anyone know taxes..???

For several years now I have always filed the 1040EZ form for my federal tax. This is better known as the short form and takes me about 20 minutes to complete. For the last several years I have received about 1400 dollars back on a refund using the short form and I am happy with this however...I am single,live alone with no kids and do own a home thus several people have told me to use the long form for larger refunds.

I know nothing of taxes and have been told with my interest paid on my home loan being deducted on the long form that I would do much better. It seems to me that a few quick figures do not add up and that in my situation they are both about the same....Is there a rule of thumb or something that says the itemized long form is always better than the short form?

If it matters I see my last home loan statement showing me to have paid 6640.00 in interest as well as 911.00 in taxes this year on my home....the standard deduction on the short form is already 8400 dollars and is more than my interest and taxes so would it not be better for me to use the short form anyway.

Taxes blow my mind as they are so confusing thus the reason I always use the short form however if it will make a considerable difference I will try the longer itemized form. Could it be that with no kids for dependants and not much else to deduct in my case the short form is the best choice?

On the long form you can also deduct your state and local income taxes.

As a general rule of thumb if your itemized deductions are more than your standard deduction then it pays to itemize. Also note that the $8400 you deduct on the short form is the total of your standard deduction AND one personal exemption (for yourself). You still get the personal exemption even if you itemize. Given that the total you gave just for interest and real estate taxes is already way more than the 2006 standard deduction of $5150 for a single person, and you can also add state and local taxes as already mentioned, it makes sense for you to itemize.

Get TurboTax Deluxe for the computer - something like about $40 if you shop around - all you do is answer all the questions and it does the rest. You'd probably know from then on if it was worth doing the long form as it's very thorough at getting all your potential decuctions - if your LEO you may have quite a few job related expenses that are deductable also. Hate the whole tax thing myself too - did the short form for a long time even though I was making a quite a good income but I had almost no deductables. Doing taxes are such a huge time suck and cloud of doom hanging over most that I hope some day the eliminate them and just put it all on sales tax - afterall making money does you no good unless you spend it so why not just tax all sales and services a little higher.

Everyone tells me I should itemize. Then I show them the amount of interest I pay yearly on my home (my only real deduction) and then show what the standard deduction is for myself and two dependents.

It's a no brainer. I file a 1040 but don't itemize.

matrixshaman said:

Doing taxes are such a huge time suck and cloud of doom hanging over most that I hope some day the eliminate them and just put it all on sales tax - afterall making money does you no good unless you spend it so why not just tax all sales and services a little higher.

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I'll second that. Taxes for the ordinary person are omnious enough. When you're self-employed like I am they're even worse. I dread jumping through all the hoops each year. Give me a sales tax any day.

It's worth looking into - dont forget that you can itemize alot of work related stuff such as uniform cleaning, and your duty lights that you personally purchase. Also don't forget the little add in taxes like the Jeff County occupation tax and I think the city of Bham has something similar. Luckily the wife took over the tax stuff - so I am not up to date on current statutes but if I recall correctly it almost always pays to itemize. I would suspect the ez form benefits the gov more since it's the easy way out. Worst case do them both ways and submit the one that is best for you.

I did think about all the work related items I could deduct such as duty lights however my department does supply us with a light however it is a crappy light so we all usually get our own....about the only uniform item not supplied is our boots and I paid 59 dollars for my last pair. I also thought of deducting my cell phone bill however once again it is not a requirement for work even if it is used mostly for work......when it comes down to it I could deduct several smaller items and somehow relate them all to my work however if it came down to it I feel as if I could not "prove" it if I were under an audit.

It sounds very weird however one time many years past I always did the longer itemized forms.....this is when I was married and did claim my home and other items for work. I had to pay somewhere in the area of 1300 dollars each year. Ever since my divorce 5 years past I swapped to the short forms for ease of use and have always received about 1300 average from Federal and about 250 dollars from State.

I will try the on line forms and do it both ways this year just to see what works better. I find it hard to believe that so many use the longer forms and get bigger refunds doing so and this must surely mean that I need to be doing the same thing. Maybe I am simply ignorant as to all the deductions and it just seems to me that I am doing better with the standard deductions.

I sure do hate this time of year none the less as it reminds me just how much we all pay in stupid taxes.

Also forgot to mention that our department pays us 200 dollars monthly for uniform allowance and supplies our uniforms. I do not believe I could deduct any cleaning related costs due to this money being provided as it is said to be used for cleaning.... I simply wash all my stuff in cold water and iron it all myself. The extra 200 dollars comes in real handy for other stuff.

You might also try redoing some of your returns from the past few years before the statute of limitations runs out. If you find you could have saved by itemizing you can file an amended return and claim a refund. By not itemizing you are in effect overpaying your taxes.

Now that shows how ignorant of taxes I really am....I had no idea you could go back and re-file an itemized deduction once completed. I surely appreciate the information jtr1962....and if it all goes as planned I will have several new lights very soon...hehe

I think it might be wise to seek the opinion of an accountant.
Norm

I'll second Norm. I haven't done my own in years. There are many things you could possibly be missing, maybe not, but you won't know for sure unless you do. I think I paid about 160.00 for last year's tax prep. If you decide to go this way I would look for an accountant that is open all year and is an enrolled agent. Good luck and as always YMMV.

Norm said:

I think it might be wise to seek the opinion of an accountant.
Norm

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Not an accountant!!! Accountants are not tax specialists. Some do taxes & usually over charge because they are an 'ACCOUNTANT'.
A much better choice for you would be Turbo Tax, H&R Block, Jackson Hewitt or an independant Enrolled Agent, all of which will likely cost much less than an accountant & will get you the same numbers in the end.
Your tax situation sounds very straight forward for a tax person or tax program.

I own my own business & home so I have a more complicated than average tax situation.
I work with an enrolled agent, because if not for her professional tax advise my vehicles would be older, bank account smaller & flashlights fewer.


DK

Norm said:

I think it might be wise to seek the opinion of an accountant.
Norm

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+1, and not one of those H&R block people

A good CPA usually pays for him or herself. Their services might run around $150 to $300 (depending on the # of forms and how complicated you are), and generally worth every penny.

Did a 'rough estimate' tonight based on my last pay stub of '06 and the '05 return for items like student loan interest. Looks like the wife is getting about $3K back. Too bad it's already spent (kids college fund, paying down the mortgage-real fun adult ways to spend money).

+1 on what Norm and Datasaurusrex said, Robocop.

We consider the money we pay our tax specialist an investment. It saves us the stress, hassles, and potential errors of preparing the return ourselves, plus they know all the ins an outs of tax rules to maximize your refund (or minimize what you need to pay). IIRC, they can even go over previous year's returns and make ammendments.

Not really sure if TurboTax or a Tax specialist is better for any one situation but using TurboTax is like sitting down with a specialist and having it interview you with lots of questions. Then it fills in all the appropriate forms for you based on your answers. I even used it when I was trading in the stock market and that gets fairly complex.

LOL. tax is the hardest thing to understand in the whole world.

the furry hair scientist said that too

Albert Einstein, just in case you don't know who is th furry hair scientist.

I think few if any people understand the horrendously complex tax laws. Certainly the clueless fools we elect to the government don't.