• Posts Tagged ‘taxes’

    Short Update on My IRS Situation and Other Miscellaney

    by  • October 26, 2012 • Tagged: ,  • Comments

    If you’ve been following us on Twitter (@lovenotdebt) you’d have known that I’ve been dealing with the IRS and their mistakes that I talked about in this post. I’m actually on hold with the IRS as I write this post, and I imagine that I look like this:

    grumpy cat

    I had fun once. It was awful.

    I’ll be posting soon about what’s happened since then, which includes a freakin’ levy that was placed on my checking account. One piece of advice if you’re contacted by the IRS: hire a pro. Seriously. I’m in way over my head and should have done that as soon as I received the first letter from the IRS. Also: the IRS is very, very incompetent.

    Coming Soon

    In the next few weeks we have a few Giveaways that we’ll be hosting. Next week we will again be partnering with SavingAdvice.com to give away $100 to start up (or supplement) an emergency fund. Near the end of November I’ll also be giving away a copy of Quicken 2013 Home and Business on CD. Stay tuned.

    Keep Up

    There’s a few ways to keep up with what’s going on at Make Love, Not Debt.

    • You can subscribe to our RSS feed if you’re into that. Subscribe now!
    • I’m fairly active on Twitter (follow us @lovenotdebt) where I tweet links to other posts on relationships and finances, along with other Twitter ramblings. Follow @lovenotdebt now!
    • We’re also fairly active on Facebook where you can join a community of other people who like our site. Visit and like us on Facebook now!

    Also, do please let us know how we’re doing via our contact form. We love hearing feedback from you and want to make sure that you’re seeing things you like.

    Have a great weekend!

    image: grumpycats.com

    No IRS, I Don’t Owe You $7,000

    by  • September 20, 2012 • Tagged: ,  • Comments

    taxes

    I filled it out correctly, I swear.

    To this day, I still love getting physical, tangible, U.S. Letter Carrier delivered mail. Of course, these days that is becoming increasingly scarce (Postal Service shutdowns notwithstanding) as most of my communications arrive via electronic mail.

    However, there’s one envelope with my name and address that I never like to receive: an IRS-sent letter. The IRS never sends anything pleasant like a thank you card for paying  taxes on time or a birth announcement from a random IRS agent. No, it’s always, “Hey you didn’t do something correctly and you should fix it before we send in men in black suits and sunglasses over to your place and garnish your cats for past due taxes.”

    As you can probably guess, I was the recipient of a mailing from the IRS. It came three days after I e-filed our taxes; I was initially surprised that they would respond so quickly, but then I realized that if they are owed money they really want to get it as fast as they can. I guess fortunately for me, the letter wasn’t in regard to the tax returns I has just submitted; it was in regard to a $7,000 bill that they think I owe.

    There wasn’t really anything that explained to me why I owed the IRS $7,000, just a very threatening letter stating that I should pay VERY SOON or have my wages and cat’s kibble garnished. Also included was a table stating the amount due, the amount owed, the interested owed (!), the date from which it was owed (September 2011), and a reference to IRS Form 941. Form 941 is used by business to report quarterly taxes for their employees. The problem? I have never had any employees, EVER, and certainly not in September 2011.

    I spent the next day at work on the phone with various IRS representatives (sidenote: if you ever have to call the IRS, have something else to do because you’ll be on hold for a LONG LONG time). The letter was sent by their ACS department –  Automated Collections System. Getting information from was difficult because none of the information matched up, and I’m not even sure they was supposed to divulge as much as they did. I found out that someone may have transposed numbers somewhere along the way; the EIN (a social security number for businesses) belonged to me, but all of the other information on the account pointed to a business in Buffalo, NY. I’ve never been to Buffalo, NY. I’m in Chicago.

    After I had the proper information, I wrote a letter and sent it via certified mail to the IRS contesting the whole thing. I was relieved to get letter in return from their investigation department stating that they received my letter and that they are investigating the matter.

