TAX time question

[Richard L]

TJR,

1997 was the same year I was trying to file for my tax refund from 6 states. I don't know if the problem was with TurboTax or the interface to the PA State tax return, but it would not let me enter the amount I earned while on-site in PA. It kept defaulting to the total taxable amount from my Federal income tax 1040.



Since the TurboTax State program for PA did not work, I did not buy the programs for the other states.



I had tried TaxCut once as the first Tax preparation software I ever tried and it sucked. It kept telling me there were errors or items missing that were not in error and not missing. I eventually printed the forms with the so-called errors and sent it to the IRS. It wnet through with no problems and they never said I had any errors on my return??



That's when I switched to TurboTax and it has run flawlessly for my Federal taxes. On the PA State tax program gave me problems.



...Rich

 

[Thomas Rogers]

RichardL, others working and living in different states or working in multiple states,



I don't necessarily remember the specifics for that year, but when you work and live in different states (or work in multiple states), often a "recipricol" arrangement between the states kicks in. For example, if you live in NY but exclusively work in another state, like CT or PA, then you still have to fill out two state returns, and often BOTH returns show the same total wage amount since in the single job case you only have one W2. Remember, each W2 is broken up into total wages, state and local wages.



If doing taxes by hand there is a special form if memory serves for both the states to show that you paid taxes while working in one, not the other, and a credit happens for the state that it would appear you owe the taxes in. If using TurboTax or some other software, a lot of that happens behind the covers.



It is possible, RichardL, that since you didn't download, install, and enter the info for all the state programs (only PA), that it didn't have enough data to perform the recipricol functions.



Just a thought.



TJR

 

[Tom Schindler]

Caymen--there is no such thing as a "Fair Tax", as any tax is going to have someone, somewhere, paying it, and those people aren't going to think it's fair.

As TJR said, a national sales tax is the fairest form of Tax there is. You pay tax's on what you spend, not what you make. Every family gets tax's back every month based off the poverty level. So if I made 1 million a year, but lived off of Ramen Noodles and tap water, I too could live tax free.



If I work extra overtime, I don't get penalized for working hard by going into the next tax bracket.



I wouldn't have to file tax's ever again, now would I ever fear getting a letter in the mail that says "IRS".



Why should we be afraid of our government?



We say we aren't, but in reality, every single one of us are.





Tom

 

[Thomas Rogers]

Exactly, Caymen.



My wife worked several months last year as a teacher's assistant. She is doing this not because we need the money, but because she needs the experience and wants to make connections in the school system as she finishes her teaching degree nights.



She made just over $5,400. That extra income changed our tax basis, and because of it we OWED an additional $3,100 in federal taxes alone (not including state, local, SSI, medicare).



To add insult to injury, our 6yo daughter is in kindergarten. Our public school system has kindergarten 1/2 day only. My wife's job was full-day (during school hours, 8-3:30). So, we could send our daughter to 1/2 day school for free, and pay someone to watch her the other half, OR we could send her to private full-day kindergarten at the same school my wife was working. At BEST, my wife's take-home pay JUST covered our daughter's tuition, with a little money left over.



However, when you calculate the extra tax burden, we lost money by her working. Furthermore, since we hit the AMT (Alternative Minimum Tax) again this year, all educational expenses for my wife's college are exempt from deductions as are a ton of other exemptions that regular people enjoy.



My wife and I probably had a gross income higher than three average families combined, but we always try to max out 401k, contribute as much as we can to our kids TAP 529 plans (college savings), give to charities, etc...and we never seem to be able to really save for nice vacations that others seem to take every year. We do have our credit cards paid off though.



Uncle Sam takes WAY too huge a bite out of guys that work hard and work extra. I worked very hard last year, clocking over 1000 hours in my part-time job, in addition to my full-time job.



As Caymen said, why should extra work mean extra taxes?



TJR