Tuesday, January 29, 2008


I did our taxes this weekend. Some of you that know Jeromy know that he took a year of accounting classes. Those of you that know me know that I didn't. Two years of calculus and differential equations didn't leave me with very much applicable knowledge in the arena of finance. Jeromy took business calculus, so I guess there is probably a relationship, I just don't know what it is because I was applying the math to physics, not business. I am also pretty sure that you don't need calculus to do your taxes, otherwise most people wouldn't be doing their own returns. Needless to say, I don't know what a cost basis and other various financial terms I was asked to understand, mean. Why am I the one doing our taxes then you ask? Do we enjoy being audited? Not really, I just happen to be the paper organizer in the house. I file and keep all papers that enter the house from various avenues. I am pretty sure that if I were to ask Jeromy where Ellie's social security number was, he wouldn't really know that she even had one. This is by no fault of his own, it is just my "territory." Taxes require knowing where all of your papers for an entire year live. We sold a house this year, paid interest on student loans and mortgages (plural!), had a baby, a savings account, gave charitably, and had a ridiculous amount of medical bills. This is ALOT of paperwork!

That all being said, I was pretty sure that we were going to owe a significant amount of taxes this year from the sale of our house that we only lived in for one year. You have to live in it for two years or fit other criteria (that we don't) in order to get out of paying capital gains taxes. Wow, I learned something!

I used TurboTax online which I have used two previous years as well. It is a great handholding tool for someone like me that doesn't know much about this stuff. They even have an audit sniffer that tries to find reasons you might get one. My main problem was understanding what terms they used actually mean. They have a feature that tries to define them for you, but I had trouble even understanding the definitions. How smart am I?! What was even more frustrating is that there doesn't seem to be a standard lingo between financial institutions. TurboTax would ask me to enter information for something that our Title company called something else. Can't these people figure out a standardized system to make things easier on laymen? I have heard that our tax code (which like I said don't know anything about) is quite confusing and should be simplified, but I have only heard such things, I don't wish to get into an argument with any of you readers that know more about it than me :D

The "Hooray" part of this post is that when all was said and done, we didn't owe any money. We got money back!! That is a miracle to be sure. Just like all good Americans, I already spent the money on a new treadmill. I just think about it as stimulating the economy!

Happy Tuesday!


Matt Winckler said...

Bleh. Keeping all the paperwork and assembling receipts and whatnot? I just wait around until all my W-2s, 1099s, and other miscellaneous paperwork rolls in at the end of January and then file my return based on those. If the IRS ever decides to audit me and starts asking for receipts from the time I went out to dinner last June, I figure it's going to be a simple question of "All right, how much do I have to pay to take care of this?" And in this ill scenario, I pull out the checkbook and a pen...