I have a personal tax preparation agent. The moment I get my tax forms, I race to his place. We sit at his kitchen table, he sharpens his pencils, he pulls out an old solar-powered calculator, and we go to work. At some point in time, his pet cat will walk into the kitchen and rub against my leg.
Then, when the taxes are complete, he tells me how much I will receive and how much I will pay, depending on whether I get a refund or I am indebted to the State or to the IRS.
Last year, with the federal tax returns scrambling things up, I needed to prepare for the future. Now mind you, I trust my tax preparer. He’s not from one of those tax preparation places like H&R Block or Liberty Tax or the like. He’s independent and he works very hard for his customers.
He told me, “Chuck, I don’t like what Donald Trump has done with the taxes. So I need you to consider putting in an extra $5 or $10 of withholdings from your pay check, just in case.”
Yeah, I’m kinda worried about what our micro-fingered Tweeter in Chief might do. I still think he might try to complete his plan to have Mexico pay for his border wall, by sending me a tax bill addressed to “Chuck Mexico.”
So … I took a chance. I asked my day job to take out an additional $75 per pay period for my federal tax, and an additional $75 per pay period for my state tax.
Yeah, that’s $150 I won’t see … but I am reminded that this type of “enforced savings” was part of our economic culture years and decades ago.
I recall that my Grandma Betty (God rest her soul) often had a few dollars taken from her secretarial paycheck, dollars that were placed in a “Christmas Club” account. As a kid, I could not grasp why my nice Jewish grandmother had a Christmas Club account, that maybe perhaps some Gentile was contributing money to his “Chanukkah Club” account. Oy vey izmir.
But, as the holidays rolled near, her bank would tell her that there was a nice lump of money waiting for her on December 1. Sweet.
That’s why I went with the overpayment. The fact that I need a tax preparing agent to handle my taxes means that I’m smart enough to choose an expert – especially since I’m also smart enough to know I would mess up my taxes if I did them myself.
And in the end … after all my efforts to over-withhold for the year…
I got some nasty surprises.
First off, this is the final year where a person can declare maintenance / spousal support / alimony as a deduction. It used to be that the payor could deduct 90% of alimony, while the receiver must claim 90% of the alimony on their tax form. Next year, that deduction goes away.
Whew. Good thing my requirement for spousal maintenance ended last August. Moot point.
Secondly, I’m still responsible for gambling and prize winnings, especially if they involve a W2-G tax form. And yes, World Tavern Trivia was kind enough to send a W2-G form for that portion of the $5,000 my Stir Crazy trivia teammates and I won at last year’s Trivia Nationals. By the way, it’s nice being a multi-year champion at nationals. 😀
In the end, however… even with all the withholdings and over-withholdings… I finished with about the same tax refund. A small amount for Federal, a few extra dollars for State. Geez, you would think my tax preparer was Lewis Carroll and the Red Queen. “It takes all the running you can do, to keep in the same place!”
In other words, I’m not running to B&H Photo tomorrow to acquire a 58mm f/1.2 Noct-Nikkor lens. Maybe a down payment on one, if I’m lucky…
That being said … I’ve heard already that early preparers are seeing smaller tax refunds from last year – and, in fact, some people are now being hit with massive tax bills. I guess Trump and his Republican cronies got what they wanted after all. Robin Hood taxes – take from the needy and give to the greedy.
Essentially … all I can do is thank my tax preparer (as well as my Grandma Betty) that I at least fought my way to a tax refund. Heck, I may need to have even more withheld this year … if for no other reason than I have no idea what 2020 will bring.
Well, if nothing else, I did take care of my taxes.
Too bad we can’t say the same for the President, amirite?