Income tax return done: income up, gifts up, tax not

joyfulguyMay 4, 2006

In addition to doing income tax preparation for low-income people for several years, organized by the income tax dept., I've been preparing returns for a couple of friends for several years and last year the lady began a new business, house rental.

She has somewhat limited accounting skills and told me this year that the paper that I gave her last year detailing how to arrange the payments was too small, to which I said that I had meant it as a guide as she set up her account book.

I brought their returns home, as I expected to visit the tax office, so could deliver their return without postage, telling them that I'd bill them later for postage if I had to mail them. I photocopied his charitable receipts, that we must file, in case of later dispute, supposing the originals might have disappeared.

I had quite a bit of photocopying of stockbroker reports plus about 30 charitable and political receipts of my own, so many that I feared that I couldn't get them all into the envelope - but made it.

I'd have had to pay about $2.00 postage, but was able to deliver it to the tax office.

Despite an unusual, temporary increase of 18% in taxable income over 2 years, I've been managing to reduce my tax load to around 10% in recent years: about 10.4% in 2002, 10.13% in 2003, 9.3% in 2004 and 8.7% in 2005.

Charitable contributions (mine are for health, social and community, educational and religious projects) above a minimum amount are deductible at a generous rate and our church carried out a building project mainly to make it more accessible this year, to which I contributed more than usual for two years - total up nearly double that of 2 years ago.

The interesting thing: my tax load for the past 3 years has varied within only a $25.00 amount - which was entirely unforeseen: I only realized it 10 min. ago.

You've heard my refrain: "Learning how money works - an interesting hobby ... that pays well".

Learning how tax works - also an interesting situation ... that can pay well, as well.

I hope that you're all enjoying an interesting spring.

ole (frugal) joyful

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liz_h

" She has somewhat limited accounting skills and told me this year that the paper that I gave her last year detailing how to arrange the payments was too small, to which I said that I had meant it as a guide as she set up her account book. "

I'm afraid I LOL at this one! Not that I haven't misunderstood some equally commonsense things at times. Of course common sense often depends heavily on knowledge, so if the knowledge isn't there, neither is the sense.

    Bookmark   May 21, 2006 at 11:27AM
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