“I AM A GOLDEN GOD!!!” That’s what I kept screaming after I did my taxes, unassisted, for the first time tonight. It also happened to be me and my partner’s anniversary – the perfect time to run some numbers :). Despite how annoying and seemingly redundant our tax forms are I was so excited that I was able to do it on my own!
Previous years I had used TaxAct, which is a useful software if you have complicated taxes, but this year has proven to me that it is completely possible to do it on your own. Another reason I wanted to learn and become comfortable with my own taxes is because the first time I entrusted them to another human being (instead of a program like TaxAct) they apparently cost me $800 that I didn’t get back until five years later.
I am of course lovingly referring to my mother :). My first year out of college she did my taxes. It was complicated with me moving from Massachusetts (where I went to school) to New York, being a part time resident and starting work half way through the year. I thought everything went fine until I received a check a few months ago for $800…for my first year’s tax refund. Apparently there had been a mistake and it took the IRS five years to find it. I am grateful they did, but the incident really did solidify my belief that you should know how to handle your own affairs. And so I tried!
My taxes this year weren’t overly complicated, but did involve a few moving parts – specifically:
– W-2s from 2 companies
– Unemployment income
– HSA
– Traditional IRA
– Investment dividends
Like last year I got a little confused with the HSA because it has a separate form to fill out in addition to the 1040, but does not specify that you should really only use it if you did post-tax contributions. If you had an HSA through your employer they are pre-tax and already not factored into your taxable income. Confusing, but we got through it. I discovered that I’m actually getting a larger refund than I originally predicted because of how much I asked to be withdrawn from my unemployment income and I was able to e-file my taxes for free at TaxAct because I didn’t make much money (less than $54K). How wonderful! Now I don’t have to wait months to mail in my tax return and instead will get my money in about a week, directly deposited into my bank account. I also calculated that I paid less than 9% in taxes. How delicious!
Next year – if all goes as planned, which I can never count on happening 😉 – my taxes should take all of 5 minutes. I should have one W-2, no traditional IRA (sad), no HSA (also sad) and no additional wonky income. I’ve acquired another skill and feel all powerful. Onward!