Sunday, March 7, 2010

Life and Taxes

The voicemail sounded grim. "I have bad news honey." Then a pause "There will be no tax refund this year. In fact, it looks like we are going to owe taxes." Then she gave a number that literally made my jaw drop.

I quickly called back, wherein she let me know that she had made a mistake on the initial form. Relieved I said, in my best Fred Sanford imitation, "Are you trying to give me a heart attack?" "Because you know I'm over 40 now. I could go at anytime honey!"

"Well, It's not as bad now, but....we still owe" she indicated. True, the adjusted number was much less harsh, but still more than we had sitting around in petty cash. How could this have happened I thought to myself. We have deductions sticking out of our ears. Then we realized that I had over calculated when I had reduced my work withholdings to near zero after Lukas was born. Now we owed.

"There is another figure which we haven't calculated yet that may still reduce that amount." Mrs. LIAYF continued. "We can itemize our state sales taxes rather than taking the standard deduction."

It wasn't a pleasant thought (we had bags and bags of receipts we had kept), but definitely worth a shot. And, at that we began the laborious process of unfolding flattening, and checking every receipt we had accumulated in the past tax year.

Working in tandem, me flattening receipts and calling out amounts, and her reading and entering two figures to my every one, we spent hours adding up what we spent in sales tax.


Unfortunately, most of the grocery receipts yielded no taxes. "It's a good thing we have the tax on all those Starbucks receipts of mine" I joked, to no response. It was a tough crowd.

At some point in the process we started a game where we tried to trump the highest tax amount of the other. My wife even beat me at this game garnering a whopping $9.49 for a Marshall's receipt (Obviously one of hers). Competition or not, I gave her a hoot and a high five.

After a while, frustrated by my slow dexterity with unfolding and looking for the tax amount she told me to just unfold the little papers. That I was faster at that and she was faster at finding the amounts. "You actually think you are faster at both, don't you?" I asked. "Well...yes, I do." She was right.

We trudged on and on. Had we really spent that much in 2009? All the small things for the basement remodel really added up.

Then, just before Lukas woke from his nap, we recorded the last of the amounts and my lovely wife-of all-trades punched the new figures into the tax form and studied the tables. I held my breath. It was a reasonable number for sure! No, we didn't eliminate all of what we owed, but nearly. I felt much, much better afterwards.

In the end, going through all of those receipts certainly wasn't the ideal Saturday afternoon, but it did save us quite a bit of anxiety.
Plus, once Lukas woke up from his nap, it also gave him somewhere new to play...


Anonymous said...

This would be a bad year to get audited...unless you have a u-haul!

Ed said...

For this very reason, we pay a very hefty sum to an accountant. I can not stand dealing with taxes. I literally get sick.

SciFi Dad said...

You can do that with your sales tax? Really? Is that specific to your state, or all states, because THAT is pretty awesome, and something I'd consider doing (it wouldn't be as bad if you maintained the list daily or even weekly).

Captain Dumbass said...

I think there's some blood trickling out of my ear.

Being us... said...

WOW I don't know what is cooler, the fact that you can deduct the sales tax, or as a child being able to jump in a huge pile of receipts!

Mrs. LIAYF said...

The sales tax deduction is pretty recent.

Since 2007, a person filing a federal income tax form can deduct from their taxable income (not from the taxes they owe) the income tax they paid or sales tax. Since Washington does not have an income tax, we can choose either a standard sales tax deduction based on the tables in the IRS 1040 manual, or the actual amount of sales tax we paid in 2009.
The last option means a lot of totaling up receipts . . . very tedious!! :)

ericdbolton said...

Dude, get four more kids like I do. That will pay for your basement for sure!!!

Slamdunk said...

Great photo. The dreaded number crunching for tax season is alive and well here--be glad when it is all done.

Anonymous said...

Ouch. We are going Accountant after this year. I am done. Good luck with those receipts.

PJ Mullen said...

Fortunately for us we are losing our shirt on rental properties purchased when all you needed to do was fog a mirror for the bank to give you a loan. The fact that I have depreciate the physical structure has saved our behinds the past few years. Glad you were able to resolved most of it with the diligent calculations.

A Free Man said...

We went to an accountant this year, not being familiar with the Australian taxation system. I owed loads, not being familiar with the Australian taxation system...

Lady Mama said...

Now that takes patience. Which I have none of. I like the look of jumping in that pile of papers like your son did at the end there. Taxes have this strange effect on me - my eyes start to droop and everything around me becomes swirly... I think I'm allergic.

Knatolee said...

Augh!!! But I'm glad you managed to whittle amount down, and I love the photo of Lukas. :)