Monday, March 21, 2011

I Should Have Been An Accountant

Okay, maybe not. But as perverse at it may seen, I don't mind doing my income taxes (paying isn't always as much fun!) I have always enjoyed sitting down and playing with the numbers, figuring out the tax code and seeing how things work.

As many people,I have been using online tax prep software...I think I switched for the 2000 tax year. That helps with the simple calculations, but you still have to figure out what all the terms mean and where to enter the numbers. I could do it by hand, but since I want to e-file anyway, let the computer handle the grunt work.

While my taxes don't involve lots of complicated tax shelters or anything, I don't file the 1040EZ form either. I itemize since I own house, pay property taxes and donate to charity. I have a brokerage account which pays dividends and mutual fund capital gains. I am not a heavy trader, but have to make a few trades a year to keep the portfolio balanced so I have to calculate some capital gains (hopefully not losses this year!) and fill out schedule D. When I was teaching, I claimed the credit for educators who bought classroom supplies out of pocket. I do some consulting work on the side so I have to figure out the self employment tax and keep track of deductible expenses for that as well. I bought a new car last year so I did the calculations to see if I would benefit from deducting the sales tax (that was a new one for me...last time I bought a new car was before you could do that).

So while I don't have the most complicated taxes in the world (I don't make enough money for them to get THAT complicated!) but I have a lot of the common items that many taxpayers have to deal with. One thing I don't have is children, so I don't get any child related credits or deductions.

At the end of the process, the software lets you compare your tax return to the average of people with similar incomes. It might shock some of the conservatives who say liberals don't pay taxes, but I pay MORE on average than people in my income bracket. Looking at the detailed breakdown, its easy to see why. It's mostly the no children thing. Estimating how much my taxes would go down if I had the same income but was married with two children, that gets me pretty close (maybe a little below) the average. Of course, I wouldn't want to be married with two children on this income, although I live all right at a single!

Anyway, the whole point is that I enjoy figuring this shit out! I might feel differently if I had to do it more than once a year. I had trouble going to sleep last night because I had too much fun. The whole process took a little under two hours, start to finish, including the Arizona State return. I haven't filed them yet...I am going to wait another couple of weeks just in case I get another amended 1099 from my brokerage firm (I already got two amended forms this year...get it right already!) One year I got an amended form after I filed. I admit I did not file an amended return even though technically I should have. The amended reform reclassified about $3 worth of short term capital gains as long term capital gains which would have increased my refund by about 70 cents...if they REALLY want to track me down and force an extra 70 cents on me, let them do their worst!

Maybe I should take some courses...I know they would be entertaining for me at least! Okay, you can all start the comments about how sick and mentally deranged I must be now!


Sassa said...

I have always enjoyed doing taxes. I totally love putting little numbers in boxes. My favorite class at Gateway was accounting. Wouldn't you know I got my lowest grade there. Still I would love to take another accounting class just for the heck of it.

kkdither said...

I used to do my mom's taxes... they were simple, but still, I was always glad when they were done. I don't know why, but it stresses me. My daughter is a CPA. Thank goodness. I'm hoping to never have to do them again.

Sassa, as for boxes... I love to do crosswords. You can keep the numbers.

OrbsCorbs said...

I (or my ex-wife when I was married) always did my own taxes. I don't have to deal with what hale does, but I remember one year in Chicago when the two brothers that I worked for decided to split up their business and shops. Because of that, they had to divest (or dissolve or whatever) the retirement accounts that had been set up for the managers. I received a disbursement with the warning that taxes would now be due on it. Of course, I ignored that and bought a second car with the money - which I had to sell when the taxes came due.

I file online now. It's not too complicated with my income. Hale's right about the tax penalty for being single. I don't think that's fair.

hale-bopp said...

Politicians like to talk about the "marriage penalty" (although I haven't heard as much about it recently) in the tax system. Some married couple pay more taxes than if they were single, but other married couples pay less than they would as singles.

For example, If I got married to a woman who didn't work and had no income, my taxes would go down since the exemption for married couples is great. If I got married to a woman who made about the same as I did, my taxes would go up since the exemption for married couples is less than double that of singles (both scenarios assume nothing else changes of course!) I could really cut my taxes by adopting a couple of children, but that's not happening! I also tend not to date unemployed women who have no income either...just sayin.

I know I may have more complicated situations in the future. So far however, I have always been able to sit down, read the publication, say, 'Oh, that makes sense", figure 'em out and file. See how far that takes me!

OrbsCorbs said...

Hale, "adopt" some children through those TV ads you see for supporting needy children abroad for just pennies a day. Sign on for about a half dozen, then claim them as exemptions.

Just another friendly tax tip from OrbsCorbs, your local uncertified unpublic unaccountant.