I Hate Taxes

I haven’t written in over a week because I have been gathering all of our tax information. I’ve also been procrastinating gathering all of our tax information. In celebration, I think this week will be Tax Week on the blog.

Max and I are both self-employed. In 2010, we asked a tax professional – not the one who actually does our taxes, because she only works half the year, but a trusted individual who teaches accounting – what we should do about our taxes. He said to save 30% of our income for taxes. OK. We then asked if building a home office would be tax deductible. He said yes. He had a home office – an add on – for many years. So, I did some basic math and decided that we could afford to add the home office by using our tax savings because the home office deduction would offset what we owed.

When we got our taxes done, we found out that a) we should have been paying taxes quarterly, and b) the home office wasn’t actually tax deductible. It’s tax deductible in the year that it is completed, but even then, it must be amortized over 40 years. If we had known that, we wouldn’t have built the office. We ended up with a five figure tax bill, just slightly larger than what we would have saved if we hadn’t built the office.

So, I’m dreading tax time this year. We can claim Cassie as a dependent (yay!) but can’t claim any of her adoption expenses until next year (boo!). We paid some of our quarterly taxes (yay!) but not all of them because we needed money for the adoption (boo money, yay adoption). I made far less money last year than I did in 2010 (yay?) but Max made far more money than he did in 2010 (yay?).

Last year, we owed more, percentage-wise, than Mitt Romney. That is unacceptable.

I would be far more accepting of taxes if I thought my taxes actually DID something. Like paid for my health care. Or ensured that my son’s school has the supplies it needs. Or got the idiots in Congress who are too busy fighting over birth control to go after the banks and pass some mortgage relief for the people who are trying to pay their mortgages. (Let the record show that I think birth control is a good idea, I just think mortgage relief is a better one at this particular moment.) Or really got the idiots in Congress to do anything except fight and be absurd.

I’ve said it before and I’ll say it again – times like these, I wish I lived in France.

2 thoughts on “I Hate Taxes

  1. Taxes are a pain for sure and definitely no fun at all to pay. However, I really recommend using the tax withholding calculator at irs.gov. It isn’t set up specifically for self-employed, but I am self-employed (my husband has a normal job) and I use it all the time to make sure I am on track with my taxes. Both our incomes vary throughout the year so I find it really helpful and it has been fairly accurate for us. It doesn’t do fica (which is stable anyhow so easy to calculate) or your state taxes, but for federal we have always been in good shape using it. I use it every time I get paid, but that’s because I am a little bit of a numbers nerd. I think it would be sufficient to use it quarterly when you make your payment if you don’t enjoy budgets and forecasting as much as I do.

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