Taxes… Late Again!

Well, it is that time of year again and as has unfortunately become an annual tradition we have filed an extension on our taxes. I was really hoping to get them done on time this year and had even lined up a new accountant but, with everything that has transpired over the last few months, it just wasn’t going to happen before the deadline. While I have much of the material and receipts set aside for this endeavor, I still need to print out a swath of statements and organize the mountain into the different deduction categories. It is definitely an undertaking that I am still not looking forward to.

The real issue that I am finding now is in the upcoming schedule that doesn’t seem to have too many free moments available to get the work done. Well, at least the next couple of months as the summer should provide enough time to pull everything together. This is a real issue, on the one hand I don’t want to spend the hours preparing the paperwork while on the other I really don’t want to give the government more money than I have to give them. After all, we are the ones that had to work for the money.

However, this rather large dilemma is actually proving to be a good thing as it is forcing me to take the tax proposals on the table by the various presidential candidates into more serious consideration. Essentially, this eliminates those whom I have already seen as a detriment namely both Democrat candidates. Basically, I have to look at what kind of financial position I will find myself in should Trump, Cruz, or Kasich take office. Well, at least what is being proposed… I won’t fully believe any of the ‘plans’ until they are implemented. And, let’s be honest, Kasich is done so I am going to focus on Trump and Cruz.

Simply put, you can go with an overhauled 10% flat tax as proposed by Cruz or a simplified graduated tax rate starting with those earning more than $25,000 ($50,000 for married couple filing jointly). For one, a flat tax is something that is manageable across the board and eliminates much of the overhead associated with the tax system (i.e. it would cut government spending) while a revised system would reduce the tax revenue while doing nothing to reduce the burden of associated overhead. Contrary to what many would want you to believe, the flat tax is sustainable and a sensible approach. Plus, I really don’t have a lot of confidence in someone proposing a tax structure when they themselves have spent years paying as little as possible while declaring bankruptcy many times over.

So, in the end, my support of Senator Cruz has been reaffirmed. It has been a long road getting here (he is the third candidate that I have decided to back) but we are now at the point when he is the one candidate that makes sense to me. Additionally, I like his decision to name a running mate in Carly Fiorina who brings a more moderate voice to the ticket as well as a long track record of executive business experience. Now all we can do is wait and see how the remaining primaries play out and what kind of contest we have during the national convention. It will certainly be interesting.

Six Months Later… Taxes

We were a little busy earlier in the year and while it has been a long time coming and many hours sitting at my desk, our taxes are finally done! It should be no surprise that after having printed out all our statements and highlighting our expenses I ended up with a packed well over a hundred pages thick. Not the biggest and not the smallest pile that we have handed off to our accountant. Of course, unlike last year, I did pull aside most of the 2015 documents needed for April… maybe next year we can simply file our taxes rather than an extension.

However, while I am hopeful for a small refund (even with this administration), it is little relief considering the bill that we will have to pay for having our taxes prepared. It is a flat rate but a rather steep one and it will take a pretty hefty sum to balance out that particular expenditure. By the time all is said and done, like every other year, I really have to take a closer look at the proposals for a simplified tax code rather than the hieroglyphics currently in use.

I believe this is a great time to start reaching out to the brethren and finding someone with whom I can trust our financial information. The place that we currently use definitely served its purpose for a while but the friend of the family that once handled our returns has long since retired and we have been passed around annually since then. They are strictly a service firm at this point rather than a place where there is a personal connection… time to move on.

It really is amazing when you think back on how long it takes to pull everything together especially when it is done in one shot rather than slowly over the course of the year. Well, it is a long process for me as I prefer to itemize all of our expenses especially the outrageous amount of medical expenses for which we are now responsible… thanks Obamacare! We could just file a simple return but why simply surrender part the money we earned over the past year? After all, the government didn’t temp for me during the year to take the day off so why should I pay them more?

In the end, the most important thing for us, especially now, is that this can now be marked as complete and we can devote our focus on many more important things in our life… especially the little stinky one. It is just annoying when tasks such as this occupy so much of my time, time that can be better spent elsewhere. Hopefully this is something I can avoid next year now that I have all the supporting documents up to date and an office is some kind of order even though it may not fit the definition of being organized.   

Pulling Papers Together

 

When my wife and I decided to resume our house hunt this summer I knew that, at some point, I was going to have to spend a fairly significant amount of time in my office pulling all the documents together needed to apply for a mortgage. While the prequalification process was relatively painless and pretty straightforward the subsequent list of items needed seemed a little daunting when I first read through them in my email. There was nothing out of the ordinary and it could have been really quick had I been up to date with all my filing and organization but that certainly was not the case.