    But a few weeks later I got another letter from the ACS department, this time telling me WITH GRAVE CONCERN that I need to pay the taxes NOW. Obviously none of the IRS departments talk to each other. I spent another few hours with IRS representatives making sure that they actually did receive the letter and they won’t take my cat’s kibble or my wages. Thankfully, I was given another 90-day “hold” from any more harassment from the ACS department. Hopefully the department investigating this whole thing will tell the ACS department to CHILL THE F**K OUT.

    Today is about halfway though my “hold” period and I still haven’t heard any decision from the IRS. I know that this is a HUGE misunderstanding and I hope that they realize it, too.

    Have you ever been the victim of other people’s mistakes? How did you fix it?

    image: kenteegardin

    TurboTax Giveaway Winners! Favorite Tweets!

    by  • March 23, 2012 • Tagged: , ,  • Comments

    A big hearty congrats to Michelle, Sarah, and Liz for winning our giveaway of free federal and state preparation and e-file with TurboTax Deluxe Online on our post about TurboTax for Mac review. They will all be expecting refunds so they might actually enjoy doing their taxes. Enjoy!

    To send you off this weekend, here’s some of my favorite tweets of the week. Remember that you can always follow me on twitter at @lovenotdebt. You really should. I’m funny.

    TurboTax for Mac Review

    by  • March 16, 2012 • Tagged: , ,  • Comments

    I’ve said a few times that I was going to get a tax professional to do our taxes this year. We picked a guy from friends’ recommendations, and he gave us a worksheet to fill out. I would have had to get all of my paperwork together in order to fill it out. By the time I had everything together and looked at the worksheet, I realized that I was probably 70% of the way done and I just needed to pop the numbers in. So instead, I bought TurboTax Home and Business for Mac. I’m running OS X Lion, 10.7.3, on my 13″ MacBook Pro (early 2011). Let me walk you through it.

    Installation

    Installation is a breeze, like most programs on a Mac. You download the disk image, mount it, and drag the application from the disk image to your applications folder. I probably spent more time writing that sentence than it took for me to install it. Really.

    Getting Started

    When you first open the application, you’re met with the splash screen with the terrible simile of “TurboTax Guides You Like A GPS”. TurboTax doesn’t coo sweet nothings of “insert this W-2 here”…whoa that’s dirty. Nor does it say in a nagging voice “RECALCULATING” every time I miss a step. Anyway, it’s a splash screen with common actions. Wee. Let’s move on.

    TurboTax 1

    I’m assuming that this is the first time you’ve used TurboTax for Mac – if you’ve used it in the past, it’ll detect old tax returns on your computer and offer to import them in for you. It’s nifty. Even if it isn’t your first time using TurboTax, you’ll be asked if anything major happened in your life that may affect you tax situation.

    Turbo Tax 2

    Depending on what you pick, you’ll be given some brief information on what each category entails. TurboTax will then guide you through each section, asking you to insert data from your tax forms where appropriate. You’ll insert information on W-2′s, 1099′s, and whatever other forms you have. This is where having all of your documents together will really save you time.

    TurboTax 3

    Income Summary

    If you think you’re a tax pro and don’t need TurboTax to hold your hand, you can cruise each section at your leisure. When you click “Start”, you’ll be asked to fill in the information appropriate to that section. I often have to do this because I’ll find a miscellaneous tax document somewhere around the house and will have to fill it in. The list is quite comprehensive; I haven’t used many of the categories since our tax situation is not that complicated.

    TurboTax 4

    Deductions and Credits

    After you fill out all of your tax information, you’ll go through and see if you qualify for any additional deductions or credits. Again, you have the option of going through the “GPS” and go though each topic one-by-one, or you can scoot on over to the topic listings and jump around like a pro. Our tax life is pretty simple because we’re renters, among other reasons, so we have always taken the standard deduction. New to us this year is the Child Tax Credit, which was great since it directly reduces the tax.

