Dear IRS, Where is my Windfall??
February 6th, 2008 by ariana
One of the reasons things have been a little slow over here at becoming-home is that every time Jeff asks me when we are going to complete project X Y or Z my response for the last 4 months has been “when we get our tax return honey.”
Yes, I have been living under the misguided illusion that being a home owner meant we’d be receiving jackpot like sums from the federal government that would enable us to finish our kitchen backsplash, decorate the nursery, pay the $1400 daycare bill.. (ok, maybe not).
But seriously, isn’t that what we’ve always been told?
“Its ok that your mortgage payment is 3 times what you’ve ever paid in rent because you will save SO much money in taxes!” etc. etc. etc.
So you could say I was a little bit shocked and a lot depressed when our total tax return for this year came to……ready?? Wait for it..
$940.
??????????????????
Granted, anticipating the fictitious windfall Jeff had taken 2 deductions on his W-4 instead of the normal zero, but I hadn’t taken any. It’s mind boggling. You might suspect (and you might be correct) that I made some errors or missed some things that an accountant would catch. I thought of that too and a) I did the taxes myself on taxact.com because if we’re getting back less than $1000 damned if I’m paying a large percentage of that to an accountant and b) I did miss something, which brings us to the education portion of this post…
The something that I almost missed was the amount of prepaid property taxes we paid at closing (or pro-rata taxes as I believe they are called in IRS-speak) It was only someone else’s post on a message board that alerted me to the fact that all my real estate taxes were NOT on the year end statement provided by our mortgage lender (we escrow) but that I need to go back and look at our HUD statement and see what those were.
I hope I can find that HUD statement and I also hope that fattens up our anemic return.
So that you don’t make any of the same mistakes I did, I thought I’d point you to one of the better web pages I found on taxes and first time home buyers.
Good luck, and may the gods of the IRS bless you more than they blessed us!
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Mike Harmon
I always claimed 0 on my W-4’s even though I could claim myself and my child, plus, I added an additional $25/paycheck to go into that pot to guarantee there’ll be big bucks in February. Owning a house helps. My returns usually got me around 3K each spring. I am no longer working (going to school instead) and I miss the lump at the beginning of the year. My sister always owes about 2k so I think $940 is pretty good :)
Also, it didn’t cost us that much to hire a CPA to do the taxes. My husband and I did so for several years and I think it ran between $75-125 (about eight years ago to a certified public accountant). We never had to pay a % of anything. It was a flat fee.
Yes, well $940 compared to owing 2k is pretty good you’re right :)
Hmmm, $150 doesn’t seem like much, I wonder if the prices are the same around here (everything seems to be more expensive in NY!)? It is probably something I should look into.. I would just hate it if we paid someone and got the same amount of money anyway!
Ha- I lust after your $1K return. I have to write the gov’t a check! Yes, it would have been a bigger check if we didn’t have deductions but no less irritating, I assure you.
Mrs. Limestone, now I just feel greedy :)
That’s my wife for you. Most people would be happy that they’re getting close to $1k back.. not Ari.
See, the thing you need to understand about her is that it really has nothing to do with the money itself. She isn’t greedy by nature. She has almost no understanding of the value of a dollar. The real issue is that her master plan has been disrupted… I have been hearing about all the big plans for the thousands upon thousands of dollars we were supposed to be getting back for months now. You see in Ari’s head this “free money” the gov so generously gives you each year was already spent. Now in order to buy these things (that she already owns in her mind) we’d have to get them the old fashion way.. saving for them.. THE HUMANITY!
Thanks for the support babe, and for airing our dirty laundry ;)
I’m so glad I found this post. We bought our first home this year AND had a baby. We’re getting back much less than we thought we would. Luckily we haven’t filed our taxes yet, so hopefully the website you referred will help!
Thanks!
Jeff, I have to side with Ariana on this – it is patently unfair that the government won’t pay to redo my bathroom.
Sigh! We noticed that we don’t make or spend enough money to claim more than a standard deduction anyway… so our homeownr’s cost of interest/taxes/etc have never lowered our taxes.
We are hoping to break even this year… we’ve been up and down the past… hoping we have it figured out!
Oh, and you should have a “tax deduction” coming for next year… babies really ARE responsible for a lot of them!
Count your lucky stars. $900 sounds like a huge windfall to me. I pay soooooo very much taxes being single you just wouldn’t believe it. It’s so much that I try to never look at my gross salary. Honestly, more than one month a year goes completely to Uncle Sam AND I don’t have health insurance. AND I have to pay. $110.00. Man.
Oh well, I guess you learn a new thing every day. $940 isn’t that bad… it could be worse, you could have received nothing…
I love your site! I just found this through another blog & I think I spent a whole day just reading it. Your style & sense of humor are awesome! Thank you for the great tips. :)
I had a question, I recently purchased the same mirror you have from Jedmart.com, (the white shabby wood mirror) & I have not received it yet. How long did it take for you to receive yours? I ordered mine two weeks ago & I did not know if it should take a long time or not. Any info would be great! Thank you Ariana & keep up the great blog!
If you can’t find your HUD call your Realtor, they might have a copy or the title company (we use title companies where I live, not sure about your area) where you closed and they can get you one pretty quickly.
Re: your HUD statement…If you closed @ a title co they should have a copy of it, as should your Realtor. You should also have one in your pkg of closing papers. Hope that helps. Also, did you file your $2000k “head of household”
@Heather, I hope it does help, let me know!
@IO, THANK YOU!!! ;)
@Jennifer, I’m looking forward to the arrival of our little tax deduction in August :)
@Peggy, I thought it was married people who get penalized with the so called “marriage tax”?
@Danielle, thanks for the kind words! I don’t think it took 2 weeks, more like 5 days? It could depend though on where you are in relation to Jedmart.
@Everyone else, I found my HUD statement!!!! Thanks for the suggestions though in case I hadn’t :)
[…] as an update to my last post, with the addition of the deduction of the real estate taxes paid at closing our combined total […]
we had the same problem- only we supposedly OWE $130. What? I by no means make good money, and was under the same impression about thehouse. I realized the other say about the taxes at closing, and I really do need to get around to seeing how and if that helps me….