Monday, March 21, 2016

Income Tax Time

I finally got around to filing my 2015 income taxes this week. No one's favorite thing to do, but it sure feels good to have it done.
In past years, I've done tax filing much earlier, usually around early February. But then I had a couple of years where I got some late or changed information around the end of February, which is a royal pain. So now I wait until sometime in March to minimize the chance that I'll have to make corrections. I'm running a bit of a risk that some scammer will steal my info and file for me, but I suspect that waiting a month doesn't increase that risk too much. Basic protection of personal info is much more important than that extra month.

Like last year, I used TaxAct for my filing. I've used TurboTax in prior years, but TaxAct is slightly cheaper for my needs, and seems to work just as well. I suppose I could skip the tax-prep software entirely and do it myself with the IRS forms, but I'm afraid I'd miss something. Besides, it's just so convenient to go through a user-friendly guided process rather than trying to wade through the system myself.

The hardest part of the whole process is gathering all the information needed. This year I had six different financial institutions of various kinds sending me forms, plus a few charitable contribution receipts to keep track of. Several sent me more than one form. Some were sent only electronically, some only on paper. There's no good way to make sure you have everything, but I do my best by setting all the paper stuff aside as it hits my mailbox, and keeping a list of all the online accounts I need to check for electronic forms. I'm pretty sure I managed to find it all.

The actual process of entering information into TaxAct is pretty straightforward, once all the paperwork is in order. The hardest part was making sure to find the right spot to enter everything - for instance, it took me a good 10 minutes to track down exactly where I was supposed to put the info on a 1099-B. Got it all eventually, though. Had to skip past a whole lot of stuff that doesn't apply to me, but I'm pretty sure that's true for everyone. The tax code has special cases for a whole lot of people, and I can't imagine anyone uses anything close to all of them.

End result, I don't owe any federal taxes because my income is too low. Which is as expected, with no job income and fairly small amounts of interest from investments. Michigan was happy to take their 4.3%, though, since the state doesn't have the same system of deductions/exemptions as the federal government. So nothing to the feds, and a fairly minor payment to the state...pretty much the same as last year, which is a good thing. The best thing to hear at tax time is that there are no surprises.

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