Tax Time Approaches!

[GenerationX]

X, go to www.fairtax.org I think you'll like some of the ideas there.

Thanks, art! Yes, this is exactly what we need.

 

[artvandelay]

Thanks, art! Yes, this is exactly what we need.

No problem. Who knows, maybe our generation (X) will be the ones to get it passed?

 

[Woody13]

I have a tax preparation and filing timetable that I'm using this year;

April 17....file tax return

April 18....plead guilty....:lol:

 

[TAC]

The political party that is in office when mortgage interest no longer becomes a deduction for 10's of MILLIONS of homeowners, will never be elected for the next 50 years.

Do you realize how much the elimination of that deduction will have a rippling effect on the economy?

For all taxpayers, I have three words that are going to scare you in the coming years...

Alternnative Minimum Tax

The AMT was first enacted to make sure wealthy people paid taxes. In some cases, wealthy people would have a lot of deductions that would cause them not to pay any federal tax (eg. large charitable donations, a lot of mortgage interest). The AMT would then kick in to make sure they paid something to the Federal govt. Sounds good and just, right? Unfortunately, Congress never tied it to rise with inflation, and now it's starting to affect people in the higher middle class. Within 10 years, studies have shown that the AMT will bring in more income than the income tax will. Pres. Bush's independent commision on tax reform concluded that to get rid of the AMT, ALL DEDUCTIONS WILL BE PHASED OUT!!!

If you haven't paid it yet, it could be just a matter of time.

Here's a link to Turbo Tax's site with info
http://www.turbotax.com/articles/FAQontheAlternativeMinimumTax.html

 

[The Mom]

The political party that is in office when mortgage interest no longer becomes a deduction for 10's of MILLIONS of homeowners, will never be elected for the next 50 years.

Do you realize how much the elimination of that deduction will have a rippling effect on the economy?

But if everyone were being taxed at the same, but lower, rate, that deduction wouldn't be needed.

For instance, if deducting your mortage lowers your tax rate by, say, 2%, wouldn't you be in the same position if EVERYONE'S tax rate was lowered 2%? And right now, you're probably in a position where you owe a lot of mortgage interest, and it makes a big difference at tax time. In 20 years, that may not be the case.

 

[artvandelay]

The political party that is in office when mortgage interest no longer becomes a deduction for 10's of MILLIONS of homeowners, will never be elected for the next 50 years.

Do you realize how much the elimination of that deduction will have a rippling effect on the economy?

Yes, I do. That's why tax reform is something that probably won't happen until we're on the brink. Social Security reform is the same way. Most politicians know Social Security has got big problems in the future, but they're not going to fix it if it can cost them an election next year. Louis XV said it best, "Apres nous, le deluge."

 

[Woody13]

Tax Time Has Come and Gone

Here is an interesting observation about the IRS. Both my son and daughter were due refunds this year, so I filed their taxes electronically via the Internet and directed the IRS to make a direct deposit in their respective bank accounts. I filed their returns on April 4, 2006. They have not yet gotten their refunds.

I owed the IRS money ($942.00) so I filled out the 1040 and mailed it in with my personal check on April 12, 2006. My check cleared the bank on April 17! Obviously, if you owe the IRS money, they want to collect it fast as they can. If the IRS owes you a refund, they'll take their own sweet time in giving you your own money back! :wave:

 

[Nemo14]

Here is an interesting observation about the IRS. Both my son and daughter were due refunds this year, so I filed their taxes electronically via the Internet and directed the IRS to make a direct deposit in their respective bank accounts. I filed their returns on April 4, 2006. They have not yet gotten their refunds.

I owed the IRS money ($942.00) so I filled out the 1040 and mailed it in with my personal check on April 12, 2006. My check cleared the bank on April 17! Obviously, if you owe the IRS money, they want to collect it fast as they can. If the IRS owes you a refund, they'll take their own sweet time in giving you your own money back! :wave:

...and this surprises you?:

 

[Master Yoda]

So, how did you all make out with your taxes this year? :wave:

Not to well. I ended up owing $2127 this year.

 

[Woody13]

Not to well. I ended up owing $2127 this year.

Rats! I don't like to owe more than $1,000.00 because I don't want to pay a penalty and I don't want to file quarterly either. :wave:

 

[Master Yoda]

Rats! I don't like to owe more than $1,000.00 because I don't want to pay a penalty and I don't want to file quarterly either. :wave:

Fortunately we did not get stuck with a penalty. This was the first year I have owed in 21 years of filing. That number was quite a shock to us as well. We were expecting to owe around a grand due to a mistake my wife made with her deductions but double that was a real shock to the system. Add that to $1000 of car repairs and my savings account is as dry as a bone.

 

[maelstrom]

I don't get any money back because my job doesn't take out whatever it is that you end up getting back. I really have no idea how taxes work at all. But I know at my other jobs, years ago, I got back some piddly amount ($11?).

 

[Woody13]

Fortunately we did not get stuck with a penalty. This was the first year I have owed in 21 years of filing. That number was quite a shock to us as well. We were expecting to owe around a grand due to a mistake my wife made with her deductions but double that was a real shock to the system. Add that to $1000 of car repairs and my savings account is as dry as a bone.

That's good that you didn't get hit with a penalty. However, don't be surprised if the IRS sends you a bill for an estimated tax penalty for not paying enough during the year. After all, someone has to pay off the public debt! :wave:

I've paid taxes for over 40 years. In the early days, I got big refunds and then it dawned on me, "Why am I giving this money to the government interest free?" I haven't had a tax refund in over 30 years!