The Tax Man Cometh!

[apl68]

Yesterday was the last day to bulk-order additional tax forms.  We went ahead and ordered some more just to be safe.  We still have many patrons who depend on us for paper forms.  The consolidation of multiple forms into the 1040 packet has done a lot to simplify ordering.

[cathwen]

We were just informed that we owe $5000 extra in taxes because a certain state's dept. of taxation thinks we live in a major metropolitan area in a that state.  We do not.  I still work online for one of the universities there, but we haven't lived  there for twelve years. I want to tell the tax people to go knock on the door of wherever they think we live and see who answers.  Then to come here and do the same.  But somehow, I think this will be a long, drawn-out process that will ignore overwhelming evidence and logic.  My husband is in touch with our tax person.  Ugh!

[Harlow2]

Fingers crossed that they can fix it quickly.

[hmaria1609]

Finished my taxes yesterday! I like Turbotax's "import" feature--it meant less manual typing in some sections.

[clean]

I have been working on Turbo Tax all damn day so far.

At THIS point I am waiting for my bride to deal with her crypto ventures.

You do not get proper tax forms from Coinbase.  I warned her about this some time ago. In November, just after we got married I had her sell Everything!  and go to cash for 30 days. That way she would, if she continues to trade, have a starting point and we can develop a spreadsheet so that she can track her trades. 
Ive seen issues on the TurboTax help screens that the coinbase (which uses cointracker to provide SOME information) doesnt always load. 

So IF we are not able to download something, then she will spend a day or 2 to FIRST find every Sale in 2020. THEN she will have to go back and identify the source and cost basis of each sale.  THEN she can get a profit/loss for each one.

AFTER ALL OF THAT!  SHE (yes SHE) will have to transfer that information, one trade at a time, into turbotax! 

Maybe AFTER all of THAT she will be dissuaded from her bitcoin gambling  investing. 

I have been suffering some pushback because she sold her bitcoins (at a profit) in the 18K range, but it has been hitting near 60K, so she "lost" $5K or so (I think) because I had her sell and sit out part of the run up.

(Of course I have reminded her, "You never lose money when you sell for a profit".  )

We will SEE if this works.

[Juvenal]

I gave up, years ago, taking the time to try to figure out my taxes.  The blizzard of paper that comes in, "Important Tax Document," chills the soul.  I've used an accountant, long since.  I do the rough work; he does the picky work.  I write him a check.  I get hours more sleep that way.  Money?  A distraction.

[clean]

the Bride reports, "It will be a lot less transactions this year".  My reply, "I figured this would cure you!"

It is probably nearly done.

I didnt get any stimulus checks because I made too much money as a single person.  I was hoping that getting married would come with a financial boost. So far, it doesnt look like Im getting any checks.  We did delay doing the taxes this time, at least a little, until she got her last stimulus check.  We might have to pay it back, so we have stashed it in the savings account.  We may even make a dollar in interest on it!!

Ill have to do some other research to confirm that I am not due anything now that we have the full numbers. I had already done an estimate and it didnt look like I would qualify, even after married.  Now that we know ALL the numbers, it is not looking good for stimulus! 

[ab_grp]

I have also been dealing with taxes on and off for days and am currently trying to figure out various entries.  Thankfully, we have an excellent accountant, but I don't like black boxes and don't trust just signing the completed forms.  I like to be able to figure out at least the broad strokes ahead of time to know what to expect, and it saves some time given that I thoroughly check what our accountant does anyway.  I caught some big issues from our previous accountant, so I just feel more comfortable doing my own calculations in the background and then trying to understand any discrepancies that occur.  However, our taxes are somewhat complicated, and my brain is about to ooze out.  Luckily, no cryptocurrency, at least! Good luck with all of that, clean.

[clean]

ONE MORE STEP!!

I have looked over everything and it seems to be complete now. 
But to e-file, I need HER tax form from last year.  She THINKS it is at her parents' house.  (Her father paid to have the taxes done for all of the kids as they had some sort of family limited partnership).  It made no money, but is a pain in the ass to fill out the tax documents in TurboTax.

