Death and Taxes
Posted by moonimus on Feb 1, 2008
It’s about that time again folks. Taxes, taxes, taxes. So what does this CPA do for taxes? I use Taxcut. I was really angry last year when we got a sizable refund from New York but ended owing the IRS nearly double the refund. I was stressed because we had bought our apartment three months earlier and we were strapped for cash. Of course, the IRS doesn’t care if things are tight and they certainly won’t wait for your state refund check to arrive so that you can pay your Federal taxes. They are like Robert DeNiro in Goodfellas. They want their money.
But this year I feel more at ease since we have a $1,000 emergency fund. Also, our daughter was born this year and we have a full year of mortgage interest to deduct. We did not nearly make as much money in 2007 as we did in 2006 since Mrs. Moonimus has stayed home for about 4 months. My expectation is to be within $500 on either side of our State and Federal taxes. And if we come out more than that on either side, I will have to adjust my withholdings appropriately.
Lately, I have also been thinking about our wills and general estate planning. While I plan to stay alive as long as possible, anything can happen at anytime. I’d hate to be financially unprepared for that moment especially if we were to leave our daughter behind. I have a friend who is a lawyer that specializes in estate planning so this will definitely be another “to do” in 2008. I have been waiting to finalize life insurance on Mrs. Moonimus which should be done by the end of next week. Life never stops…
While the IRS wants their money, they are willing to set up payment plans. It’s not as if you’re going to flee to another country.
They charge a not-outrageous interest rate (probably around 10% now) plus penalties (one-half of one percent of the unpaid tax per month, max 25 percent).
Glad to hear I’m not the only CPA that uses TaxCut and the like for their own taxes! I’ve used either TurboTax or Taxcut for my own taxes for years, although my area of expertise isn’t tax. Unless you have really complicated taxes, there really isn’t any reason you can’t use tax software to prepare your return.
You are right Minimum, the IRS will usually be flexible with payment plans but I still say they want their money when all is said and done. I just really hated trying to scrounge around to cover the tax bill.