    TurboTax 5

    Miscellaneous

    Finally, you’ll wrap up your tax filing by taking care of any miscellaneous stuff like AMT. Again, we’ve never had to really fill out any of this section, but you’ll have to go item-by-item to see if you need to take care of any of these.

    TurboTax 6

    Everything Else

    I’ve intentionally left out the business section, but it’s pretty much along the same lines of the personal taxes section. One of the awesome things about the business section is that you can import your Schedule C directly from Quicken. It eliminates the need to enter everything in manually.

    When you’re finished with your federal taxes, TurboTax for Mac will see if there’s anything you missed and alert you to any items that may be incomplete or may be an audit risk. When you’re good to go, then you’ll be able to proceed with TurboTax’s blessing. I guess this is an area where TurboTax is like a GPS – it’ll nag you if something not right. That’s a good thing.

    State taxes are done in the same manner of federal taxes. It’ll be a little less time intensive and time consuming since you’ve already entered in all of your information. Of course, every state is different, so I can’t really go through what exactly to expect.

    As you go through and enter information, you’ll see a running tally of how much you will owe or how much you will be refunded. It’s kind of fun to put in ridiculous numbers to see how this changes. You can see that we’re in the red this year.

    TurboTax 7

    Lastly you’ll review both your federal and state taxes, and see your risk of audit. You’ll also review how you did this year versus last year, and be given the chance to learn about ways to improve your tax situation in the upcoming year.

    A new feature this year is having the chance to get free one-on-one tax advice from a tax professional. I’m about 90% finished with my taxes, but there’s some things that I want to make sure that I’m doing correctly, so I may use that service. I’ll update this post if I end up using it.

    Overall, I’ve been happy with my TurboTax for Mac experience. It’s perfect if your tax situation is relatively uncomplicated, not much has changed from year-to-year, or if you just like to do your own taxes. I used TurboTax in the early 2000′s to do my taxes, but I switched to other software because it was better to use with the personal finance program I was using then. Now that we’re Quicken users, it made sense to switch back to TurboTax so that I could import business stuff directly into it. While I switched for that reason, I’ve been very impressed with the ease of use, look and feel, and features that TurboTax offers.

    Smart Ways to Use That Tax Refund

    by  • February 16, 2012 • Tagged:   • Comments

    This is a guest post by Jim from Bargaineering. He keeps telling me to call him “Jimsane” or something like “Jimsanity”, but I told him that there’s another asian guy doing that already.

    Right around this time, half of you will have already filed your taxes and the other half are just about to file your taxes. For the ones who are done and are simply waiting for their refund check (or more likely, waiting for their refund direct deposit), you might be wondering what you should do with the money.

    Last year, the average tax refund was a little under three thousand dollars. No matter how you slice it, that’s a sizable windfall and it’s important that you take steps to do the right thing with it.

    Pay Down Debt

    If you have any high interest debt, consider using some of your tax refund towards paying down that debt. Debt can be a big weight on your finances, especially if it’s high interest credit card debt, so whenever you can lighten the load, do it. You don’t have to take your entire refund check and put it towards the debt, but take advantage of the windfall to give yourself a little more breathing room.

    Review Your Savings Goals

    If you are fortunate enough to not have any debt or you’ve put some of your refund towards it already, consider reviewing your other savings goals and giving them a boost. Are you planning on buying a new or used car soon? What about a home? How about college savings for the kiddos? Whatever the goal might be, carving off some of that tax refund and earmarking it towards a goal can give you a real boost. Maybe you’re close to hitting your savings target and an extra hundred or two gets it checked off? Or maybe you can get to the halfway mark – these psychological milestones are important because it gives you a psychological edge to keep saving.

    One crucial savings goal everyone should have is a well funded emergency fund. Emergency funds can help mitigate financial disasters, like unexpected medical bills or a car breakdown, and they are much better than relying on high interest credit cards.

