Ugh, dreaded Tax Day is almost upon us.
Of course our Type A personalities forced us to file weeks ago, but I still thought the experience was worth sharing. We had prepared ourselves for an absolute nightmare...
Last year we decided, for the first time, to hire an accountant to file our taxes for us, since we had some complicated items like filing jointly for the first time and the sale of a home that Stew and his brothers inherited. This stuff seemed a little too complicated for Turbo Tax to handle, and we didn't want to make a mistake, so we found someone local who helped us file for a small fee.
Last year sucked.
For the first time ever we had to pay, even though for our entire working lives we were both used to getting pretty decent returns. Enough to pay for a vacation or something at least. But last year we had to pay thousands of dollars in back taxes to the IRS due to the sale of the inherited house... something about landlord taxes since it had been a rental for the prior ten years or something. That hurt.
Then our accountant warned us that due to changes by the Obama Administration, we should be prepared to pay that much or more this year as well.
Oh and the kicker... When we bought our condo in 2008, we took a government New-Home Buyer Credit of $7,500 which had to be repaid in equal payments over 15 years. Don't even get me started about the fact that a few months later new homebuyers received the same credit, but were not expected to pay it back. The point is that since we sold our condo, we were expected to pay back the entire credit on our next tax return. So that meant an additional $6,000 added to any other taxes we would owe this year.
But resigning ourselves to what was inevitably coming, for the past year we saved and saved to make sure we could pay all our taxes without going into debt. But in the meantime, Stew did some research...
And this is where I found out that sometimes the government doesn't suck.
Apparently there is a loophole... since we sold our condo at a loss, we were not required to pay back the credit after all! And on top of that, Uncle Sam decided to throw us an additional few thousand dollars back as well!
We still have no idea what that accountant was talking about, but needless to say we didn't use him again, and went back to filing on our own via Turbo Tax. It was a bit of a long, complicated process, but Stew is a smart cookie and he figured it all out. And my only responsibility in the whole thing is to decide how we want to spend all that extra cash!
This has been another edition of...
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