Tax Day Is Just Around The Corner

Yes, it’s that time of year again, when the bureaucrats of the IRS and the Virginia Taxation Department force average Dans like me to spend hours upon hours completing tax form after tax form.

I worked through some of the forms earlier this year to estimate our bill or refund. But after realizing that we’ll actually owe a small amount of money to the IRS, I delayed the final run-through until yesterday. It took me four-and-a-half hours to complete all of the forms! Every time I thought I was making progress, I hit a line that directed me to a new form.

Part of that is because we are able to claim the adoption tax credit. The paperwork to get that credit, and the related “additional child tax credit,” is particularly egregious and mind-boggling. I’ve always been tempted to hire an accountant and save myself the headaches, but I suffer through it to save a few hundred bucks.

I also have to complete a bunch of extra forms because I registered one of my blogs, AirCongress, as a limited liability corporation. I hired an accountant to complete those forms for me last year, but this year I saved a little money by doing the work myself, with the forms from last year as a guide.

My work on income taxes this year won’t be included as part of the 2008 annual tally for this blog because it was for the tax year 2007. But here are the totals, in case you’re curious: $404 in federal income taxes (almost non-existent because of the adoption credit and our mortgage interest and other itemized write-offs) and $2,915 in state income taxes.

Uncle Sam would have taken $5,161 from us if not for the adoption credit. We’ve now exhausted that benefit from our 2005 adoption of Catie and will have to pay the full federal tax amount minus itemized deductions for 2008. That’s actually a good thing for purposes of this blog because it will result in a more accurate picture of the federal tax bite.

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