Death & taxes

Honestly, taxes are going to be the death of me. After having prepared by getting all the paperwork together and downloading 18 PDFs from the IRS yesterday, I sat down this morning to make a good push and get it done.

Ha. I was cruising along, feeling OK about it all. Nearly there, almost done. Had filled in Schedule B, D, E, Forms 2555, 1116, 4562, 8582 and I was in the home stretch on the main 1040. Just needed to calculate the tax owed, list out the taxes I have paid already and then do the final arithmetic to see what we owe.

But, wait. What is this tax calculating worksheet, tucked away on the next page of the instructions? It applies to me. I looked it over. It’s dependent on this other one, here that I didn’t think applied. OK. Well, I complete them both. Suddenly, I don’t seem to owe any taxes. Line 44 was a big zero. Wow, cool!

My pleasure lasted only a moment. The next line instructs me to see if I have to pay Alternative Minimum Tax. That’s for really rich folks and people with too many tax credits and loopholes. Like me apparently. I filled in the questionnaire and sure enough…I was now in a new mire of AMT tax rules and paperwork. Effectively I had to redo all the forms and schedules at a higher rate, with lots of special new bonus points of income.

For example, depreciation on the house we own and are trying to sell had to be reduced, so there is another $700 in “income”. The foreign earned income had to be remathed into something else, only the instructions aren’t clear and the “higher rate” wasn’t given in the instructions. Or in any of the half dozen publications I grabbed from irs.gov.

So I spent a good two hours digging around trying to figure out how to do the AMT. By 6:30, though, I gave up. I will try again tomorrow morning. Maybe it will make sense then.

I made a death and taxes necklace the other day. I guess I knew this was coming.

Posted by kuri at April 11, 2008 07:16 PM