Thursday, April 12, 2012

April: Tax Time

"Tax Time,"  those two words bring on a myriad of emotions from U.S. citizens across the country. There are those American who eagerly await their W-2 forms to file their taxes in hope of getting a refund to augment their family's annual income, plan a family vacation, or just pay off a few bills. There are those who make an early appointment with their Certified Public Accountant (CPA) because he or she gets booked up quickly and they don't want to have to file for an extension. Many Americans go to walk-in tax preparers with the hope that they have brought all their paper work and that they can get their taxes done.

Then there is a group of us that use a computer software to do our own taxes.  It is not that we don't trust the calculator, CPA, or the "walk-in" tax preparers. We happen to enjoy the thrill of watching the tax obligation go down as we go through the process of entering information. It is pretty cut and dry, if you are doing a straight 1040EZ.  If you are doing deductions, it is a lesson in the intricacies of the tax codes that have been changed and massaged by Congress. 

You heard how the "Affordable Healthcare Act" has helped Americans in 2011. When you use a computer software program and do you own taxes, you actually see how it does in the "medical deduction section." You heard of the "American Government Educational Credit Act," you see it working on your tax form as you enter your child's college tuition.  There is the "Earned Income Credit" and how to file your "Gambling Winnings." It is a variable encyclopedia of tax information and a reflection of what our legislatures have been doing in Congress.

Check out the "Capital Gains" and "Inheritance Gifts." Did you know that "COBRA Premium Assistance" is considered taxable income? Now that is really going to help with the deficit (this is a sarcastic remark). Educational savings accounts like Coverdells and 529 are considered income, now think about that! You paid your taxes on these savings. Saved your money gave it to a child, relative, or even yourself in some cases. Now you have to count that savings as income! But remember, we are giving tax breaks to the oil companies. Subsidies and incentives are given daily by state municipalities to entice business to locate in the name of  "business development and jobs."

So, if you have the time and patience and really want the skinny of who is paying what:
      • Get yourself a tax preparation software 
      • Take your time going through the software steps
      • Look at every available deduction 
      • Click on those blue underlined words
      • Garner the information
      • Use it to challenge your representatives in your State and Federal delegation
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