    Increase Your 401(k) Contributions

    Divide the refund by 12 and give your 401(k) contribution a boost by that amount – replacing the income you are contributing with the refund check you just received. There are two reasons why this is great. First, you are saving more for your retirement which means you will have more in your nest egg when you do decide to call in quits. Second, since 401(k) contributions are tax deductible, it means that, all other things remaining the same, you will get an even larger tax refund next year, depending on your tax bracket, since your income will be lower.

    Donate to Charity

    If there are worthy organizations doing good charitable work, consider donating a bit of your windfall towards their efforts. If you do it now, you won’t be able to claim it as an itemized deduction until next year but the organization will be able to use it now, when donations are often at their lowest. If you do itemize, this also means a lower tax bill next year. I like to use Charity Navigator to research the effectiveness of charities.

    Take a Vacation

    Take a little bit of that refund and reward yourself. Being financially responsible all the time can be difficult so it’s healthy to do something fun for yourself. Take a vacation or buy yourself that fun gadget you’ve had your eye on. It’s like cheat days when you’re dieting, a little fun ensures you don’t fall off the wagon.

    So, what do you have planned for your tax refund?

    TurboTax Deluxe or Premier Giveaway

    by  • March 15, 2010 • Tagged: ,  • Comments

    tt_logo_177_216.gif

    Tax day is only a month away, and you haven’t done your taxes. Oh nos! What to do?

    Well, one thing you can do is enter to win TurboTax Deluxe or TurboTax Premier, both online editions. TurboTax has generously donated a keycode for each of their Online TurboTax Deluxe and Premier Editions that will allow you to file your federal taxes for free (you’ll still have to pay to file your state taxes). Here’s a handy-dandy comparison chart of the TurboTax products so that you can compare the similarities and differences between the Deluxe and Premier editions.

    To be entered for the giveaway, leave a comment stating which version of TurboTax you would like to win, either Deluxe or Premier. Easy, right?

    Entries will be accepted until Thursday, March 18, 9:00 PM CDT. I’ll close up the comments and choose a winner for each product by printing off the comments and tossing them into a hat and choosing a name.

    Good luck!

    A Look Back At 2008

    by  • January 9, 2009 • Tagged: , , , , ,  • Comments

    Whew, 2008 was quite a year. For us, it will forever be remembered as the year that we got married! But what else happened this year for us financially?

    Life
    To cut expenses, we cut Netflix out of our life. We also cut back on weekend trips. I was officially diagnosed with depression and learned some of socioeconomic aspects of dealing with it. After we were married, our first fight was about…money. It wasn’t as bad as the financial infidelity that Her’s brother went through.

    Budget
    After much trial and error, we finally made a budget that we stick to.

    Housing
    Our crazy but generous landlord increased our rent a whopping $8 per month.

    Saving
    We started a Big Dreams Savings Fund with the spoils of our wedding and related showers. We’ve decided that 2009 will be a balls-to-the-wall savings year.

    Debt
    The biggest news was the huge gift we received that wiped a good portion of the student loan debt. We even succeeded in not taking any more debt for the wedding and the honeymoon. As newlyweds, we’ve decided that tackling the student loans will be our first financial priority.

    Taxes
    This year taxes got crazy. I had a hard time dealing with them early in the year but somehow figured it out. But, at the end of this year I went back to a dumbfounded state about taxes. We didn’t know if we would have to pay taxes on the student loan gift payment, but it turns out that we didn’t have to.

    In 2008 we were light on the posts, especially the meaty financial ones. Our main focus was on the wedding and not much else. Since we now have a future together to plan for we have a lot of financial stuff to talk about in the upcoming months. Stay tuned!

    Taxes: I Just Can’t Get Them Right!

    by  • November 6, 2008 • Tagged: , , ,  • Comments

    Earlier this year I posted about our tax situation from 2007, and what we would be looking forward to in 2008. Since Her and I just got married, we needed to do the usual adjustments for our lives, including the exciting tax situation! Here’s what’s been going on.

