income tax
Jan. 13th, 2006 03:34 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
mamajoanI have received my W-2 form from my employer and the statement from my mortgage company showing how much interest I paid for 2005. So naturally I went to irs.gov and downloaded a copy of the 1040 and started looking at it.
I think I may have to actually have a professional do my taxes this year. *headdesk*
The first sticking point is the money I received early in 2005 for my stock options from the company I used to work at. That company got bought out and I was paid a certain amount for my stock. I am going to have to dig up the paperwork showing how much I originally paid for the stock and how much I got for it, and then it's going to be a long-term capital gain, which already fills me with dread, just in the sense that it's so frickin' confusing. Digging up the necessary info is going to be hard. Figuring out how to put the numbers into the right boxes to make the IRS happy is going to be a lot harder. Normally I enjoy that kind of thing, and can figure it out eventually, but right now I just don't know if I have the energy or the brain capacity.
The second sticking point apparently is going to be my childcare stuff. I was under the impression that you could deduct up to $5000 worth of childcare expenses. So why, when I look at IRS form 2441, does it seem to be showing that I can't get a credit for anything over $3000? This bodes ill since I put almost $5000 into my dependent-care account for the year (which is to say, I didn't pay taxes on that $5000). It seems like this might be saying that I'll have to go back and pay taxes on $2000 of that. I am confused and unhappy about this.
It's also a bit startling and alarming to discover that I spent $10,000 in mortgage interest over the year, and the total amount of my mortgage only decreased by about $2,000. I know that's how it works, but seeing it all spelled out (uh, numbered out?) like that is pretty sobering. Good thing the interest is deductible.
yikes.
I think I may have to actually have a professional do my taxes this year. *headdesk*
The first sticking point is the money I received early in 2005 for my stock options from the company I used to work at. That company got bought out and I was paid a certain amount for my stock. I am going to have to dig up the paperwork showing how much I originally paid for the stock and how much I got for it, and then it's going to be a long-term capital gain, which already fills me with dread, just in the sense that it's so frickin' confusing. Digging up the necessary info is going to be hard. Figuring out how to put the numbers into the right boxes to make the IRS happy is going to be a lot harder. Normally I enjoy that kind of thing, and can figure it out eventually, but right now I just don't know if I have the energy or the brain capacity.
The second sticking point apparently is going to be my childcare stuff. I was under the impression that you could deduct up to $5000 worth of childcare expenses. So why, when I look at IRS form 2441, does it seem to be showing that I can't get a credit for anything over $3000? This bodes ill since I put almost $5000 into my dependent-care account for the year (which is to say, I didn't pay taxes on that $5000). It seems like this might be saying that I'll have to go back and pay taxes on $2000 of that. I am confused and unhappy about this.
It's also a bit startling and alarming to discover that I spent $10,000 in mortgage interest over the year, and the total amount of my mortgage only decreased by about $2,000. I know that's how it works, but seeing it all spelled out (uh, numbered out?) like that is pretty sobering. Good thing the interest is deductible.
yikes.
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no subject
Date: 2006-01-13 09:01 pm (UTC)no subject
Date: 2006-01-13 09:53 pm (UTC)no subject
Date: 2006-01-13 10:05 pm (UTC)How much does your accountant charge??
no subject
Date: 2006-01-18 01:44 am (UTC)no subject
Date: 2006-01-13 10:26 pm (UTC)We have been using the online version of TurboTax (http://www.turbotax.com/index.html?priorityCode=3732800000) for several years - it's inexpensive and easy to use. The software will step you through your stock options (and everything else) in plain English, although IRSese is a click away if you choose to plough through it, in a Q&A format, and will actually prompt you if it picks up anything it thinks you might be overlooking.
FWIW, my neighbor's BIL and SIL are IRS agents, and she says they suggested that she use TurboTax.
Re: the dependent care confusion
IRS Form 2441 is used to calculate the Child and Dependent Care tax credit (limit = $3000 for one child). What you have been contributing to is a Flexible Spending Account, yes? for which the limit is $5000 for Dependent Care Reimbursement. Assuming that you have an FSA you're fine - in fact the FSA disqualifies you for the credit, I believe.
no subject
Date: 2006-01-14 01:18 am (UTC)no subject
Date: 2006-01-14 01:41 am (UTC)The stock options thing could be complicated. I'd definitely talk to a professional about that.