~Author unknown, from a Washington Post word contest
HANK: Every year, I mean EVERY YEAR, I promise myself the same thing.
And the promise occurs around April 16. And every year I break the promise.
And every year, I mean EVERY YEAR, I realize that broken promise on (pretty much) the same day. Let's say, around today.
Every year I swear I will not leave my taxes until the last minute. And not just "doing" the taxes, but every year I promise, I resolve, I swear that I will not stuff all my receipts and check stubs and envelopes of convention expenses and invoices and bills from the bookmark guy into a big shopping bag. But, I do.
One year, determined, I actually bought an accordion file, one of those expando things where you can file by category, and then at the end of the year it's already organized. Yeah, that worked for a little while, but then it got too full and the old p
aper bag seemed like the best solution.DO NOT tell me about excel spreadsheets, I just won't do it. First, you make a spreadsheet. Stymied from moment one. So, next weekend, I'm going to dump the bag(s) on the bed and organize and list on a yellow pad and then get a calculator and...Grrr. Grrr. Grrr. And then, after I'm finished, I'll resolve never to do that again.
If I had to predict: I'd say: Jan and Hallie and Roberta are all finished and have sent in their forms to Uncle Sam. Rosemary and Rhys give all their stuff to an accountant and don't have to worry about it. How'm I doing?
JAN: No. I'm not finished, but I do have it all in an Excel spreadsheet.
HANK: Sigh.
JAN: Well, "all" is an exaggeration. Although I do try to record all my bills as I pay them, I'm not what you call a perfectionist. Or even a good "double checker" because there's always an unexplained absence of say.... two months worth of Internet bills or travel expenses. There's always something important missing for no apparent reason, providing great insight into the holes that are in my brain.
HANK: I know! Why do we never learn?
JAN: But Hank, take heart, I'm behind the 8-ball, too, I haven't started nagging Bill yet to get the taxes done, which is BIG part of my job.
HALLIE: In my house taxes is 'men's work' - yes I assemble my income and expenses (nearly done) but my poor husband does the heavy lifting. It's too easy to file an extension!
RO: Oooooh, I think there's only one royal on this blog. My reputation as a princess is somewhat unwarranted - at least in this respect. Yes, Nancy the accountant extraordinaire makes sense of all my little scraps of paper but during the year I keep separate files for work expenses and I highlight those credit card purchases that are work-related. I've never been able to just use one credit card for all work expenses, though, not sure why. It would be very easy to spend a ton of dough promoting our books but I like to make a budget and stick to it.
HANK: Make a budget? What a concept. And I am inspired, Hallie, to get Jonathan to read this. I must say we each do our calculations separately--then off it all goes to the accountant. So we're not actually subtracting line 4(C)sub3 from Line 4 (c) sub2, or whatever.
So how are you all doing? Sent your forms off to the IRS and now patting yourselves on the back? (Good for you!) Or sorting receipts with the rest of us? Any tax tips? Besides, of course, to do them before April?
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And coming up this week: Tomorrow--do you use your family secrets? Wednesday: *fanfare* NANCY MARTIN! (And a book giveaway.) Thursday, bring a cup of tea, because we have short stories for you. And Friday, a truly hilarious thing that took me three times reading it to figure it out. The ultimate lost in translation.
I love spreadsheets because they do the math for me. Of course, putting together my spreadsheets means I have to find all that info from the checking account and the credit card, and, yes, all those little scraps of paper stuffed in the drawer, and actually enter them into the spreadsheet. No, I haven't started yet. But I'm thinking about it!
ReplyDeleteI've been doing our taxes for as long as I can remember, and every year my husband and I have the same dumb conversation. "Do you have your medical expenses itemized yet?" "What? Oh." "Have you received all the bank statements?" "Yeah, sure, they're in a folder. Oh, you want them?" And so on.
Last year, the first year of the three-part book advance added to my teacher's income, I was all organized and checklisty and desperate, because I had the sneaking suspicion that the advance was going to make the IRS sit up and say "Huh? What? You mean this person actually has a pulse? Because we've pretty much been ignoring it, or giving her only the occasional thump on the chest since back in the days when she flipped meat at Whataburger" -- (teacher pay, y'know, and then this sudden hiccup of money). Anyway. I wanted to take the chance for every appropriate deduction. Finally, I Could Itemize! So I did all the tidy and meticulous stuff, hoping to please-God-break-even, and I went to the accountant and we poured over the digits, and he suggested a few other things I could deduct for, like the 8X8 room I write in -- IF I DIDN'T DO ANYTHING BUT WRITE IN IT (move yer illicit love affairs on the space heater elsewhere, was the the metatext). I did wonder about the bathroom off of the office, since I only used it when I was writing, but he had such a face on him I didn't dare ask. Anyway. At the end of the day, I still had to pay a LOT to the IRS. Itemizing saved me ... wait for it ... $26.00. I could have taken the standard deductions and paid a LOT + 26.00 and not had to do all the fiddling.
ReplyDeleteThis year, no matter how much I've spent in support of the book (and I have. I could have put this book in private school. Or sent it off for a tummy tuck and spa holiday in Jamaica), I'm pretty sure I'm still going to pay a lot and it's going to come mighty close to the same amount as if I used the standard deductions.
Next year, however, will be different. Third part of the advance comes in, sure, BUT...
I have just bought, on my own, my first house. As in closing today!
Accordian file, here we come. IRS, please be a little kinder in 2011.
Susannah!! We'reall cheering about our new house! Fantastic! Congratulations!
ReplyDeleteAnd whoa, the mortgage deduction is a treasure. You're gonna be so happy...I mean, even happier!
