02/27/10
Income Tax Time
I have been doing my taxes for a couple of days, and as usual it is depressing. I actually stopped working at the end of March in 2009, but I have made several large withdrawals from retirement accounts. So, total income was quite high. The standard withholding when you make these withdrawals is 20%, which is not really enough. If you end up with a small income, it might be OK, but it is not enough for higher incomes.
I have always maintained my finances in Microsoft Money, but Microsoft is abandoning Money, and soon will not support it anymore. So, I switched to Quicken, and used a conversion program to convert my Money file. This worked pretty good, but I did take the time to go thru all transactions in 2009 and make sure I assigned them to the correct categories. Starting with transactions in 2010, I am thinking about using the “split” functionality to record sales tax, other state and local taxes and fees, and bank charges. I just spent a lot of time going thru all my 2009 paper receipts and online billing statements to try and compile total sales tax paid. The standard amount the IRS calculates from income is always low.
Logically, I understand and agree with the reasons that we have to pay taxes, but emotionally it is always shocking to see how much it costs us. This is specially true when you consider how ineffective Congress can be on such things as health care reform. There are many, many goods and services that the federal, state, and local governments provide to us, so paying taxes is not simply giving the money away.
But it sure does hurt!!
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