Sunday, February 15, 2009

Why I Love My CPA

Once upon a time, I was very excited to get our W-2's in the mail because that meant I could sit down at my tiny, green octagonal kitchen table with my sharpened #2 pencil and a calculator and do my taxes on the 1040EZ form. After filling the initial one out in pencil, I would do it again to make sure I got the same numbers and then copy over my pencil markings in pen, the way I imagined the IRS people wanted it done. And then I would mail it off and wait for six weeks for a nice sized refund check to be mailed to me. That day was always like a second Christmas because that money was not earmarked for rent, utilities or gas. It was "free" money and I spent it with abandon; dinner out, new shoes, books, new shoes, makeup at the Clinique counter, new shoes.

But times changed. We bought a house, we had a child, we were adults. And I still did my taxes the same way, albeit at a newer white farmhouse table. We had way more W2's because we both had two jobs, and I couldn't use the EZ form anymore because we had mortgage interest (in the late 80's - yikes! I can't believe everyone told us what a great rate we were getting at 9.3%!), child care expenses, flexible spending plans, education credits. It was time consuming, but I did it! And when we got our refunds, we spent them on things like tuition, car repairs, house repairs, car repairs, child care, car repairs.

Every year it was the same except I started using my computer and a purchased tax program to figure everything out for me. And I didn't wait for a check anymore. They direct deposited into the account that I had specified. And I adjusted my withholdings so that we had our money ourselves all year long instead of getting a chunk back at the end of the year. Oh, except the last two years we owed because I changed employment and didn't withhold enough and Tim's mom died and left us some money which occurred in the 4Th quarter which the feds didn't like and penalized us for it. Yeah, other than that it was a piece of cake.

Until this year. This year I had to change my ways for my sanity. There were far to many things to take in to consideration like the loss of our child tax credit (why does the government think that kids need less support after they turn 16?) another distribution from my mother in law's estate, etc. and I was totally stressing out about it. So I hired a CPA. OMG! How come no one ever really told me how freeing it could be? I gave her all my neatly organized receipts and two days later she is calling saying that my return is done. Yes, we owe again. Who knew that you had to pay self-employment taxes if you did a couple of weeks work on the side and they sent a 1099? I mean, I paid my estimated income tax on it but there was that self employment tax snafu. And again, Jeanne's estate distributed the final payment to us on December 30th so we made a quick estimated payment on that but the federal government thinks we were hoarding the money and assessed a penalty. Again. But wait! Who is this knight in shining armour? Our friendly CPA argues that we didn't receive the money until the 4th quarter so there is no way we could have paid any earlier. And they waived the penalty!

Oh, and by the way? She looked at last year's return? And we way overpaid the state. Turns out that not all of the money we received from my mother in law's estate was taxable according to Colorado. So who owes who NOW, huh? Oh yeah! We are getting back all but $200 of what we had to pay in last year. Plus interest! Lynn, you totally rock. And this year, when we get our refund from the state, it will not be spent on dinners out, shoes, car repairs, child care or even books but will sit very happily in our savings account until I can choose the right fabric for my new slipcovers. Or until Amy's first tuition deposit is due. Whichever comes first.

The End.

2 comments:

Sarah @ Thrifty Decor Chick said...
This comment has been removed by the author.
KN said...

Great post. And a whoosh!