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A taxing time - Woodshop News

A taxing time

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I did my taxes the other day, and nothing makes me happier. Sort of.

As April nears, I’ve been dreading starting up Turbo Tax to figure out what the damage was for 2010. I’ve mentioned here earlier that 2010 was a crummy year for me – no secret, really, as I probably don’t need to tell you how the economy has affected us all – and my income for the year was considerably lower than in previous years.

The year was bad enough, in fact, that I had trouble making a few estimated tax payments. I’ve learned that that Uncle Sam doesn’t really care if you miss estimated payments: They know where you live, and they’re happy to bill you later. But with the tax stuff up on the computer screen this past weekend and resigned to get this stuff done, I wasn’t eager to see how much I was going to owe.

Now, the previous year, 2009, wasn’t quite so bad. When doing the taxes last year I had nice refunds from both the Feds and the state. Instead of getting checks, though, I wisely clicked the button that told them to apply the refunds to my 2010 taxes. I’m glad I did.

What ended up happening was that taking my lower 2010 income into account, plus a far improved system of tracking expenses for proper deductions, those refunds ended up covering my owed taxes for the year almost exactly. I was stunned, but working through the taxes twice I came up to the same numbers.

I can hardly say I’m glad for the lower income in 2010, but everything combined in such a way that the Hamler household dodged a big federal bullet last year tax-wise. Was I lucky? Man, I’d hate to call any of that “luck.”

But it did help us get over a bad economic time. And as I’ve written here several times in the last couple months, things are picking up. If these indications hold steady, it looks like 2011 is going to be a much better year. That means I’ll have to be a lot more careful about those estimated taxes, of course, but as you small business people reading this know, that’s the cost of having a strong business.

And, with luck (defined differently in 2011 than in 2010, of course) business will be strong this year for all of us.

Till next time,

A.J.

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