    I grossly UNDERESTIMATED how much money Her and I would bring in from all income sources: Her’s job, my job, and blog income. When I ran the numbers last February I must have been under the influence of something really good because I was really optimistic about a refund. Plugging the numbers again reveals that we’re going to OWE ~$4,500!!!1!1!1!!

    After finding out how much we are going to owe, I went into super action mode to see what we could do to reduce our tax burden. They are as follows:

    • IRA – We’re at the point in our lives where we’re making too much money to take the deduction for contributing to a Traditional IRA. No luck there.
    • Adjust withholding – To cover our tax burden, we would have to increase our withholding by $450 per pay period. Since it is close to the holidays and we’ve already made travel plans, this doesn’t seem too feasible. Plus, what about the presents?!?
    • Spend money – A large part of our tax burden is due to the increase of blog income this year. We haven’t put too much money back into the business, but we could easily change that….
    • Increase 401(k)/SIMPLE IRA contribution – yeah we could do this as well, but we’d have to contribute $18,000 to erase the tax burden. Again, the travel, the presents, the humanity!
    • Open a SEP IRA and contribute to it – Again, we would have to contribute a LOT of money to substantially reduce our tax burden. The maximum amount that we’re allowed by law to contribute is not nearly what we’d need to offset our taxes.
    • Open a Solo 401(k) and contribute to it – Once again, we’re going to have to contribute MUCHO DINERO to lower our owed tax. The solo 401(k) has a substantially higher contribution limit which would allow us to put in what we would need to make a dent in the tax burden.
    • Gift tax – we’re going to see a tax guy to confirm whatever plan we have, and to PUT THIS TOPIC TO REST.

    So what action are we going to take? We’re going try and reduce our taxable business income. We’re going to open a solo 401(k) with Fidelity and will contribute a good amount of business cash there. We are also going to put some money into our business and expanding. The expenses incurred with that will further reduce our taxable business profit. After all this is said and done, we will owe ~$500.

    Looking ahead to 2009, we’re going to once again try and not owe or have a refund. We’re going to change our withholding to cover our expected 2009 salaries. For this, we’re going to assume that we have no other income. The taxes on our business income will be paid from those funds quarterly. We’ll contribute a small amount into the solo 401(k) to reduce our taxable income to be eligible to contribute to Roth IRAs, which we will max out.

    To make sure that our 2008 and 2009 plans were indeed feasible, we decided to see a tax guy. First things first: WE WILL NOT OWE ANYTHING FOR THE GENEROUS GIFT GIVEN TO US. Second, we had a good chat with our tax guy and he did confirm that our plan was sound and that we were taking advantage of all of the tax benefits available to us.

    Since we’ve returned from our honeymoon, I’ve spent many hours looking up tax topics and figuring everything out. I hope that the knowledge I gained will help us to make better tax decisions in the future.

    The Gift Tax, Student Loans, and How It STILL Doesn’t Apply to Us (or YAY for Unified Credit)

    by  • September 5, 2008 • Tagged: , ,  • Comments

    Eh, so in my last post I may have very liberally applied some IRS rules to our (well, the donor’s) situation.

    Let’s go over the exemptions of the gift tax again, shall we?

    • Gifts, excluding gifts of future interests, that are not more than the annual exclusion for the calendar year,
    • Tuition or medical expenses you pay directly to a medical or educational institution for someone,
    • Gifts to your spouse,
    • Gifts to a political organization for its use, and
    • Gifts to charities.

    See that part in bold? Yeah, I may have left that out of my last post. After some exhaustive googling, it seems that there is indeed a difference between paying a student loan to an institution who gave it out (eg, bank, Salle Mae) versus paying the tuition directly to an educational institution (eg, college, preschool).

    While reading more about this whole gift tax thing, I came across something called the Unified Credit. I had a little trouble wrapping my head around this, so I hope to be a little clearer than mud when explaining it to you.

    In 2008, an individual can gift up to $12,000 to any number of individuals without any tax implications – it doesn’t even have to be reported. Any amount over $12,000 given to anyone would have to be reported and is subject to the gift tax.

