You’re Not Welcome, Uncle Sam!

Stacks of Dollar BillsI just finished preparing my federal income tax return late last night and got it off in the mail today with my payment…GRRR. My husband was really hoping for a refund again this year, since we had an added deduction and major medical expenses for that delivery. But no, we had to pay!

You see, despite having a lower sales volume (in dollars) in our business, we drastically improved our gross profit margin, maintained similar expenses (in total dollars) and somehow ended up with a much higher self-employment tax. Our exemptions and itemized deductions wiped out our adjusted gross income, but our tax credits weren’t enough to offset our self-employment tax. Okay, so we didn’t end up owing any income tax, but the bottom line is we had to write out a check!

But you know, that’s not the worst of it…the worst part is the stress and unsettling feeling of…what if I get audited? It was such a nightmare pulling all those receipts and paperwork together, generating spreadsheets, compiling reports, hoping I was doing everything right. I didn’t claim anything I didn’t have a receipt for and this year I made sure we had written documentation on the business use of our vehicle so I could claim that expense. Unfortunately I didn’t have receipts for the donations I made to the thrift store all year, but that didn’t matter since it wouldn’t have lowered our bottom line anyway.

I used Turbo Tax (for the third year in a row), with the idea I could take advantage of all the little known deductions available…after all, when you take your paperwork to a tax accountant to prepare your return, they just enter it all into Turbo Tax and charge you bigger bucks. Oh yeah, they sign their name too. I’m glad I had the software to walk me through it. But truth be told, I wish I didn’t have to go through all the trouble of the whole mess.

All in all, I did my duty. I rendered to Caesar Uncle Sam what was due to him…but I’m not going to lie. I didn’t like it one bit.

How can we prevent this stress going forward? Spread the word about the FairTax proposal!

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