I don't know about you...but getting my W-2 form each year seems to be one annual event that just hacks me off. That's because I know what's coming next.
Expecting a refund doesn't seem to eliminate the level of aggravation either. My latest little tax deduction has been on the books for three years, since she came kicking and screaming into the world in November 2007 (thank you IRS Exemption to Residency Test- Child Born During the Year rule). Despite being the apple of my eye, her addition really hasn't countered my misgivings of tax time.
As things go, 2007 was also a pretty unlucky year in the deduction category because a new home purchase tax credit didn't take place until 2008 (The Housing and Economic Stimulous Act of 2008). Of course all the expenses associated with said purchase are deductible (IRS Form 1098 reported on Form 1040 Schedule A). The 2009 version of the First Time Homebuyers Credit includes a provision that doesn't require payback of the credit like the 2008 version:
This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.
The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.
Pretty straightforward stuff (ahem)...but I wouldn't have qualified under the 2008 or 2009 credit back in 2007 anyway. Besides, I mortgaged enough money when I bought the house. I sure don't want to owe the IRS for a loan too (sorry first-time homebuyers class of '08 between April 9 and December 31).
I don't understand all the Earned Income Tax Credit, Child Tax Credit, Credit for Child and Dependent Care Expenses, Credit for Qualified Retirement Savings Contributions, Education Credits (Hope and Lifetime Learning Credits) or Credit for Qualified Retirement Savings Contributions. Each one has an IRS publication that explains it all in complete detail...if you speak the IRS language. I figure I can help stimulate the economy by pitching a few bucks H&R Blocks way. They don't seem to mind the shoebox method of accounting for receipts and claim they'll stand by any return they prepare...well...stand behind me that is.
I don't mind paying my fair share of taxes, but why is that fair share so darn hard to figure out? I just hate getting my W-2 form...