    Each individual is given a $345,800 “unified credit” on gift taxes throughout his lifetime (which equates to $1 million of gifts over the annual exclusions). When a person applies this credit to gift taxes, the amount is reduced for the lifetime of the individual. Thus, if a person is taxed $1,000 on a gift and applies the credit, that person would have $344,800 remaining to apply for his lifetime.

    The credit is called “unified” because any amount that is used to credit gift taxes is then subtracted from the credit given for estate taxes. If an individual dies in 2008, he gets a $780,800 credit on his estate tax (which equates to a $2 million estate). Using the example in the last paragraph, if he applied $1,000 of credits over his lifetime to cover his gift taxes, then he would be left with a $779,800 credit on his estate taxes.

    Since the credit is subtracted from lifetime use, a person can choose to not use the credit towards the gift tax and save it for his estate. That is pretty complicated stuff that I won’t go into any more detail.

    Whew. Still with me? So what does all this mean for us?

    Not a thing. We still are not responsible for any taxes as the recipients of this gift.

    Her’s relative who gave us this gift would be responsible for reporting the gift because it is over the $12,000 annual exclusion. Of that gift, $38,000 is subject to the gift tax. Her’s relative can apply whatever remaining unified credit to that tax and probably wipe it out completely, or can pay the gift tax if she is doing some advanced estate planning.

    Her’s relative is a smart enough woman to know what she was doing – I’m pretty sure that she thought this out or at least discussed this with a tax professional.

    So, will anyone owe taxes on this gift? Probably not.

    We are NOT tax professionals so please don’t take this as advice. Seriously, we’re just bloggers. See a tax professional for a definitive answer.

    The Gift Tax, Student Loans, and How It Doesn’t Apply to Us

    by  • September 3, 2008 • Tagged: ,  • Comments

    9/5/2008: Updated post is now up – The Gift Tax, Student Loans, and How It STILL Doesn’t Apply to Us (or YAY for Unified Credit)

    9/4/2008: This post has been edited for accuracy. Another post will be up shortly to clarify this one. I have struckout the inaccurate portions of this post, but will leave the whole thing up for posterity.

    A few weeks ago Her wrote about a generous relative who paid off $50,000 of Her’s student loans. Since then we’ve received a few comments about possible tax implications of such a large transfer of money. Admittedly, we didn’t think about it at the time, so we did some research.

    Of course the tax that would apply to our situation would be the Gift Tax. To understand the Gift Tax, I turned to the IRS’s FAQ on Gift Taxes.

    The IRS definition of a gift is

    Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.

    One can gift up to the annual exclusion ($12,000 in 2007) to another person without triggering the gift tax. Also, one can gift up to the annual exclusion to multiple people without triggering the gift tax. There’s a whole bunch of rules on exclusions that I’m not going to get into.

    What surprised me is that it is the donor who would normally have to pay the tax, but special arrangements could be made so that the donee could pay the tax.

    Of note of the Gift Tax are the exceptions, which are as follows:

    1. Gifts that are not more than the annual exclusion for the calendar year.
    2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
    3. Gifts to your spouse.
    4. Gifts to a political organization for its use.

    Since Her’s relative paid the student loan directly to the institution holding the loan, all of the money can be transferred tax-free. If Her’s relative cut us a check and then we paid the loan, Her’s relative would have to pay a tax on the very generous gift. It is very important to note the difference. Her’s relative doesn’t even have to report that any money was transferred.

    If someone is going to make a payment for your tuition / student loan that exceeds the annual exclusion, make sure it is paid directly to the loan institution so that no gift tax will be triggered!

    Originally, Her wanted the relative to cut us a check and then we would take care of it. We didn’t know about the tax implications at the time. It is a good thing that the relative just paid the loan company directly. Since she did that, no one has to report anything, and nothing will be taxed. Yay!

