Welp, it looks like Congress did what it does best — which is absolutely nothing — and pressed Ctrl-Alt-Del on that whole government thing. If you’re affected, that’s lame and I’m sorry. If you’re not affected, I’d tell you to call your elected representatives and let them know how awesome they are at doing their ONLY JOB (!), but I don’t know if phone lines work in a government shutdown… do traffic lights work? Does time work?? Does air work?!! I can’t breathe!
Nah, I’m good. We’ll all be good. In light of our government siesta, it got me thinking on that one little contribution we all involuntarily cough up that should ensure shutdowns don’t happen: taxes.
I guess I’ve been paying income taxes since I was 16, but my dad did my 1040EZ’s for me and I usually got money back, so that doesn’t really count. It’s only been since Joanna and I graduated from college that we’ve begun to (barely) understand, file, and actually fork money over our own hard-earned cash for taxes. And in that short time, we’ve started looking and thinking about things with tax-focused lenses. Here are a few of them.
- Having a baby on January 6th blows.
$3800. That’s the amount of deductible income that vanished at the stroke of midnight on New Year’s 2013. Despite all my best lectures through my wife’s belly, our little girl decided to stay warm and cozy another week.
- Donating stuff? Get a receipt!
I know, I know. You’re probably not donating your old pajamas and Skip-It toy (wait up, don’t just give that away!) to get anything out of it. You just want to get rid of it and hopefully help someone or some organization in the process. But that doesn’t mean you shouldn’t help yourself, too! Ask for a receipt with your donation to later use as a charitable contribution deduction. Don’t think that charitable tax deductions have to be small, either. You can donate a large vehicle or boat for charity and receive a sizable tax refund. It clears up some space in your yard or garage for a newer boat and, best of all, you’ll know that you are making a significant contribution to the charity of your choice. Just go online and request the paperwork associated with the donation and spend a few moments filling it out at home. After that, you’ll have helped out a great cause and made some money for yourself.
- If you work from home, create a workspace.
Outside of the mostly obvious logistical benefits of having a space set aside in your home for working, it can also help you qualify for a “home office” deduction. There are a lot of rules and requirements, but if you meet the criteria, bust out the tape measure and carve out some prime office square footage in your crib.
- $50k salary ≠ $50k salary
I remember hearing “We’ll start you at $32,000” for my first salaried job offer and wanting to fist pump my way all the way home. I remember excitedly getting home, getting out a piece of paper, and doing the math to figure out my bi-weekly paycheck. You can imagine my punched-in-the-gut expression when I looked at my first paycheck and it wasn’t even close to the $1333 number I had calculated. Now whenever I hear a salary, I immediately slash 25% to 35% for a more realistic take-home pay number.
- Why am I waiting in this DMV line?
Now that I know how much money Uncle Sam pockets from me each month, I can’t help but notice tax-funded waste everywhere. I don’t try to be a grumpy geriatric, but when it takes me three hours to wait for my turn to take a stupid DMV written test, you better believe I’m going to have a few questions about where my money’s going. And while I fully understand the importance of taxes, government spending, and public employment, I’d just like to see my dollar work a little harder sometimes. *NOTE: public employees work just as hard, if not harder, than private sector employees. My grief is with the system that puts them in positions where they’re understaffed and dealing with constant inefficiencies. It’s 2013! We can figure this out, people!
- Cash in on pre-tax savings, y’all.
“Pre-tax” meant absolutely nothing to me a few years ago. I thought it was a period of human time that occurred after the prehistoric age, but before the release of Seal’s “Kiss From a Rose.” What I didn’t realize is that pre-tax programs and investments (like 401k’s, 529 plans, HSA/FSA, transportation programs, etc.) take the money from your gross salary (hence pre-tax) and leave less money on the table for the government to tax. For example, let’s say you earn $30,000/year and put $5,000 toward pre-tax programs. When tax time comes, your adjusted gross income before other deductions and adjustments would only be $25,000, which means less taxes. Awesome.
- Our Congress is awful.
Just in case I wasn’t clear in my introduction, I hate that they’re in charge of my tax dollars.
It’s hard enough for Joanna and me to come to grips with the fact that we’re actually “adults” now with careers and responsibilities and a freaking human being that is ours, so filing and paying taxes has been an interesting coming-of-age. And while we recognize and appreciate our responsibility as citizens to pay our dues, we want to be absolutely certain that we give what’s required — and not a penny more.
What are your thoughts? How have taxes messed with your brain? How badly do you want to punch Congress in the face?