Monday, April 17, 2006

Tax Day

"The hardest thing in the world to understand is the income tax." ~ Albert Einstein

Taxes are due today. Do you all have your taxes done? I got mine in in time this year, thanks to Jackson Hewitt. That wasn't the case last year. Or the year before that, Or the year before that.

I've never been very good with money. I try to budget, but I always forget some big bill, and then I spend more than I should, only to discover to my horror that I forgot to pay something. That happened this weekend. I had more money to work with this weekend due to the fact that my state tax refund check came in. I have been struggling since last year to catch up on certain fixed expenses and it appeared that I finally had enough to catch all of them up. So I did.

Except I forgot a bill.

Again.

Well, at least I caught up on the big ones. But I digress.

When I moved here to Maryland in January of 2003, I had not done my 2002 taxes yet. I was freshly separated from my wife and I had no idea how to file. I couldn't file married filing jointly. I didn't know how my wife was filing and that made a difference for some reason. It was just too confusing to me. Anyway, after a rough draft of my tax returns, it appeared that I was going to have to pay in, and I didn't have the money.

So I just didn't do them at all.

The next year, I had been here a year and I knew to file single. My son had come to live with me in October of 2003. I thought I had read somewhere that if your dependent kid lived with you for any part of the year, you could claim him as a deduction. But a brief phone call proved that I had heard that wrong. Also, another rough draft showed I would have to pay again.

So, I didn't file that year either.

Last year, I just didn't file. I made no excuses. I just didn't file. I figured I would have to pay in again.

This year, after pulling my son out of driving school, and haggling with his driving school teacher over the refund, she informed me she could do my taxes for me at a discount. It seems she is not only a driving school instructor, she also works for Jackson Hewitt.

So I brought my taxes to her. For all 4 years.

She started working on them and only had to call me a couple of times for additional information. I had to call the IRS to have copies of my 2004 W4 forms sent to me because I had somehow lost them.

Shortly before she was done, she called me on the phone to tell me that my expenses for last year amounted to more than I made. I explained that was impossible since I actually had not starved to death during the year, therefore I must have had income. I had to go in personally for her to explain that to me. The IRS allows a certain amount per mile for us couriers and so, the expenses incurred amounted to more than I made. Hence, I had no taxes to pay for 2005. None.

And I am not among the top 1% in income in America.

Eventually, after more than a month in her possession, she finally called me and told me she was done. Except for the 2004 State taxes. She couldn't use the copies of the forms sent to me by the Federal IRS to do the state forms. I don't know why.

I asked her if I had any money coming back and she said yes. I asked her if it was going to be enough to pay her fees. She said yes. Now, I was getting excited. Next I asked her if the refund would be enough to cover the back taxes she said I owe from 2002 and 2003.

She said YES!

"You mean I am going to have some left?"

"Yes", she said, rather unemotionally, too unemotionally for my taste. Then she said she was sending me information on the results.

Well, friends, two days later I received, in the mail, a letter outlining the disposition of funds. I owe money to the IRS for the years 2002 and 2003, but the government owes me for 2004 and 2005.

The only problem is, I can't file my taxes without paying Jackson Hewitt first. And I don't have the funds to do that. Fortunately, by electronically filing for this year (and this year only), I could file this years taxes without having to pay them their fees. They simply take their fee directly out of the refund.

So, this weekend, I received my first refund in the mail. Then, I immediately took that money down to Jackson Hewitt, and paid the fee for filing my 2004 taxes. I will get that money in about 6 weeks. Then, I will use part of that to pay the fees for 2002 and 2003, and also to pay the back taxes that I owe.

I will end up $1,770.00 ahead.

Whew!

15 comments:

Goat said...

Even a blind squirrel finds a nut on occasion, pay your taxes, you got very lucky.

Poison Pero said...

$1700 ahead? Nah, it just means the SOB's got to play with your $$ all year..........AND YOU DIDN'T.

I've long paid about 35% of my taxes on Tax Day!........It's not too tough to figure out how much to withhold, and put in savings till April.

