Monday, October 5, 2015

Income Tax

Some people think the tax deadline is April 15. With extensions, it seems to mean June but really means October 15. That is the drop dead deadline. Well, not really. Actually, if the government owes you money, you can file it even later.  And if you owe them money you can pay a penalty and interest when you eventually file. Every year, the weight of taxes hangs over our heads until we file and get it over with. It is a complicated matter full of receipts and calculations and percentages.
During the year, I have a box. All receipts go into the box. At the end of the year (theoretically) the box is organized and the year is separated out by type of bill, etc, in monthly order and misc. useless stuff is tossed. This is theoretical because it doesn't necessarily happen in that much of an organized way.
I start with a separate check register for each year. Tax deductible items are circled in the book to remind me to look at them- car registrations, medical bill payments, Turbo tax purchase, whatever may be a deductible item. Dec 31, the register is dumped into the box with everything else and a new one is started. This has been the best plan so far.
During the next couple of months, all the various 1099's and other documents arrive so that we can actually prove our income and expenses. These go into the separate tax folder. My husband thought of this part.
Usually, around the end of March , we decide to file an extension. It requires us to do some preliminary work on the taxes to see if we have paid enough. We almost always pay way too much, but you have to do this anyway. After the extension is filed, we congratulate ourselves on getting this far and try to find time to sort the box.
You may have noticed that it is now April and there are 4 months of receipts stacked on the old receipts. This makes the job more complicated. We should have a second box, but that would be way too organized for us.
In June, we start to point fingers at each other about who will do what when and by the end of July we have about 1/2 of the taxes done. But it is too hot to sit on the floor and sort the new year receipts from the last year receipts. August the pressure is on. September, sleepless nights from heat and worry about taxes.
Finally, the need overcomes the lethargy, and I sort the box. The first half of the tax prep is already entered and I am the only part letting down the team. Papers scattered over the floor, fan on, stapler in hand- I am done in 3 hours. Actually, I am done sorting, but still need to enter the information on the tax program. Another 2 hours.
This year, we were done before the drop deadline. Not by much, but better than last year. I also spent time organizing this years documents before putting them back into the box. This will make January easier. And I have resolved to get a second box so that there is only one year at a time in the box.
Just so you know, I have been doing this for 40 years. I am not a tax newby. I am just not very organized at home.