Monday, March 05, 2012

Moolah Monday - Taxes Are Done (kind of...)

I had been postponing doing my taxes.  Partly out of fear of how much I'd owe.  Partly out of being overwhelmed.  Procrastination is best friends with fear and being overwhelmed - at least in my world.

I've seen what happens to people who procrastinate in doing their taxes.  It ain't pretty - so says a relative's 350K tax bill.  Yikes.

Plus I love my husband.

I took my taxes to Austin.

I didn't do my taxes in Austin.  At all.

I felt so relaxed and rejuvenated when I came home that I was super motivated to get them done that Friday night.  I'm not being sarcastic - I really was.  So, after the little kids went to bed I spread myself and my stuff out on the couch and began working through the numbers.

For your reference, I began using TurboTax last year and LOVE it.  Prior to that I'd always enjoyed using the little booklets and doing it all on paper.  I wish that was sarcasm but it's true.  Though professionally I tend to hang out in the "people" world, I can get my nerd on with spreadsheets and calculators just as easily.  (And sometimes it's nice to escape to the world of numbers...).  Good or bad our tax situation became much more complicated in 2010 because we moved forward into the world of real estate as a landlord and we began fostering and with all that I just wasn't confident in my ability to do things correctly.  So, I purchased TurboTax Home & Business and was happy with it in 2011.

Y'all - I'm really happy with it in 2012.

As it turns out I had nothing to worry about with our taxes.  If all goes smoothly we'll be getting A LOT back.  When I say A LOT, I mean about 6% of our combined income.  YIPPEE!

The extra amount on the return was largely driven by the additional $6K that we should get from claiming #7 & #8 - apparently it IS worth the effort to get those social security numbers.  The remainder is driven by deductions including mortgage interest deduction, real estate taxes, child-care deduction (Logan & Summer's school), and other charitable contributions (to our church & for foster care expenses on behalf of the state - only stuff not reimbursed by the state through our foster care payments).

Our return would have been double that with our rental property except apparently we're in the income bracket where you can't claim any loss on real estate.  That sucks.  It was so defeating when at first the number was really high (without entering in any of our other big deductions) and then when I entered in my income it quickly went down to 0.  : (

Another thing I learned by using Turbo Tax is that we CAN claim the adoption tax credit this year.  I didn't think we'd be able to because my work reimbursed our expenses, which they put in a special field on my W-2.  Apparently though if you claim the reimbursement amount as income (as it was in my case, who knew!) then you CAN claim the adoption tax credit.  Another $1800 - woot!

With TurboTax you can also purchase a service where if you get audited they help take care of it.  I invested in that.  Not sure if I'll need it but Just.In.Case.

So now we wait.  Unfortunately we had to mail in the tax return because of the adoption tax credit.  You have to send in the adoption decree WITH the county seal and you can't do that by scanning it in and emailing it.  I took it into the post office last Tuesday and mailed it off.

Unfortunately this means that the process this year will be longer than it needs to be.  The letter I have about the tax credit says that it usually takes at least 8 weeks to get a refund this way, if not 3 months.  I suppose I'm ok with waiting, it's not like I have a choice, but the challenge is that unlike last year when I submitted electronically, this year I won't know immediately if #7 & #8 have already been claimed by their parents.  If I'd submitted electronically I would have gotten an (almost) immediate response telling me my submission didn't go through because they'd already been claimed.  Now I have to wait for that all to be done through snail mail.  It could be weeks before I find out that they were claimed (let's hope not) and then at that point we'll get to start the process of fighting the IRS to accept us as the rightful claimants instead of the birth parents.

Who knows how long this will drag out.  I'll keep you posted.

In other news - if you're interested in learning more about the tax credit, there is a webinar coming up soon.  Find more information here.


Kylee said...

Mie, I think we live close to each other...not sure though! Anyway, my parents are both CPA's, so I seem to hear tax talk all the time. Congratulations on (almost) having yours done : ) Woohoo!

Mie said...

Really? I hadn't put that together! I'm in the DFW area - I always assumed you were in the midwest somewhere. Don't know why...

Kylee said...

I'm in the DFW area, as well...but go to school out west! : )