Thursday, April 15, 2010

Tax Day

Esther posted this question today so I'm using it as my idea for a post today.

Did you receive a refund or did you owe?

We send our taxes to a wonderful accountant that specializes in church workers in Fort Wayne, IN. We have had a pattern the last few years of the years that we had a baby we got a huge refund and the years that we didn't have a baby, we owed. I still don't know why it was working out this way-maybe we spent more of our housing allowance the years that we had a baby? Since we didn't have a baby last year, I expected to owe.

We pay estimated taxes each quarter because pastors are considered self employed. For Federal we are receiving ALL of that estimated taxes that we paid back in our refund plus another $905. We did not pay any estimated taxes to the state. We are receiving $777 refund from the state.

1. Thank you to the Congress for part of this refund because Ram bought a new car last year.
2. Thank you to President Bush and the prior Congress for most of this refund.

It bugs me when people say they are getting a huge refund and they have an excuse to make big purchases with their refund. The refund was their money that they earned, the government either kept it out of their check or they paid estimated taxes and the government had their money. While the government had their money they didn't get any interest or get to invest their money. The government was their savings account without any interest for that year. But in our case this year, our refund really was $905 and $777 MORE than we paid in. We haven't received our refund yet, but it will probably be spent on medical bills that we know are coming.

Our state refund was interesting to me, especially because we did not pay any money in estimated taxes. Of course it is more complicated than this, but $25 was "lower income motor fuels tax credit" and $752 was "Minnesota working family credit" for our 3 Lambs.

Unfortunately, my sister did not do so well. She had several jobs last year that all pay a little more than minimum wage and no benefits. She has had a lot of medical bills after her knee surgeries. She works as a church secretary for one of her jobs and that is considered self employed. She owes $900 even after all of her jobs besides church secretary withheld taxes for her. She currently doesn't have a job (besides the church secretary) and has no money to pay this $900. It just shows how messed up this whole tax system is. Unfortunately, I think the current Congress is going to make it worse for ALL of us and we are very close to the end of refunds like my family received this year.

I read on the internet that a lot of stores/restaurants are having good deals today in honor of tax day. We live too far away to take advantage of the deals, but check it out if you plan to go to Starbucks or McDonalds or other places.

So, did you receive a refund or did you owe?

Our other good news-I'm not sure if it was last night or today (because it was around midnight), but a baby girl was born in our tri-parish last night. This is a big deal because this is only the 3rd baby besides our Lambs that has been born while we have been here the last 7 years. Ram has done some other baptisms for grandchildren that want to be baptized at their home church, but there are only 2 active families in our church with young children besides our family. Of course Ram took the message and didn't ask what the name of the baby was, but he'll visit them soon and I'll find out!


Sue said...

I'm getting a refund! This year and last year after several years of paying. Yes, it's a big mess, and it seems the less you make, the more of a burden it can be.

Wonderful news about the new baby!

Joelle said...

We're paying, but not as much as we thought we would. The previous 3 years we have been using up the adoption tax credit, and Matt figured out how many exemptions to claim on the W-4 (is that right?) so Uncle Sam wouldn't get extra money during the year (I think he put down 14! We weren't having any money taken out for Federal taxes). It wasn't until mid-year in 2009 that he realized that he needed to change the W-4 because we wouldn't be adopting yet that year. So we didn't have enough taken out. That is okay, though. Like you wrote, I'd rather pay later than give Uncle Sam a free loan for the whole year. We are getting a small amount back from the state since we still paid their taxes (ID has a small tax deduction for adoption but not a credit, very different). So - there's the info about our tax day. :)

Glad there is another baby in your churches. Wish you could have our experience - this is the youngest LCMS church that we have been members of. Prior to this we were at one of the oldest LCMS churches I've been a member of (meaning the ages of the members, not the age of the congregation).

Laura said...

We do usually pay...some to the state and social security, none for federal. I try to estimate as close as possible so I have the money in our pocket, not the federal government! This year, however, we had lots of husband worked a lot for Concordia and college tuition. So, I put away a lot more in anticipation of that....but, thankfully we are getting a huge refund! I will have to figure things out for next more child tax credit....but two kids in college is nice. : )

Ethan, Zach, and Emma's Mom said...

I love Witmer. They always do such a good job for us. Hopefully we can get a new administration in the White House in a few years!