Wednesday, November 26, 2008

Thinking About Tax Time... Already

Catie commented in yesterday's post on being a landlord, "...I think when tax time comes along you will be happy to see a lot of your investment coming back to you!" I hope she is right! As I said to her, I almost don't dare think about it. I certainly don't want to plan on some kind of windfall in April, just to be disappointed. Best to just keep plugging ahead and let the tax refund fall where it may.

However, write-offs are something I need to keep in mind. I've been busy saving all my receipts and statements since I realized that I should, but it is a strange process for me. In the past I always aimed at getting $0 at tax time - I didn't want to pay anything, and I certainly didn't want Uncle Sam holding onto my money for a year when I could be getting interest on it instead. I've never understood using your tax refund for a savings account - that's what online accounts are for!

It was easy for me to estimate my taxes back in the old days when I was single, had one job and lived in an apartment. Before there was online tax preparation, I would pick an evening and sit down with a cup of tea, my pencils and calculator and do them myself. But by the time I met my ex I was working two jobs (one of them 1099 income) and shortly thereafter I bought the cottage. So, I was living in one county, working in two others and owned property in a third. It got confusing. I then hired the same accountant he used to do my taxes to save me the trouble. Once we were married, that same accountant did our taxes every year thereafter, which brings me to today...

I was divorced midyear, in the first part of June so now I have that plus two houses (one of them rental income) plus at least two jobs that will be sending me W4s, college tuition expenses and so on... There is just way more than I want to tackle. Today I called up the accountant my ex and I had used and asked them to put me on their list for sending out their year end packets. (They have a nice series of forms that you go through and fill out to help them see what has been happening over the last year.) I explained to their receptionist my situation and she said she would make notes in the computer. I figure it will be easier for everyone involved (especially me) if I use the same accountant as my ex. I know this accountant will have our past returns on file so will already have all the information on the rental property, and having both my ex's and my financial information should make it easier to handle the divorce situation. I've met with this accountant before and he and his staff are really great so even if it wasn't for the fact my taxes are going to be a confusing snarl this year, I would still use him.

The receptionist congratulated me on getting on top of this so early - they don't even send out their packets until after the first of the year (which makes sense, you never know what might happen in December.) All I am trying to do is get my ducks in a row so I will be ready next year, but it felt good to get that one item crossed off my list. The call took less than a minute, but already I feel better about it.

Photo by: *Karen

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