing my own damn taxes.

-- Anonymous, April 17, 2000

As another Canadian on the East Coast, know whatcha mean Joanne... We do our own, which is complicated enough becasue we are both self- employed. So no, we didn't take out the EI (or Unemployment Insurance as I like to think of it) but we can't collect it either. There's some nifty allowances when you have your own business too. Shareholder Dividends anyone?

Mine used to be really easy, only a page or two, even after the three kids and being married. But since we live frugally and purposely keep ourselves in the lowest tax bracket, we make out okay. House is paid for so that's not a problem.

Although I think last year Ron owed money, and they sent me a cheque. Why couldn't they apply my cheque to his bill? Made sense to me, plus they'd save on the postage.

And no, we aren't done them yet. We also have our company taxes to do as well, which sadly, are due at the *same* time. We even picked our own year-end date. Shoulda known.

-- Anonymous, April 17, 2000

I got slammed with $6,111 big ones to the Feds and $3,500 to the lovely state of California. I had a few capital gains from an inheritance that was in stock that was liqidiated by the bank that held it. All in all, my accountant said I got off real easy. I don't thing almost 10 grand is easy, but...

Actually on the road at The Road Trip

-- Anonymous, April 17, 2000

Well I remember the hell of filling out the tax forms from the Summer I spent in Boston. Holy hell, I don't know how you manage every year.

Here in Ireland a certain amount is taken out of each and every paypack. Which although it can be a bitch at least you never get a nasty shock. You get a tax free allowance - which varies depending on your circumstances. Pensions payments are tax free. After that depending on your income you pay 24%(I think it's still 24%) or for incomes >17,000 IRP (approx $23500) you pay 44%.

Ick! But I'd end up screwed if I didn't pay it as I go along. And I suppose at least the taxes mean a reasonable leel of Social Welfare and healthcare are available to everyone. It still gets depressing though when you're working to give the government half of everything.

They're even cutting back on mortgage tax relief to try and stop the rapid rise in prices

Caoimhe
Just Stopping By

-- Anonymous, April 17, 2000

I highly recommend an enrolled agent as your tax preparer. They can save you big $$$$!

Well this year sucks because we changed our witholding in the middle of last year (we were buying a new home and we really needed all the $$$ we could get our grubby little hands on)and we forgot to change it back, So this year we get a whopping $400 from the feds and $500 from the great state of California. Oh well, better than paying the man!

-- Anonymous, April 17, 2000

I have a similar philosophy about giving the IRS money--I'd like to keep it as long as possible and only pay as much as required. That interest adds up! We have to pay quarterly taxes for both fed and state because the hubby's grad stipend gets nothing withheld from it and we usually end up with a hefty chunk of investment income. Why are universities so lazy about paperwork?

I don't like paying taxes, but our trade-off is that I do the taxes and he handles the monthly bills. I just have to give him enough warning about how high our tax bill is going to be so there's enough in the right account to cover it. I hate paying so much that I make him actually write the checks!

I use TurboTax and find it pretty easy. It imports your previous year's return, and as long as nothing substantial is different, it's a piece of cake. Don't tell him though. Both Illinois and Indiana have pretty simple tax forms, so I don't get the software for those. I still have problems paying state income tax after growing up in Texas. It's just wrong.

Owning a house would make our tax bill much rosier, but it's just not doable right now. Does any one change their behavior due to taxes? I mean things like trying to a certain bill for 1999 in early 2000 and prepaying for 2001 at the end of 2000 to have it add up to a substantial enough deduction. Or not getting married because of the extra tax hit.

-- Anonymous, April 19, 2000