    I Forgot to Report Income to the IRS! What Now?

    by  • June 16, 2008 • Tagged:   • Comments

    A few days ago I received a scary looking letter from the IRS. It said that I had not reported some income, and I owe back taxes plus interest totaling over $600. I am every bit the law-abiding citizen, and I’m a goody-two-shoes to boot, so I was completely horrified! My head spun as I pictured myself being hauled off to prison, possibly even put to work on a chain gang! My first reaction was to throw the letter under the couch and pretend I never saw it, but reason prevailed.

    Him and I made our first ever visit to a tax professional this past weekend. I brought the letter plus all my tax paperwork (thank goodness I saved all that stuff). He quickly determined that yes, I had failed to report this income. It was a complete oversight. I think that what happened was that at the time I was preparing my taxes, I was not sure where to report the income, so I set it aside for later. Unfortunately I completely forgot about it and sent in the return without it. The good news is that our new tax guy feels that we can successfully argue that the IRS is classifying this forgotten income incorrectly, so we’ll owe about $200 less than the letter stated. He suggested we write a letter explaining our case and attach a check for the amount we believe I owe.

    I spent the past night writing that letter, and boy was that nerve-wracking. I feel like a criminal! Hopefully the IRS will accept my argument and the check and settle the matter quickly.

    Has anyone else ever forgotten to report any income? What did you do about it?

    Free TaxCut Online Premium + E-file!

    by  • March 21, 2008 • Tagged: ,  • Comments

    We’ve been talking about taxes a lot here at Make Love, Not Debt. Refunds, payments, sales tax, oh my!

    H&R Block has generously donated 2 keycodes for TaxCut Online Premium + E-file. With this, you’ll get what you need for FREE to figure out and file your FEDERAL income taxes. You’ll still need to pony up some cash for TaxCut state (and e-file should you choose to file that way for your state taxes).

    In order to win 1 of the 2 keys, leave a comment answering the following question:

    Do you expect to owe or get a refund?

    We’ll choose a two winners at random using the number generator from random.org.

    We’ll be closing the contest next Wednesday, March 26, at 9 pm CDT.

    Good luck!

    Chicago’s Sales Tax is Going to Get Ridiculous

    by  • March 19, 2008 • Tagged:   • Comments

    10.25%

    10.25%

    10.25%

    That’s the amount of sales tax that will be applied to purchases made in the city of Chicago in November.

    What’s that mean for us?

    Well, I’m definitely going to try to NOT make any large purchases in the city. For pretty much anything over $100, I’m going to turn to the stores on the intarweb for a more competitive price that includes FREE shipping and NO sales tax.

    I’ve stated in the past that I really like to patronize local small businesses, but seriously, the sales tax is re-donk. It’s a shame because it is not really the local business owners’ fault for this. They’re really going to get screwed.

    I guess it’s a good thing we’ve started to think about moving away from Chicago. That’s too bad: I really LOVE this city. Chicago has many cultural, academic, leisure, luxury, and business resources that will be hard to live without.

    But 10.25% sales tax on everything will not be missed.

    Miscellaneous Tax Stuff, Update

    by  • March 10, 2008 • Tagged:   • Comments

    At the beginning of February, I had a bunch of tax stuff on my mind. Here’s an update to all that madness.

    1. I went ahead and ran all the numbers for my taxes – and I still was slated to receive a $4,000+ tax refund. This is attributable to two things: I underestimated the amount of withholding taken from my bonuses, and I vastly overestimated the income we would receive from this blog. Whoops. The good news is that I filed in the middle of February and received my rebate a week and a half after that. Woo!

    2. Her ran the numbers for her taxes – and she’s going to owe. Everything is already in place, all she has to do is hit “submit”…on April 14.

    3. For this year, at least, we won’t need a tax guy. Luckily for us, Tax Act had some cool worksheets that helped us estimate what our tax burden will be for 2008, answering many of the questions that I had. They take into account the blog income, our change of marriage status, and projected income for 2008 to help us figure out if we need to make estimated payments, what our withholding should be, etc. Serendipitously enough, it seems that my $4,000+ overpayment this year will just about cover what we need to cover for next year; thus, it seems like we can just keep on keepin’ on. (Not surprisingly, the IRS w-2 calculator is still broken.)

