I pulled the supporting data together yesterday and cranked through turbo tax today. I hate, hate hate doing taxes. I spend my working days in a finance job where dollars are reported in either millions or billions; doing anything finance-related on the weekend is a killer. Especially when I’m not dealing with millions.
We lost #1D as an exemption this year. The direct debit was more than I expected.
On the plus side, we work for a government contractor, so dollars in ultimately mean dollars out to us in pay and benefits.
The wine I’m drinking is called Blood Red Barbera. Very apropo for tax prep day.
“The wine I’m drinking is called Blood Red Barbera. Very apropo for tax prep day.”
That sounds really tasty! And so appropriate.
I spent the entire weekend except meals, two hours at the gym and Game of Thrones on taxes. Oh and we did the NYT Crossword puzzles. We have to pay a $7 fine because we underestimated our estimated payments. (I was pretty sure we had, but last year I mucked up the January numbers and way overpaid and had to wait forever for a refund.)
Vent for DS2, he tried to do the taxes this weekend but Tufts has his W2 form hostage while they do schedule website maintenance. Really? This weekend? (And has he says, “And this is why I hate Tufts.”)
As a member of another family that has to pay AMT, I understand deega123’s point of view. Our mortgage is deductible for AMT, and our charitable contributions are also deductible, but our state income and property taxes are not deductible, and that triggers the AMT.
The practical consideration–that if one paid less in state tax, one would pay more in the regular income tax, and hence one would pay less AMT–is true, of course. However, I don’t see why the state taxes should not be deductible for AMT, as well as for the regular income tax.
People in states with higher real estate prices and lower property taxes are at an advantage in this regard. Generally, the situation we have is the price that we pay for living in an area with low population density–at least, that’s how I console myself.
Tax forms drive me crazy. Schedule C for wedding and funeral honoraria, which, if I donate back to the church, are deducted from income on Schedule A. Schedule SE because the IRS considers pastors self-employed for social security purposes - if the church chooses to give me what would be the employer’s share of social security taxes, then that money is reported on the W-2; then half the amount of the SE taxes get deducted on the 1099. And around and around in circles we go.
In an expensive international city, say HK or Singapore, to use a recent thread, expat benefits such as kid’s education, housing subsidies, home leave transport subsidies I’d guess would push “income” very high, if all that is taxed?
I get the satisfaction of figuring out the tax puzzle. But it is maddening, regardless, and would rather clean out closets or flower beds.
Chocolate of choice today, Lake Champlain.
KKmama, sigh.
I count my blessings that WA does not have a state tax, and I don’t have to fill out another pile of forms. One more reason to stay put!
Moved from state 1 to state 2. H made ALL his money in state 2 last year and still, we owe thousands to state 1! We’ll get it back from state 2 and the feds but I feel like this is state 1’s crappy little goodbye present. Next year, I’m going to send in a form to state 1 and write on it “hahahaha, we moved and will never pay taxes to this state again. Whoo hoooooo!”
Moved from State 1 to State 2 last year. All my income was in State 1. Did my employer manage to withhold enough to cover the tax on my income (which except for about $100 in interest was the only income attributable to State 1)? Noooooooo! I did a best-guess for what is due and mailed that check in with my application for the extension.
All of Happydad’s income is attributable to State 2 (along with about $150 in interest), and it looks like we will get something back from State 2. But that is probably mostly due to the fact that the moving expenses are all attributable to State 2.
Next year, there will be only ONE state to deal with. I am counting down the days.
Oh, and Happykid doesn’t know this yet, but she is going to re-do all of her W-4s with those seven different employers so that they withhold the maximum. Otherwise all that Schedule C income of hers will push her into estimated tax territory in 2015. Fie on estimated taxes!
@3bm103,
Unless Deloitte has been royally screwing up on my US and int’l tax returns for the last 10+ years, I have indeed been paying substantial income tax to both the USA and to the host countries. I get an acknowledgement of what I pay to host country X, and I write a personal check to the IRS nearly every year to settle the shortfall in US withholding. And I pay FICA and Medicare taxes on the foreign earned income.
I pay state income taxes on interest income from my US bank & securities accounts. And I pay local property taxes on my home in the US that I haven’t lived in for over a decade.
