Thursday, April 10, 2008

Income Tax Blues

Somebody asked me today why I wasn't smiling. I guess I'm not really a smiling kind of person (I can blame that on my previously bad teeth), but I wasn't aware of any particular problems today. I blamed my lack of cheer on the awful weather: cold and rainy. Upon further relection, I concluded that I was suffering from the Income Tax Blues.

Yes, I finally completed and submitted my 2007 tax forms on Wednesday. That's very late for me. Some people file early in anticipation of refunds, but I knew better than that. I suspected that, despite large quarterly estimated tax payments, I'd owe more. That explains my procrastination.

It turns out that I was right. Writing that big check, plus another for my first 2008 estimated tax payment, dismayed me, although I was able to do it without the prospect of any missed meals. I guess this was a wake-up call. What did I learn?

First, it seems that tax rates are rather high these days. I put too much in tax-sheltered annuities while I was teaching, and now those Required Minimum Withdrawals, in addition to my pension, are killing me. I pay more in taxes than I did when I was working.

Second, I need a tax planner and advisor. I've always assumed that any intelligent person should be able to use a tax preparation program himself or herself, and I've done so successfully. But as my newly-acquired financial advisor pointed out, I'm paying the government too much. I seem to pay more than a lot of really rich people, and I don't qualify for this year's tax rebate, either. I don't even have a home mortgage deduction. Perhaps I'm too conservative.

Am I complaining? Not really; I feel fortunate to have such a problem nine years past retirement, and to be able to afford the tax payments. Still, there's something about writing those checks that made me less than cheerful. Next year: better planning and lower taxes, I hope.

If that doesn't work, I have to learn to just pay up again and keep smiling.

Copyright 2008 by Marlys Marshall Styne

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