San Diego life style

Taxes …No Escape

I remember when I got the news I had to pay taxes. I happily cashed my little checks from my teenage job at the PB library each year with no thought of paying taxes. Then an IRS letter arrived …I owed taxes … in fact back taxes..Surprise! Oh so innocent.

Then I started playing the W-2 game and prepared my taxes by myself … it seemed easy. Then the word itemize entered my tax paying life. Itemize and you will pay less taxes. So I tried it and sure enough I got more money back. Then I started looking forward to tax refunds. Always something special to do with that. Then take my information to a tax preparer. They know how to get even more back.

So I showed up at HR Block. The poor gal…My life had already become financially complicated … after 2 hours she asked if she could take my taxes home and work on them over the weekend. Yes.

Next time I went to preparer who specializes in teachers. That year the word audit entered my tax life. I had answered two different questions with the same information and the preparer didn’t catch that so big error. Preparer defended my mistake for the audit and I didn’t have to pay penalties.

Before I became a Realtor I was buying and selling homes and playing the landlord game. Our Realtor failed to introduce us to the 1031 exchange. So I sold and turned around and immediately bought the next house without that tax benefit. That year was an unexpected $10k in taxes. When I became a Realtor I became an expert at 1031 exchanges.

Then I added real estate business expenses to my life and audit number two arrived. My tax guy handled it and the IRS owed me money. In the meantime I was accumulating boxes of receipts and records. I had used to prepare my returns. When I moved from my last house the new owner called. I had forgotten a small attic above my kitchen filled with tax returns. Guess what my attic and closets still have boxes of returns. A goal this year is to visit multiple shredding events.

I went to the same tax guy for years. He loved my preparation…all organized and with legitimate claims backed up with receipts. We always had so much fun laughing and talking but, he knew I was always stressed and hated tax time. He said he’d happily meet with the IRS on my returns any day.

Then came audit number three…My name had randomly been pulled for a general audit. Next lesson for me …every single thing is looked at …bank records to back up claims. My tax guy had a big smile…he told me this is going to be fun. I can defend your returns easily. He had the IRS guy come to his office…of course no problem in fact it turned out the IRS owed me more money again. My tax gal told me they don’t do those types of audits any more.

One day I was shopping at a furniture store in PB and the tax topic came up. The owner told me he doesn’t pay taxes. You know he said paying taxes is a choice. I choose not to pay taxes. Wow with what I have dealt with …all I can say is I choose to pay taxes.

Then my husband passed away and my trust split into a Survivor’s trust and Decedents trust. The Decedents trust got it’s own tax ID and I was then responsible for two sets of tax returns. Eventually another trust was established and it also got a tax ID and yes now I do three tax returns. You know those refunds that people get…well if a refund is coming for me they roll it over into next years taxes. So no more exciting checks from the IRS.

After that the word estimated taxes showed up …in addition to what is withdrawn I had estimated taxes to pay. Yep every quarter pay taxes.

Now this year with tax law changes I was really unsure what would happen. My tax gal said a lot of people have been concerned. She started teasing me saying I think you need to go to tax therapy…it is like you are suffering from tax PTSD. Like no kidding. When she finished she started to throw my paperwork in the trash. She said do you want this? I said no and then I quickly said yes…still can’t let go of the paperwork…more to save and store. Good news…I survived another year.

I really do believe in taxes … I do not feel any ill will …I proudly pay them. I just wish it was easier.

Recently I have stepped into the role of executor of an estate. The first task was to get a tax ID number. Apparently the estate is not represented by the individual’s social security number…Now the investments and accounts are identified by the newly created tax ID. No escape from tax issues even after death.

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