Every June (Americans residing overseas get an extra month to file their tax return), I feel like I’m being held by the ankles and shaken down.
I never hated doing taxes, I hated doing FA forms- frankly, when I did the very last one, that’s when I did the jig.
@BunsenBurner, your note got me thinking, I went back and looked at a few things and neither X nor Y is likely to net me the refund I hoped for. Now, it’s just a matter of finding the right way to file this unusual situation so that, if flagged, we have an acceptable defense position. It now makes sense why the super-CPA has consulted a super-duper CPA/tax specialist: it’s all CYA.
The tax situation for US citizens abroad can vary quite a bit from one country to another because of the state of the tax treaties between the US and the various other countries. So GMTplus7 may very well be being held by the ankles and shaken down, while others don’t feel any pain at all.
Every expat I know who’s based in Asia pays less taxes(even after 2 countries’ taxes) than if they were living in the US with the same income.
Their first $100K is tax exempt and their paid foreign taxes are credited against their US taxes. If they don’t derive any benefits, they wouldn’t go overseas.
Employment is a useful benefit.
Deloitte is probably doing your taxes because you’re being tax equalized. We not only lived overseas for over 10 years and I know what I’m talking about, but I am an accountant and prepare taxes for both U.S. citizens living overseas and for Non resident aliens working here. The Europeans who manage to spend 183 days here are thrilled that they can now be considered residents for tax purposes because they pay way less tax than they used to.
Maybe you should try doing your taxes and pretending you didn’t work overseas to see what you’d owe the IRS without the exemption and the Foreign Tax Credit. Lots of people have a shortfall in withholding. Doesn’t mean they are paying extra. Just means they didn’t have enough withheld.
I’m certainly not saying that the high income tax payers in the U.S. don’t feel a lot of pain at tax time or that the system is in any way fair to everybody. But it’s much, much better than in a lot of countries. And yes, it is absolutely true that if you make less than $100,000 and live in Saudi Arabia you would pay no income tax to any country. We did it for four years. Why do you think people do it? And if you make over that you only pay on the amount over.
Okay. We get it that you don’t see the US’s insistence on worldwide taxation, which is against the run of play for most developed economies, as a problem. But what is your professional opinion of FATCA?
DS did his taxes this weekend. He works part time and goes to school. He earned about 7K and owes more than was withheld. He pointed out that if he had fathered a baby this year he would be getting back 14K. I assured him he was making good choices anyway.
Ugh. Me too.
You may or may not have read my other thread about my lovely identity theft issue this year; someone was gracious enough to file my state and federal tax returns on my behalf before I had a chance. So I spent February and March sorting THAT out. After I did my “real” taxes I secretly wished that I could have just let the fraudulent return stand…sigh…it made me laugh that I had to prove my identity to the IRS (by filling out extra forms and attaching copies of our passports) so that they’d KNOW it was me sending in that enormous check. The IRS was clear in saying that if I was getting a refund, it would be delayed for “several months”…they were very prompt in cashing my check though… 
My personal gripe (along with AMT) is the fact that we elect the the lowest withholding amounts possible (without having extra dollars withheld) and STILL owe a chunk of change. And next year when we lose S as an exemption I’m sure that we’d get penalized for not withholding enough. So now I guess I’ll go have an extra amount withheld from our cheks…sheesh
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do not care what your federal tax rate is. You receive more in benefits than you pay for"
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BS
I am a tax payer, I am not a tax receiver. Half the country pays no federal taxes. They’re the ones that are receiving benefits that they’re not paying for.
Hopefully, Im allowed to vent about this!?! I dont mind paying taxes, but I wish we could take advantage of the Roth or the college credits. I feel blessed we have our income, and if we had this income since we were in our twenties, or even our thirties, it would be different. However, we struggled mightily during our 20’s, got married young, had kids young and had a lot of student debt. We didnt really make any decent money until our 40s, right when the kiddos start going to college. I get there should be cutoffs, but I would love for the tax code to change so that you could put money in a roth if you earned up to 250-300k. The 180k cutoff, doesnt help especially when you have kids in college.
Also my son is graduating from college next month, so I guess my 2015 tax return will be the last year I can claim him. Of course if he gets a job in June, that may be up for discussion if I can claim him next year.