Raising champagne! And you know what they say about closing documents..just sign. If you read the real total-total payments, you'll freak.
Best $15 I ever spent was on a Kiss of Death (RWA) chapter on-line course on taxes for writers. Yes, it entailed a spreadsheet, and yes, it took a bit of discipline to enter spending, mileage, etc., but all the columns for Schedule C were there, and it took me about 15 minutes to get it into Turbo Tax. Unlike dealing with the 1099-R forms, which hubby's retirement triggered. Clueless on those and will have to get advice from a pro.
ReplyDeleteAnd, as a newbie-ish writer, it's good to know I lost only half as much money as I did last year. I'm making progress.
And ditto on the opening--we should be getting a refund what with hubby's retirement, but that was OUR money all year, and we could have done better than give it to Uncle Sam to use. We sold our house this year, and are trying to find a new one. I want that tax credit!
Make it easy on yourselves, dear Hank et al, and buy the Deluxe version of Quicken. Then you can just automatically download everything into the program (which is basically a more user-friendly version of a spreadsheet), and if you set it up right it will even then flow directly into TurboTax when it comes time to do taxes.
ReplyDeleteBack in the 1970's when I sold insurance, one of my customers was a young man named Scott Cook. He and his wife, a few years later, were struggling with their family finances, so Scott decided to write a program to keep track of them, and Quicken was born. It has come a long, long way since those humble beginnings, and now you can keep track of nearly every single financial event in your life this one very powerful tool. I've used the program since Version 1, and I highly recommend it.
They also have an online version, if you just want to try it out:
www.quicken.intuit.com
Hey Karen! You mean--enter stuff every day? As it happens? Ah.
ReplyDeleteDo you really do that?
Not on your life, Hank! I enter everything once a month, when I'm paying bills.
ReplyDeleteHowever, you can download most credit card statements directly into Quicken! And then give it whatever category you want, etc. You can also download your checking and savings accounts, and all your investment accounts. The only one I've never been able to manage this way was my Macy's Visa, which has never shown up on Quicken's list of companies that allow downloads.
The beauty part is that you can create a snapshot of your finances at any given moment, which can come in handy if you ever need to provide a financial statement. Which is the reason I started using Quicken in the first place. My husband was submitting applications for government jobs and they require statements of financial health in order for the application to be considered.
It's much easier to manage our financial life with all the electronic products we have available: Quicken, online bill pay, online financial statements, and tax software. Might as well use some of it.
Congratulations Susannah! Trust me, one day itemizing will make a huge deduction. As for me, I remember the year when my writing income FINALLY exceeded my deductions. Not so long ago, either.
ReplyDeleteOrganizing my big box of receipts has been on my list of things to do since April 15 2009. Maybe I'll do it tomorrow.
ReplyDeleteKaren,
ReplyDeleteYou are selling me on Quicken. Although I find myself dreading the revelation of what I actually spend my money on.
Congratulations, Susannah. Next year, you'll find those home owner deductions Very Interesting. :)
ReplyDeleteI'm a practitioner of The Big Box System of Tax Receipt organization, too.
I upgraded for 2010 to an open-top hanging file folder box where I've been slipping receipts into specific folders.
Jan, yes, I thin that's the scary part. When the actual totals are finished, I really, just--don't look at them.
ReplyDeleteI think denial is part of tax-doing.
Rhonda, hmm. I think a hanging file thing is a doable idea. I might contemplate that..although I must say Karen is winning me over.
Hank, I use a hanging file to gather everything together for my monthly bill organization. Anything that is due before the first of the month gets stood on end, sticking up above the top of the file, so I don't forget to pay it. Then after everything is paid it gets filed away in that year's various file folders: Business expenses, personal expenses, insurance, taxes, etc. At the end of the year every file folder is emptied, and bundled together in big manila envelopes, again by category, and filed with the taxes.
ReplyDeleteThis method has evolved over having a business of my own, and then doing all the bookkeeping and taxes for my husband's business, as well as the family taxes. I won't say it would work for everyone, but coupled with Quicken, it has worked for me. And when we were audited about 15 years ago the agent complimented my organization.
Taxes don't have to be stressful. And the secret to not paying so much is to keep every receipt and good records, so you can deduct those expenses from your income.
Can you tell I'm a numbers girl? :-) But as long as you keep good records, you really don't have to be good with numbers. Just enter the sums in the blanks, easy-peasy.
Dear Karen:
ReplyDeleteCan you come over?
xox
Hank,
ReplyDeleteOr you can just buy an accordian file, label the categories. At the end of the year, you put the accordian file in the basement NEXT to the pile of tax returns. Then you just buy a NEW accordian file for the new year.
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ReplyDeleteIt would be easier for me to LEARN TO PLAY the accordion!
ReplyDelete..I used to love Quicken. Maybe I should try it again. Just to be clear..I said I made a budget, I didn't say I stuck to it.
ReplyDeleteOh, HO, RO. :-) Now I get it...
ReplyDeleteSorry I'm so late chiming in on this, but I'm goofing off on a beach in Florida for a couple of days after Virginia Festival of the Book.
ReplyDeleteAnd Hank, you're wrong. You and I are in fact soul mates. I also leave my tax till the last minute, cannot use spread sheets, stuff things in paper bags and tip it all out on the coffee table at the beginning of April.
Every year I vow to be better. I did have to consult a tax guy last year but I incorporated his advice into my own crazy method. It winds up with all my travel expenses in one large envelope, car expenses in another, etc etc.
But I do use a computer to do the actual taxes these days so no worry about the math.
I figure it would take longer to explain my complicated lifestyle to a tax man than to do it myself.
Welcome back, Rhys! And I am so thrilled we are in this together!
ReplyDelete