Jan
07
2009

  I'll Just Wait For TurboTax

Bleh. I've been trying to update my tax spreadsheet to calculate how much I've got to pay for the 4th quarterly estimated payment. I haven't had to make any payments so far this year since Terry had a huge chunk withheld from his 2007 bonus which was paid out last February. It was calculated as if he'd be earning a salary all year, but he quit in June, so his withholding pretty much has covered both his earned income and our unearned income.

Until last month-- in December we got the final installment from the sale of AFS (remember that, way back in 2006??). And because income was not earned even remotely evenly throughout the year, I'm going to have to fill out the annualization form to avoid underpayment penalties. If you've never filled one out, consider yourself very lucky. It's extremely complicated since you essentially have to figure each line of your tax return based on income in different periods; 1/1 to 1/31, 1/1 to 5/31, 1/1 to 8/31, and 1/1 to 12/31. Note that these are not quarterly intervals, so you can't just look at quarterly bank and brokerage statements. Nooooo, you have to @#$# add up each month of transactions. Which wasn't bad when I wasn't calculating income FROM OVER THIRTY different income streams.

And oh yeah, if we have to use the married-filing-separately status, I have to sort each account out by ownership, and divide all the joint accounts in half, and fill out TWO forms. And guess what else? I've got to break out all my itemized deductions by date as well. Which again, wouldn't be so bad if we just owned one house and made charitable contributions to just one or two organizations. But our Schedule A is jam-packed with all kinds of deductions, mostly due to the crazy amounts of state taxes we pay since we've got nexus in three states, and property in two. And even better, I have to CALCULATE THE ITEMIZED DEDUCTION LIMITATION for each @#$@# annualized period if our ANNUALIZED income is over the proscribed threshold, which is not the same as our income to-date during each of the periods. It's crazy complicated, trust me. Especially if I have to figure it for multiple filing statuses.

If I wasn't a CPA who actually specialized in individual taxation before I turned corporate accountant, I would not be doing all this, I'd have to pay someone big, big, big bucks to figure it all out. The thing is, knowing what I know, the odds are quite good that whatever professional I hired, no matter how expensive they were, would make some mistakes. Which is why I don't bother, and each year face the misery and power through it myself. Seriously, if I knew any other accountant who could handle it for <$10,000 per year, I'd hire them. Of course Terry wouldn't be willing to even pay that much, which is why we're not going to find anyone to do the job. Except for me. Because I'm highly motivated to do the work because I could go to jail if I don't. Ok, ok, it's more likely I'll just have to pay fines and penalties, but still.

This year is especially bad because of the aforementioned calculations I've got to do before January 15th in order to avoid underpayment penalties for the 4Q payment, but also because I'M HAVING A BABY during tax season. I suspect I'll not be filing on April 15th this year. I'm actually going to try to get the taxes done as soon as all the investment forms are released (usually by 1/31, some by 2/15). I don't have to wait for the forms to do the bulk of the work, when they arrive I'll just update things like fund distributions, etc. But if I can't get the taxes done by mid-March, I'm afraid I'll just have to file and extension and delay the pain until October.

But back to this original 1/15/09 payment problem-- I've been trying to update my spreadsheet all afternoon, but I just can't focus on it. Without the ADD meds, it is way too complicated for me to keep track of it all. So I'm just going to wait until I go into town on Friday for Quilt Club, and pick up this year's copy of TurboTax at Sam's Club. And fill out the information on a form that will automatically do the busywork math. I'm still going to have to breakout each income and deduction line manually by date, but at least once that is done it will automatically make adjustments for married-filing-joint vs. married-filing-separately if necessary.

Ohhhh, it makes me so tired even thinking about all the work these taxes involve. But at least there is a bright side-- 2008 will be the last year of really complicated stuff. 2009 we'll only have to file in VA and maybe in NJ if it turns out we have to pay any taxes on the gain from the sale of our condo there. But 2008 is the last year we'll have to file in NY at least. And 2008 is the last year I've got to attach special forms for the installment sale of AFS-- those preclude me from filing electronically. Next year it's possible I might be able to file electronically without the fuss of assembling actual returns with photocopies attached all over the place, going to the post office, getting the certified mail forms, etc. etc.

And on one hand, I'm actually hoping that our income will be low in 2009 so we can take advantage of that and convert our regular IRAs to Roth-IRAs. But on the other hand, of course, it would be nice if I could make a lot of money trading. It would be very validating from a career perspective. Since I'm not much of a trader if I don't show profits, now am I?

Plus, I'd have a little more leverage to push through and hire out construction of the pond and garage and a guest cottage. Because right now, it sure ain't in the budget. Although I did make money trading this year, it's just barely enough to cover all our expenses (but our expenses are admittedly high since we travel a lot and have two homes). I've got to really step up my game if we are to continue with the same somewhat luxurious lifestyle that Terry's old job allowed us.

But it's nice that there's no crisis even if I don't make a lot of money trading, we're in a good position to simply reduce our expenses. We'll grow our own food, get chickens, are still on the fence about a dairy cow. We just have to pay for utilities, insurance and taxes. And we're hoping Obama throws some cash out to subsidize wind power so we can get a grant or tax rebate or something to put up a windmill. Our electric bill isn't particularly high, so it's less about the economics than we just think we would be the coolest cats on the block if we went off the grid, you know? Very survivalist. Like we were in Idaho, or something. Actually, more like we own a private island. Except that we're landlocked. But we will be king and queen of our own farm, not beholden to outside forces, living completely in our own little kingdom. With our own little prince or princess, too, what fun.

Hmm. In what room should I put the throne? I think I might build one for the yard. That would be a hoot. I could sit in it to receive packages from the UPS guy.