Following my conversation with the bank to get prequalified, I received the following list of items needed for underwriting:

1.)    Copies of drivers licenses and copy of a credit card (for ID purposes)

2.)    Copies of W2s from 2013 and 2014

3.)    Copies of full federal tax returns (form 1040) from 2013 and 2014

4.)    Copies of pay stubs from the most recent 30 days – (last 2 pay stubs if you are paid bi-weekly)

5.)    Copies of bank/investment account statement covering the most recent 2 months (most recent quarter for quarterly statement) – please include every page of the statement even if it is blank

6.)    Copy of fully executed agreement of sale (when available)

7.)    Copy of will and death decree to document inheritance

Again, not a problem if everything were neatly filed away and labeled. It took some time and a lot of patience but I was finally able to get everything ready to go. It was a time consuming process and one that could have probably been put off for a while but I wanted to be able to get things moving rather quickly as soon as we found our home.  

Of course, while pulling all of these items together I could help but think to myself that I should probably just put aside all the items I need to finally file our taxes this fall. There is a heck of a lot of overlap in the two lists and this mortgage process would be the perfect impetus for starting that tax file. And I do mean start as our taxes are an annual pain in the rear consisting of hundreds of pages of supporting documentation for the purpose of itemizing all our deductions. The mortgage underwriting documents are done but the tax documents still have a long way to go. Thankfully, I have a really comfortable office chair and my files are now in better change then they have been in months. I just hope I don’t have to break out the check book again!

Taxes Done?

The past couple of years have made me dread this particular day on the calendar. Having received hefty bills from the federal government and not enough funds to cover the costs, we have filed extensions. Seems like this is the time of year when everyone does some spring cleaning especially the government which likes to clean out your bank account. This year, we have the funds to pay what I am certain will be a ridiculous amount but don’t have the time to pull everything together. The extension streak is alive and now in its third year.

We were actually keeping things organized for much of 2014. This was in large part due to having to pull together all the documents in early fall before that extension ended. It was rather easy to put some of those items aside in a folder designated for the current year. Yep, things were pretty organized by the time December came around.

It really is amazing how cluttered things can get when you move from one place to another. Not the space in which we were living but in the individual boxes where all of our papers and documents were relegated. All of the organized folders seem to blend together in a pile of muddled ink... this reminds me, we have to set aside those receipts from the move. This is only accentuated by the fact that all of the tax forms arrived the following month so now what was once consolidated into one place is now in a few places waiting to be collected again.

Normally it wouldn’t be a problem pulling things together as in the past I have had time to do it. And that is the key. February and March were, to say the least, busy months. With all the hours that I have put in at the office and doing my best to protect the time that I have with my son, there are few minutes remaining during the day when I can take care of all these other projects that keep building up. Time is not being kind at the moment.

It doesn’t help that the days seem to be evaporating before us. Just as we get ready to plan for one thing or another, the pages of the calendar have turned and the time we once had was gone. Other things seem to pop up now and again as well chipping away at the days when we thought we would have a chance to catch our breath. But, as we have done many times over, we will find the time to get the taxes done and hold our breath waiting to hear the final total… hopefully the news will allow us to breathe afterward.

Feeding The Animal House

The only day that is dreaded more than April 15^th is October 15^th. This is the last chance day for those of us that, for one reason or another, were unable to file our taxes in the spring. This is the day that we have been hoping that would, somehow, never come or that the calendar would just simply skip a day. And for some of us it is not just a day of inconvenience, it is a day when we take on an additional financial burden (some greater than others).  

Every day that passes and every hour I sit at my desk, I know that I will never receive my full salary for that day. It is the price we are forced to pay, and pay, and pay again in the seemingly infinite deductions that are pried from our pockets to fund things that we would never support on our own. Don’t get me wrong, there are many things that we must contribute something to, but there are many, many things that we should not be forced to pay.

This happens each and every day as we watch about a quarter of our salary evaporate (for some it is a much higher percentage). However, it doesn't end there as when we finally get that money in our pocket it continues to be chipped away throughout the day as we are forced to pay more taxes… service, sales, gas, real estate, etc. Given all of these tax attacks, it is safe to say that the average person loses about 40-50% of their pay just to taxes. The remainder, of course, has to cover all the costs of living including the bloated Obamacare costs that have recently latched on to our wallets.

If we see a few extra dollars in our bank account at the end of the year we feel as though we might have won that round. However, the government has one final punch to throw to see if it can take us down. While many take it on the chin and get it over with as soon as possible but there are a few of us that duck and weave until we can no longer put it off. For most, more than anyone would care to admit, this final poaching is what takes us down and determines our losses for the year. This is where we find ourselves now… trying to get up before the referee counts to 10. Next year, another round, and more money being sent to the animal house to never be heard from again!