I started working on our tax return today. I've been dreading it.
Figuring the American Opportunity Tax credit correctly is always a chore for some reason. I only felt it was a chore last year when I realized both schools report differently on the 1098T. You would think there would be clear requirements. One includes books bought at the school book store and the other doesn't is one example.
Only the youngest qualifies for the AOTC this year, and I'm still waiting on her to get the 1098T from the community college she took summer classes with.
The oldest daughter will need to actually file her own tax return this year due to having a job, and selling her mutual fund this year. I'm going to work on it for her initially, but will try to walk her through it at some point so she knows a little about what to do going forward.
My husband said to me the other day, how did you learn how to do taxes? I learned from my dad! And then, of course, learned how to read up on the regulations as they change for our situation as we went along. His dad was a tax accountant and always did my husband's taxes for him. And for a couple years, he did our taxes as well. But he died in 2002, so I was back to doing our own taxes. My husband said he would have no idea what to do if he had to file his own taxes.
I recently remembered having an argument with his dad on the phone when he exchanged our oldest daughter's mutual fund to a new investment. I was only made aware when the statement came in the mail. I did not like him making decisions for me! He explained why and then I did my research after to confirm he made a good choice. And that is the fund I stayed with up until our daughter sold it this summer.
So far we are expecting a refund, and it will probably be a little less than last year since we have to use the less valuable Lifetime Learning Credit for our oldest daughter's tuition.
Have you started your taxes? Do you do your own or do you pay someone else to complete them for you?
Started Tax Return
February 4th, 2020 at 10:39 pm
February 5th, 2020 at 01:25 am 1580865930
I also will be using the American Opportunity Credit for the last time for DS2. He'll need to file taxes himself too for his summer job - he's gotten the W2 but hasn't been home from college since it arrived.
February 5th, 2020 at 01:37 am 1580866623
I took the lifetime learning credit, which wasn't much, but helpful. Plus we got the tax savers credit, and I had put part of my IRA money into the traditional, so that also padded our refund. I plan on waiting until the end of February to make sure there isn't any other paperwork coming to actually file though.
We should be getting approximately $1400 back. 33% will go to the bridge fund (two gap years between DH retiring and collecting SS); 33% will go to several anemic household funds; and 34% will be divided between our fun money accounts.
I actually hadn't realized how much I'd put in traditional vs Roth this past year until today. My plan is to start converting when I'm 55 because by then hopefully I'll have what I need for retirement and won't need to continue to make contributions. (Right now my traditional is about 2x my ROTH.) DH only has a ROTH since he really wouldn't have much room to do converting (plus a much shorter time table to retirement - 6 1/2 years!)
February 5th, 2020 at 07:34 pm 1580931256