One of the things that my wife and I did a few years ago that has almost certainly saved our marriage was to get someone else to process our taxes. In the the first few years, we calculated them ourselves and it took FOR-EV-ER. Well at least in my mind. It made me cranky, and my crankiness made HER cranky.
In the years prior to us filing jointly, I had always filed a 1040-A or even a 1040-EZ. No muss, no fuss. There was also no calculating of itemized deduction. Compare this with calculating not only all of our charitable contributions but also using Schedule C to keep track of all of the expenses of the rental units in the two-family dwelling we lived in, and did NOT live in the next few years. My wife figured out most of this latter info, but still, it was torturous.
Worse, almost every year, we made some math error on our state and/or federal taxes and have to do an amended return, generally not in our favor.
Now, you might observe, “Hey, you could have gotten a tax reduction all those years you didn’t itemize from all your contribution to your church and other organizations.” This is no doubt true. Yet, it wasn’t the reason I MADE the donations, so I did not care as much; still don’t, actually. There’s a friend of a friend who does some very good work for the poor and disenfranchised, and his organization deliberately is NOT eligible for a tax deduction. His philosophy is, and I tend to agree with it, that if you want to contribute, you should be doing it from the heart, not just for the write-off.
In the last few years, we have had an accountant do our taxes. We still have to gather the information, but it’s a lot less onerous. Even since we sold the rental property, interestingly corresponding to the arrival of The Daughter, it’s still worthwhile.
So, it was a bit of a shock to the system to get a letter from the IRS last month saying we owe $749 for the 2008 tax year. Seems that the IRS saw the line on The Wife’s W-2 and thought there was $5000 being contributed by her employer for child care. In fact, the $5000 was HER contribution to child care on a flex spending account. However, the accountant did make ANOTHER mistake, so we DO owe some money. But the accountants are paying the penalty and interest. At the end of the day, we’ll have our 2009 return pay for what we owe in 2008.
Still, all of this was MUCH less stressful for me than the DYI model.