Better in my bank than in the pockets of some dirtbag who refuses to work for a living.
--------
Hope you had a good Easter, Mark.......And the rest of you as well.

Lone Ranger said...

Who says you can't be wounded by a blank? (odl joke) There were a few times in the past 10 years when I walked out of the tax office sweating and wanting to vomit. But this year I got a refund even from the state of VA, which has never happened before. The income tax is primarily what is wrong with this country. By the time the various levels of government are through taxing every human activity, you've lost half your income. Result: both parents have to work just to put food on the table. Parents don't have the time or the money to give their kids the attention they need. The feds alone took a quarter of my income this year. That money goes to the federal government to fund things they shouldn't be doing in the first place. Then we elect Senators and Representatives to try to get some of that money back to the states. So we don't vote for the best statesmen, the people with the best ideas, the best leaders, we elect the most grasping and venal. As a result, we have people like former Ku Klux Klan Kleagle Byrd sullying the Senate simply because he can bring home the pork. The entire income tax system leads to corruption. I guess that's why the Founding Fathers didn't impose it on us.

Mark said...

I ended up 1770 ahead, Pero. I don't pay taxes! Being an independent contractor, I don't have taxes witheld from my paycheck. I get it all, and then as the end of the year, I get more. This is yet one more reason to keep the Republicans in control.

Francis Lynn said...

Whoa, whoa - what happened to failure to file on time penalties & failure to file at all penalties, plus the interest on those charges? They can get hefty.

Mark said...

What happened to them? They are included. I think.

Etchen said...

Woohoo! That's fantastic! Oh, I;m not sure, but I think that there is a grace period for not filing your taxes, and I know for sure that at the beginning of the year, they had a no questions asked...where you could file old taxes without penalties. How do I know this? Well, let's just say last year, I had to make use of this offer, b/c I had forgotten to file the previous years taxes (actually, I just forgot to mail in the suckers and when I found the envelope, I was too embarrassed to send them in)

Dan Trabue said...

"I ended up 1770 ahead, Pero. I don't pay taxes! ... I don't have taxes witheld from my paycheck. I get it all, and then as the end of the year, I get more. This is yet one more reason to keep the Republicans in control."

Maybe I'm failing to understand, but you don't pay taxes and you got a refund? Doesn't a refund infer you're getting money back?

rusty shakelford said...

Its called tax credits Dan. You see you can take deductions until you hit zero, but credits go below zero and you end up getting money back. So next time you hear some Democrat yelling about the poor not getting a big enough tax break, ask yourself, why would someone who doesn't pay taxes need a tax break.
But Mark must be a liar because the democrats said only the rich will benefit from Bush's tax plan.

Mark said...

Dan, i get a certain amount per mile for my mileage. If my expenses go over my income I get money back.

Dan Trabue said...

So, you're taking money free from the gov't that isn't yours? Ain't that against the Conservative Credo?

Goat said...

This is why I support a consumption tax and doing away with the IRS as we know it. Alexander Hamilton felt this was the best way as it could not get to high then consumption would drop, a market based ideal. Hamilton is the father of our economy and had much to say on this. Todays Federalist Patriot will give you a glimpse.

tugboatcapn said...

Mark Said...

"Dan, i get a certain amount per mile for my mileage. If my expenses go over my income I get money back."

It works that way with over the road truck drivers too.

You can claim as much as $45 per dieum for every night you stay away from home. I can't take advantage of this anynore, since I am a day-tripper, but I have gotten back as much as $5500 in the past because of it. (This year, the wife and I almost cut it too close. We barely broke even.)

Truck drivers can also deduct any tools, clothes, electronic toys, DVD's, shower fees, and basically anything else they buy on the road from their taxes.

We are almost at the point in America where a majority of americans will not pay any taxes at all.

When we hit that point, we will never again have any meaningful Tax Reform.

Goat said...

I agree with Pero, I play with it so I get a very small return or payment, no need to give them a false notion of free cash. Pay your taxes on time , legally and elect those that want to lower them and reform the system drastically.

Lone Ranger said...

Did evil conservative teacher abandon her blog?