The document is a K1 I have dealt with K1s in the past.  I owned some stocks that were really limited partnerships and the tax issues were such a pain, I decided to sell them! 

So maybe in another few days I will be able to file!  So glad that I didnt put it off until May!

Im not a happy hubby when I have to deal with all of these forms, and going online to download everything, or go online and take a picture of what I find online, and then entering it... So I started on this about 10 am, I had lunch for 30 minutes, and I m ALMOST done.

AND I actually have 1/2 a clue how to do taxes! 

(Though tracking down the Bride's information was no small part of the day either. Hopefully, next tax year will be easier!)

So MAYBE Ill be able to file by Wednesday!

How are YOU progressing?

[Puget]

Done a few weeks ago-- only took a couple of hours to do both federal and state, with the free fillable forms. I owed $350 to the state but got more than $2000 refund on the federal, thanks to mortgage interest, property tax and state tax deductions. Welcome, but made me think about how much the tax code favors home owners over renters (this being my first full tax year as a home owner), which is pretty regressive. I think some portion of rent aught to be deductible for equity.

[ab_grp]

We were so, so glad that last year was the final time we had to deal with a K-1.  And then in the summer they distributed corrected forms! So we had to file amended returns.  And then the government thought we owed them money, which we didn't but were advised to just pay it and get it back this year.  At least it should be fully in the rearview at this point.  What a pain in the everywhere.  When we initially met with our accountant, she was visibly displeased that there was a K-1 to handle, so that was definitely a red flag.

[clean]

I think some portion of rent aught to be deductible for equity.

The benefits of home ownership for a large portion of the US Taxpayer base is gone.  Why should there be a benefit to renters?

Especially with the current standard deduction, the benefits of home ownership are quite reduced, and for many eliminated.
You can (perhaps) deduct mortgage interest and property taxes.  You are not able to deduct anything for the equity in the house. Nothing for insurance, nothing for maintenance or repairs, cleaning, mowing, homeowner's association dues, (expenses that a rental company may be able to write off)...

However, given the current value of the standard deduction, a lot fewer are able to deduct those costs because they do not surpass the standard deduction value.  One of the reasons I paid off my house,  nearly a decade ago, was that my mortgage interest no longer allowed me to really deduct the expenses. That is the worst of both worlds! Im paying the bank and NOT getting a deduction for it!

Then I started timing my property taxes. Every other year, I would pay the property taxes in January, and then December, so that every other year, the property taxes, two years together, were marginally above the amount of the standard deduction.  Then Trump removed the personal exemption and increased the Standard Deduction, so even that was lost.  Whether I rent or own, I get the same tax treatment.

Tax policy is often used to encourage things that the government views as desirable (home ownership) , and discourage things that are not desirable (liquor).   

So I am at a loss as to why renters should get a benefit for equity?  They have no equity. 
(and if the government's income is reduced, what services should it cut, or what other taxes should be increased to offset the cut?)

[Puget]

I think some portion of rent aught to be deductible for equity.

The benefits of home ownership for a large portion of the US Taxpayer base is gone.  Why should there be a benefit to renters?

Especially with the current standard deduction, the benefits of home ownership are quite reduced, and for many eliminated.
You can (perhaps) deduct mortgage interest and property taxes.  You are not able to deduct anything for the equity in the house. Nothing for insurance, nothing for maintenance or repairs, cleaning, mowing, homeowner's association dues, (expenses that a rental company may be able to write off)...

However, given the current value of the standard deduction, a lot fewer are able to deduct those costs because they do not surpass the standard deduction value.  One of the reasons I paid off my house,  nearly a decade ago, was that my mortgage interest no longer allowed me to really deduct the expenses. That is the worst of both worlds! Im paying the bank and NOT getting a deduction for it!

