Thoughtful Thursday: Taxing

April 14, 2011

Thoughtful ThursdayWith tax day almost upon us (though I’m actually getting an extension because of the audit occurring at the same time), we’ll suspend our “celebratory” discussion of my audit with a related question. If you blog under your real name and you want to comment today an assumed name due to Big Brother, feel free.

When you file your taxes, how scrupulous are you?

For the most part I am quite scrupulous, but there are times when I go for the spirit of the law rather than the letter of the law.

For example, I absolutely pay our babysitters/nannies above board, even though it requires extra expense and extra work. The irony is that by being honest and declaring, I’ve opened myself up to additional queries and penalties that my under-the-table friends avoid. Separate from my IRS audit, right now the state is bugging us about a form I forgot to file, with a possible penalty of several thousand dollars.

With the audit, I had no concerns going in because I knew that the medical deductions were valid and true. But with travel deductions, which are another component of the audit, there were some where a stickler auditor could question the decisions. Would you subtract the day in the middle of the business trip when you hung out with your friend or went sightseeing? I deduct the whole thing, but it’s debatable.

The tough ones occur when it’s up to you to be forthcoming, when the government wouldn’t know because the other party doesn’t file anything. I had some income during the year in question that falls under a nebulous category. Some people declare it and some people don’t. I think technically you’re supposed to, but you could make a case that you don’t have to. The employer doesn’t file anything, so it’s up to the employee to declare or not. During one of the years in question, I didn’t declare it, and DH was shocked that his hyper-scrupulous wife tried to get away with something. I couldn’t really tell you whether I did it purposefully or whether it was just an oversight when I was overwhelmed by several thousand other pieces of paper a few hours before the filing deadline. At any rate, the letter of the law truth is getting sorted out now. Most people can get away with quite a bit of tax cheating/fudging, but when your number comes up, oh man does it come up.

Back to the neverending audit paperwork that has taken over my life. Bah!

When you file your taxes, how scrupulous are you?

13 Responses to “Thoughtful Thursday: Taxing”

  1. jill Says:

    Nothing much to “fudge” on for me now-a-days but I would probably do it if it came up and I thought I could definitely get away with it. I would pay for a service like a sitter under the table and I would accept pay under the table.

    I was a nanny for almost 2 years for a couple who hired me with the agreement that we would both claim my services on our taxes. They got some sort of child care refund/credit that amounted to around $500. I made hardly any money (~30 hours a week and maybe 6 or 7/hour) but I ended up owing ~$2000 in taxes because I had to file as if I owned my own business. It was a mess. If I’d have paid them the $500 and done the whole thing under the table, I would have been MUCH better off.

  2. Elana Kahn Says:

    I just fill out the forms that my accountant sends me. He’s dating my mom, so I know nothing will get by him. 🙂 I make sure I include all of the forms that I’m sent and just fill everything out to the best of my abilities. I don’t go crazy about it…I just do it as best I can and hope I don’t get audited. lol

  3. We tell the truth, 100% of the time. Our motto was, in the beginning, and continues to be, that we cant expect our kids to be honest people if we teach them to “fudge” when it suits them.

  4. a Says:

    I do the taxes. My husband would fudge things (based on the theory that the government screws us any time they feel like it, so we’re not required to be honest with them), but I try to keep it as honest as possible. It’s easier that way – and when there are adjustments or questions, it’s fairly easy to deal with. Fortunately, so far, (and knock on wood), all they’ve done is send back corrections/adjustments.

  5. Amanda Says:

    My husband does them 100% and he is very scrupulous. I don’t do the taxes. I don’t even look at them. I just sign at the end. We do this because I can claim ignorance if some kind of really serious mistake ever happens. It’s a legal form of protection that basically makes my husband take the fall and I protects me and the kid from his “mis-doings”. I trust my husband 100% and I’m not really worried about something like that happening, but perhaps in the future is things get more complicated it’s a practice we can honestly say we’ve had our whole married life. And it’s kinda nice to not have to deal with it too.

  6. St. Elsewhere Says:

    DH is the more scruplous one. He also is one who eggs me on as the deadlines approach.

    I need to supply one statement of income and investment to my office, and they release a form which is used for filing my return.

    I can’t claim benefit on medical expenditure (there is no insurance for IF related things plus medication or that sort). Which kind of explains why I do not stash my bills for medicines and tests.

    But for premium receipts and other investments, I have to supply the record, so that part is stored well.

    Hubby does it for me. I find it effing boring and tedious.

  7. I’m pretty scrupulous, but having moved country twice, it means we have several bank account (checking/savings/investment) in three different countries. We haven’t reported all of them on our French taxes. Just two checking accounts, and one US investment account because a large sum went from our French bank account there and I figured that if they ever going to ask what happened to that money we can better have them know about that US account as well. If it were up to DH, they wouldn’t know of any of our foreign accounts… But of course, if we’re ever audited, I don’t know how to explain the absence of these accounts in our previous filings.

  8. Kristin Says:

    My husband usually does the taxes and we are extremely scrupulous.

  9. Ana Says:

    We try very hard to be scrupulous. We are play-by-the-rules types. But we came upon a situation this year (to complicated to go into detail) where we weren’t positive what we were supposed to do. I ended up claiming a huge expense as a deduction and it saved us $2000 in taxes…which I’m pretty sure I didn’t owe. But I still feel a bit uneasy about it. Hope to not get audited. Your story is making me incredibly uneasy!! I hope it works out OK for you guys.

  10. strongblonde Says:

    you know i’m soooo rule-bound. i am very scrupulous. i just don’t want the “headache” of dealing with the fudging if i were to be audited or get caught. we work with someone to file for us anyway….we usually have a million W2s and other things. it just gets complicated. this year i had to file special forms b/c i was hired by the government as a contractor for a small amount of work. i have a friend who deducts things that i think are a little over the top: she’ll go through her clothing donations, for example, and deduct the ACTUAL cost she paid for the shirt as what was donated. our accountant says that a good average is $100/bag of clothes donated….so that’s what we do. when we looked at her list this year she averaged $500/bag of clothes! and she donated a LOT of clothes. and other household items. she also just gave me a lecture about how i should deduct my GPS b/c i used it 2x to do site visits for students. we bought it for vacations! i don’t think that’s deductable! she just seems a little sketchy! …but then again…i just really like rules! 🙂

  11. Ernessa Says:

    I think this might be a question that only the most scrupulous can answer without fear. As for us we have a tax guy who is scrupulous for us. And back when I was a singleton, I just entered amounts into Turbo Tax, so it’s never felt like I’ve had a choice between being scrupulous or unscrupulous.

  12. Cat Says:

    We are scrupulous. I also try to get as much back as I can and am a stickler for itemizing everything, medical or charitable. I even take pictures of everything we donate to places like Goodwill in the event of an audit and record it online in the It’sDeductible program to make sure I get as much as the government will allow (plus i stink at figuring out the true value anyway).

  13. Tara (TIMO) Says:

    Sorry for the late reply. Another rule follower here. We use whatever tax program is free for military. They tend to alternate years. If the program thinks we get the deduction, then we take it.

    We got married on April 15- Tax Day. It was either that or April 1- April Fools Day. We took the lesser of two evils. But it also means neither one of us will ever forget our anniversary what with all of the reminders about filing taxes.

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