Monday, February 06, 2012

Moolah Monday - Tax Time

It is that time of year again. My husband always starts talking to mie about doing our taxes at the beginning of January and I am always able to hold him off until the beginning of February by reminding him that the various documents we will need aren't required to be mailed out until 1/31, which means they won't all be here until at least the first week of February, which means I can't do taxes until then.

I've always loved doing our taxes.  It's a brain puzzle for mie that frankly I enjoy.  Weird, I know.

Unfortunately, in the last couple years our tax situation has become much more complicated.  Our income has increased so that we're usually in the graduated percentage bracket for various deductions and credits.  We now own a rental property and that in itself comes with a whole balance sheet (of sorts) that I need to prepare. And, we're foster parents which also adds a bit of complexity to the situation.

By complexity I mean papers.  Lots and lots of papers.  Papers that are hard to keep track of - not during the year (there's a folder for that) but during the actual tax preparation period.  Receipts.  Lots and lots of receipts, both for the house and for foster parenting.  Receipts of all shapes and sizes, some of which are difficult to read because they have faded in the last year despite being in a file folder sealed from the elements, including heat.


I haven't started sorting through all that paper, but I know I need to start otherwise the hubby will start asking about it again.  Which has already happened.  To which I've already replied that he needs to bring mie all of his various receipts and such that he's placed in spots other than the designated folder o' organization.  He argues that his workshop is a perfectly acceptable spot for his workshop-y receipts (tools, materials, etc.) for the other house.  I tell him I agree, however that is not the spot I will be looking in when I start to do taxes - if it's not in my folder I will not be searching the house (or the workshop) to find it.

That will buy mie some more time.

I also will be given more time (but not a whole lot more) because I still have not received the social security numbers for my other two kiddos.  You know, the ones I had for more than 6 months last year but no longer have.  I seriously should have held them ransom until I got their social security numbers.  Well, not seriously because that would have been illegal but when they asked mie for their medical papers (shot records) I should have held those ransom.  Of course I wouldn't do that because even though their county apparently doesn't care about us and our needs I'm not going to be petty enough to put their medical needs ahead of my tax needs.

If you don't know what I'm talking about, let mie fill you in.  (So you know, I first typed FEEL you in...nice). Foster parents can claim foster children as dependents but only if the children were in the home for at least 6 months.  I guess by setting that limit it helps everyone know very clearly whether the child is your official dependent or not - the person who had the child the longest in the year wins and if you've had the child more than 6 months there is no way someone else had the child longer than you.  Of course it's not necessarily that cut and dry.  The bio parents could have had the children for the first 3 months, then they could have gone to another foster home for 4 months, then they could have gone to your home for 5 months and the year ends - who gets to claim them now?

I don't know the answer to that.  I would think the correct answer is no one, but that seems really sucky.  Either way it doesn't really matter - whoever claims the child FIRST is the one who wins in the eyes of the IRS whether or not they did so legally.  Let's say Summer's parents decide to claim her (because they have her old SSN and we haven't gone to get her a new one) and have already done their taxes because they have a less complicated situation and I'm sure qualify for some sort of indigent preparation, when we go to submit our taxes it will be rejected because they have already claimed that SSN (just another reason to get a new SSN after adoption).  We can complain to the IRS and they may or may not follow up with it, but more than likely they will tell us it is a civil matter just like in a divorced parents' custody dispute where the non-custodial parent claims the child.  We would have to get a lawyer and take them to court which in the end would find us winning, but it would be such a hassle.

This is why hubby is so keen on getting taxes filed.  That and wanting to see if we get a refund.

Unfortunately we can't claim them if we don't have the correct SSN.  Last year when #3 left I simply texted his mom and asked for it and she quickly and kindly obliged (for which I was shocked).  I tried that this year with #7 & #8 but that was unsuccessful.

Here's hoping some calls today will get it taken care of.  I have this idea that if I call the medicaid office they might give it to mie.  We'll see.  Wish mie luck!


MamaFoster said...

i was (maybe will) do a post on this...because we have never claimed a foster child on our taxes...ever.

We had our first child for 16 months in a row...never claimed her.

Our second one we didn't have for over 6 months in a row so we never claimed him (his adoptive family called to see if we had claimed him because SOMEONE HE NEVER LIVED WITH claimed him for a year that he only lived with ME and his adoptive mom and adoptive mom's taxes got rejected because of this.

Our third we have had for 20 months in a row...have never claimed her.

The last 4 we had for too short of times to claim them.

Our agency actually sends out a letter stating that they "don't think" you can write off a foster child "unless your situation allows" which I know is not true.

I think I am going to take a poll to see who claims and who doesn't claim their foster children...just to see. I bet I am one of the only ones who doesn't....and one of the only one's whose agency is retarded enough to send out paper work like that!!!

Mie said...

We claimed #3 and #4 last year because they both qualified with that whole 6 months thing. Thankfully we had no problems with it.

I'm curious - what has made you NOT claim them? Is it that you are opposed to it or there were challenges? I'm just curious.

Alison said...

I've been going back and forth about how I want to file because of this. The only thing we own are cars, so I've filed online for the past 3 years, but I was thinking we should go to an H&R block or something since we have foster-care on it this year. Is it very complicated? I really just need to sit and read, but I'm procrastinating!

My husband keeps asking me too! :)