    4. Bad news: our incomes will exceed that amount for us to take any student loan interest deductions in 2008.

    5. Good news: our incomes will exceed that amount for us to take any student loan interest deductions in 2008.

    6. Tax planning sucks, but sucks less when you have a good beer.

    How are your taxes going so far?

    Miscellaneous Tax Stuff

    by  • February 5, 2008 • Tagged: , ,  • Comments

    No cohesiveness in this post, just tax stuff that’s been on my mind…

    1. It’s the beginning of February, and all of our W-2′s, 1099′s, and other weirdly numbered tax documents are in. Right now they’re sitting in a pile with all of our other financial crap – I get the feeling that neither Her or I don’t really feel like dealing with it. In years past, we usually run to the computer and do a quick run of our numbers (this and last year using TaxAct) to see if we will owe or receive a refund. With all of the extra paperwork, we’re a less enthusiastic.

    2. While we are less enthusiastic, I ran the numbers for all of my paperwork only. It seems that when I filled out the w-2 calculator last year after I received a raise I may have goofed a little; preliminary calculations are projecting for me to receive about a $4,000 tax refund. Hey Uncle Sam, I’d like some interest on that! No?

    3. Speaking of the IRS w-2 calculator, it seems that it has been unavailable for a little while now. I’d like to adjust my withholding so that I don’t overpay my taxes. We also need to see if Her’s withholding is sufficient as well. Since we’ll be married this year, we have to figure out how that will affect our tax situation.

    4. We need a tax guy. While I’m fairly confident that I ran the numbers correctly, things are starting to get a little more complicated that I’m comfortable with. Revenue from this website has forced us to turn this into a business operation; therefore we’d like to get the eligible tax deductions. Also, as stated above, we’re getting married this year and will need to account for that in this year’s tax planning. I’ve asked around, and surprisingly enough one guy’s name did pop up more than once. I didn’t expect that since there’s a billion tax guys in the city.

    5. After we get married, our income will be too high to collect the full student loan interest deduction. Heck, we may even go over the income amount to collect any of the deduction. That means we have a bigger incentive to pay that sucker off more quickly.

    6. When the hell did tax planning becoming something I worried about? Must…continue…to…resist…getting…older…

    What’s been on your mind about taxes lately?

    Roundup, Booking Our Honeymoon Edition

    by  • January 24, 2008 • Tagged: , ,  • Comments

    I find it a little odd that there are people who don’t believe that credit card rewards can actually be redeemed. The first time I’ve run into that thinking is through a few comments on this blog. Well, Her and I can tell you that, YES, credit card rewards are redeemable, and we’re using them to greatly reduce the cost of our honeymoon. Still haven’t paid a cent of interest on credit cards in a while, and don’t plan to in the future, either.

    Here’s what I thought were good readings in the pfblogosphere this week:

    Over at Get Rich Slowly, JD gives some good advice on whether you should do your own taxes or hire an accountant. We’re probably going to see an accountant this year.

    Jim at Blueprint for Financial Prosperity explains the differences between life insurances: term, whole, universal and variable. Since we’ll be looking for a good plan this year, this is good information to consider.

    While I don’t agree with everything in this post in how to become and stay a millionaire by the Wastrel Show, it does give a very interesting aspect of wealth from a perspective that I haven’t been exposed to.

    Rocket Finances gives us a glimpse of how he does married finances. We do a his-hers-ours plan; we suggest you find the right solution for you.

    We’ve been following 2 Million’s review of Smart Couples Finish Rich. He has a great tip, “My wife and I would go to Starbucks and splurge on drinks or have some margaritas while we read it. Find what it takes to make this more enjoyable for your spouse.” I’m all for coupling an important, potientially drab activity such as talking about finances with something fun.

    Hey, did you know that Single Ma moved? Go check out her awesome new redesigned site, Fabulous Financials, right now!