Then I started timing my property taxes. Every other year, I would pay the property taxes in January, and then December, so that every other year, the property taxes, two years together, were marginally above the amount of the standard deduction.  Then Trump removed the personal exemption and increased the Standard Deduction, so even that was lost.  Whether I rent or own, I get the same tax treatment.

Tax policy is often used to encourage things that the government views as desirable (home ownership) , and discourage things that are not desirable (liquor).   

So I am at a loss as to why renters should get a benefit for equity?  They have no equity. 
(and if the government's income is reduced, what services should it cut, or what other taxes should be increased to offset the cut?)

Perhaps I should have used the word equality rather than equity -- I didn't mean anything regarding equity in the home.

In a high CoL, high tax, area like where I live, the deductions (interest, property tax, state income tax) are generally far more than the standard deduction. Renters also pay high rent here but get no deduction for it. I don't think that's particularly fair.

As for how to pay for it, how about raising taxes on the rich? (Not an answer you'll like I'm sure).

[dismalist]

I think some portion of rent aught to be deductible for equity.

The benefits of home ownership for a large portion of the US Taxpayer base is gone.  Why should there be a benefit to renters?

Especially with the current standard deduction, the benefits of home ownership are quite reduced, and for many eliminated.
You can (perhaps) deduct mortgage interest and property taxes.  You are not able to deduct anything for the equity in the house. Nothing for insurance, nothing for maintenance or repairs, cleaning, mowing, homeowner's association dues, (expenses that a rental company may be able to write off)...

However, given the current value of the standard deduction, a lot fewer are able to deduct those costs because they do not surpass the standard deduction value.  One of the reasons I paid off my house,  nearly a decade ago, was that my mortgage interest no longer allowed me to really deduct the expenses. That is the worst of both worlds! Im paying the bank and NOT getting a deduction for it!

Then I started timing my property taxes. Every other year, I would pay the property taxes in January, and then December, so that every other year, the property taxes, two years together, were marginally above the amount of the standard deduction.  Then Trump removed the personal exemption and increased the Standard Deduction, so even that was lost.  Whether I rent or own, I get the same tax treatment.

Tax policy is often used to encourage things that the government views as desirable (home ownership) , and discourage things that are not desirable (liquor).   

So I am at a loss as to why renters should get a benefit for equity?  They have no equity. 
(and if the government's income is reduced, what services should it cut, or what other taxes should be increased to offset the cut?)

Perhaps I should have used the word equality rather than equity -- I didn't mean anything regarding equity in the home.

In a high CoL, high tax, area like where I live, the deductions (interest, property tax, state income tax) are generally far more than the standard deduction. Renters also pay high rent here but get no deduction for it. I don't think that's particularly fair.

As for how to pay for it, how about raising taxes on the rich? (Not an answer you'll like I'm sure).

Nah, get rid of the mortgage interest deduction altogether!

The beneficiaries were those who used it first. After that, it's effect is n house prices.

There is no good reason for its existence. If one is going to deduct interest as a cost, one must add imputed rent to income! That doesn't happen, so abolish.

The poor never benefited from the deduction anyway.

The use of the deduction for high cost homes has been more and more limited, so it's on the way out anyway.

[clean]

how about raising taxes on the rich? (Not an answer you'll like I'm sure).

In the olden days, the promise was "a chicken in every pot".  IF you had 2 chickens, you were 'rich'?

"rich" is a meaningless term. 

Is "rich" wealthy?  si someone wealthy IF they have saved and saved  (exchanging current consumption for the promise of future consumption) and invested wisely in a retirement account they are not even able to access until they leave their job, should they pay more because they didnt consume earlier?

IS 'rich' income? 
President Biden says that he will not increase taxes on anyone earning over 400K.  That is great, as I dont make that.  However, not too many years ago, you were 'rich' if you and your spouse earned over 44K while collecting social security.  That value was not indexed, so today if you earn more than 44K a year (including 1/2 of your social security, plus interest on tax free bonds!), you pay taxes on your social security because you are NOW "rich" by THAT 1980something definition.