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23916. anomie - 4/9/2008 8:24:14 PM Ms No, But you deducted the same amount from last year's tax, no? So by claiming the refund as income, you are simply correcting the record from last year. Otherwise you'd be deducting the same amount twice.
Your tax advisor doesn't get this? 23917. wonkers2 - 4/9/2008 9:07:15 PM No, Ms. No, they don't. More guns aren't the answer to the problem. 23918. Ms. No - 4/10/2008 7:07:49 AM Anomie,
I'm not sure if you're kidding or if I'm just not getting it. That money was earned in 2006. Just because the government was holding it until 2007 doesn't make it income for 2007. 23919. Ms. No - 4/10/2008 7:08:38 AM Ah, Wonk, you know I was teasing you. Dontcha eveb wanna throw a rock at 'em? Maybe just a little? 23920. anomie - 4/10/2008 12:03:02 PM Ms No,
I'm not kidding. I know ot sucks, but it makes perfect sense. Each year we deduct the total amount of state tax withheld as if that's the amount of state tax we actually pay. But some of us get some of that money back in the form of a refund, meaning in effect that we took a deduction we didn't deserve. In order to "correct" for the amount we over-deducted, we clain the refund as income and pay tax on it the following year. Then we AGAIN deduct the current year's withholding - all of it - and start the cycle over.
I'm astonished that the person who does your taxes doesn't explain this to you. 23921. thoughtful - 4/10/2008 2:32:28 PM anomie, that's the way i understand it as well. We were in a situation with tax refunds for a couple of years and it took a couple of years to get it to all go away. 23922. judithathome - 4/10/2008 2:42:47 PM Spent an hour in our "terror room"...the laundry room...while tornado sirens went off all around us from 3 am until 4. We listened as the rain and hail and wind pelted the house.
I guess we survived okay. I read Keoni and Harley an article from the newspaper about the Pillsbury Bake-Off. Kept them all calm and relaxed. 23923. thoughtful - 4/10/2008 2:46:37 PM scary stuff...glad you're ok. 23924. anomie - 4/10/2008 3:04:32 PM Ms No, just to clarify: Yes, it is money earned in 2006, but you didn't pay tax on it in 2006. You deducted it. Therefore, your refunded amount is now taxable in 2007 (the year in which you receive it). The good news is that you don't need to pay a penalty for deducting too much in 2006. You simply claim the refunded amount as ordinary income in 2007. 23925. anomie - 4/10/2008 3:07:49 PM Judith, we don't have much extreme weather here in Vegas, but come to think of it, my little laundry/utility room would be the best shelter just in case. Thanks! I'll stash a flashlight and a book in there! 23926. arkymalarky - 4/10/2008 3:21:20 PM That stuff is hitting here now and Mose is on a bus full of school kids and won't be back until noon. Another group of kids is on a much longer trip--overnight--through horrible weather. Makes me a nervous wreck. I don't stress having to sit in the hall with a bunch of kids, but on the road withthem in bad weather is very scary.
I couldn't decide about Mazie, then decided she'd be safer outside. It's working out to be a hellatious storm season. 23927. Ms. No - 4/10/2008 5:13:56 PM Anomie,
Thanks, that does make sense, but now I'm a little disturbed about why my tax person didn't explain this. I mean, I probably wouldn't even have noticed had she not made such a big deal about it.
23928. anomie - 4/10/2008 7:30:57 PM Makes me wonder if something else was being questioned. 23929. thoughtful - 4/10/2008 9:19:00 PM Only thing I can think of is if she didn't itemize her deductions... 23930. wonkers2 - 4/10/2008 10:36:54 PM We've had good luck with TurboTax. Of course good records are the key to income tax preparation however you do it. 23931. judithathome - 4/11/2008 2:58:15 PM Learned yesterday that Leslie's company was going pay the ten grand for the hospital from an emergency fund...with no stipulation that it ever be paid back! It was such a relief...Leslie was prepared to withdraw money from his 401k and they said, no, hold on to that and use this.
So they called the hospital to see where to send it and the business office said never mind, we don't need it.
Can you believe that? 23932. thoughtful - 4/11/2008 4:03:31 PM Unfortunately i can.
A buddy went into the hospital and refused to pay his part of the bill until he received an itemized bill... the hospital accountant said, we won't release an itemized bill to you until you pay it! 23933. wonkers2 - 4/11/2008 5:20:52 PM Yes, I can believe it. Krugman on Health Care 23934. robertjayb - 4/11/2008 7:16:22 PM A thoughtful (pun intended) article on universal coverage in the New England Journal of Medicine...
Universal Coverage One Head at a Time — The Risks and Benefits of Individual Health Insurance Mandates
23935. wonkers2 - 4/11/2008 8:21:52 PM That was an interesting article. I wonder why the best approach would not be to extend Medicare in stages to the entire population over a ten year period, starting with the most vulnerable people first--children, the unemployed, the poor. As a participant in Medicare, I think it works quite well. Extending Medicare gradually would eventually rid the health care system of the health insurance company parasites.
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