Adventures in Taxation

I remember when doing my taxes was easy. Before I owned a house, I would just sit down with a pen and my W2 and fill in that little book they would give you. Life was uncomplicated and the taxes didn’t take that long.

It got harder after we bought a house and had to itemize our mortgage interest. Plus, in Delaware, last year’s refund is considered income so you have to report that. Plus, we have to file in two states. I tried to do my taxes myself and I just couldn’t. We started going to an accountant. It was particularly fun the year when we were considered married federally and in Delaware but not in Pennsylvania. They didn’t know what to do with us at first.

Forget doing our own taxes now. It took two hours to get them done the other night. I had to leave in the middle to go home and get some settlement documents for our new house. They were closing H&R Block when we were leaving.

As it turns out, owning a rental property is more complicated than I thought. There were all kinds of questions that I never thought of. I documented all the rental income and repair costs and everything else, but they still needed the value of the Elsmere house since the house has lost value (although the value is climbing from its nadir), so technically my rental income is a loss on paper.

I smiled and nodded. This is why we pay to have someone do all this. I think I’m good at managing money and debt but when it comes to writing off losses and mortgage points, I am a drooling idiot. I just know that the tenants pay me to live in the house and I pay the mortgage and taxes on it.

At least it’s done and we will get our refund early. We always file early just so we can get an answer, especially since this year there were so many questions. Wait til when we have a baby and they have to figure out the taxes for a couple who work in a different state than where they live, own a rental property and just adopted. They will pull down the shades and put out the “closed” sign when they see us coming.