At one time in my history, I used to love doing taxes! I would get a refund back, so I was happy to do my taxes very early. Not anymore, this year will be the first year in a long time that I’ll own taxes…
The Past
Believe it or not, I would sometimes actually start doing my taxes in December, 4+ months before they were due! I would plug in the income numbers that I thought I made and do everything else while I waited for the various tax forms.
Once I got all of the tax forms that I expected, I would do a software update (just to make sure it has any last-minute updates), and check over the amount expected. Back then, I would always get a tax refund which I loved!
Times Have Changed
This past year I bought and sold a lot of stocks that had appreciated nicely…. Too nicely! The combination of the realized capital gains on the selling of stocks, dividends from my dividend stocks, and the meager earnings from blogging means that I’m now going to owe taxes this year.
Why did I get a Tax Refund?
Back when I had more expenses, we would take zero allowances on our W2 forms. Then we would scrap by during the year, and get a decent refund back at the end of the year. Both my wife and I have some Accounting skills, so we know that on the surface it seemed like a dumb, wasteful move. Why wasteful, you might ask? Because by overpaying, the government gets free money that it (in theory) can earn interest on.
We didn’t care though, because, for us, we used it as a kind of forced savings account. Yes an odd, no-interest paid savings account, but it was better than spending it, like we probably would have done. Besides, once we got those refunds back, occasionally we would use the money as contributions to our Roth IRAs.
My Plan Going Forwards
Now that my stock transactions volume has increased and my taxes are becoming more complex, more than likely I’ll try Turbo Tax Deluxe before hiring an accountant. The software would be able to identify all of the 2011 Tax Changes and I can import my stock transactions from my stock broker’s website.
What do you do to keep your taxes under control?
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Thanks!
-MR
I hate doing taxes, and I’m a Financial Advisor!
I hate doing taxes now, but I use to love to get my refund back 🙂
Yea I run a business and there is no way that I can do all the taxes myself. It is just to much. I applaud you for trying to do it all yourself. Do you think you are saving money doing it yourself or do you think you will miss some things a CPA would find? It has always been a worry of mine.
I’ve been doing my own taxes since I was 16. It was much easier back then though.
This year is a little more complex than other years, but not by much. If I had real estate holdings, I think I would go to an accountant. But for my simplistic activities, I think I can do a decent enough job.
Same here! Now I have to deal with city taxes as well! Why can’t these schmucks get that from my state filing?
Yeah, Taxes are such a pain. Luckily, my wife has always done the city taxes (hurray)! I do federal and state returns…
I know funny huh, but she wanted to do them, and she’s an accountant, so I’m not going to question her!!!
I don’t know if I do anything to control my taxes. I do make an effort to keep my withholding in sync with what i am supposed to pay. My goal is to receive a small refund. It works most of the time!
This is a fluke year for me, next year I should be back in the black again on my returns…
MR, I am in the same situation as yourself except I contributed to my RRSP in order to neutralize my capital gains.
Going forward, I will contribute 50% of all gains from the market to my RRSP since I don’t have to worry about taxes anymore and Mr Market would be funding my retirement savings 🙂
I have a tax binder and a tax spreadsheet that I fill in every month. By the time taxes are due, I’m still bugged that they’re here, but at least I feel a little more in control. What I hate about taxes is the not knowing part. So, that’s the part I control.
Yeah, I have a folder with my investment transaction that I manually enter. what a pain! If I’m hoping the software package that I’m getting this year will import my stock transactions automagically 🙂
I have some fantastically complex taxes, but the HR Block Premium edition / TTax Deluxe does the job just fine actually.
You’ll be fine.
I like getting a refund. Bank interest rates are close to zero right now anyways, it’s not like I’m losing tons of money on interest.
I’m mostly done with mine. I almost forgot about one of my 1099’s. I think e W2’s are a bad idea.
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my taxes are quite complicated, with multiple LLCs, trusts, etc. TT deluxe or any comparable software is more than capable of handling it however. for me, working on my taxes is refreshing (as of late a detailed review). it shows me my progress as well as teaches me a few new things about my business and myself in the process. it helps to have a good group of CPA friends however to bounce ideas off of, or have them do it and you simply review it if you wish to go that route.