Tax Time

By now, I'm guessing that probably 99% or so of the people reading this (I'm referring to Americans) have filed their 2006 income taxes a long time ago. I'm sure you either got out the pocketbook to write a big old fat check to the government, or if you received a refund, it probably has long been spent.

Well, S and I don't fall into either one of these groups. We haven't filed our 2006 taxes yet. Our company hires a well known tax company to take care of this for us. Yippee, I don't have to worry about this headache anymore...right? Wrong! It's even worse.

Now being that we moved to China in September last year, we didn't live in China enough days in 2006 to have to file a tax return with them. Since we didn't sell our house until 2007, our 2006 taxes should for the most part be similar to our 2005 taxes. Of course, you have to factor in our income is higher because of the "bonus" money we get for living overseas (but I'm no longer working, so it should be offset some). Plus, certain other items that are paid to us are taxable, but they are grossed up, so that ultimately in the end our taxes supposedly won't be affected. Or, so I understand. I honestly don't know. I was a Finance major in college, but this degree didn't involve me taking any tax classes.

Anyway, back to our taxes. Way back when all normal U.S. citizens were making sure to meet the April 15 tax deadline, our company was filing an extension on us. They automatically do this for all employees living overseas. However, we have to go online to a website and fill out a bunch of information. For example, we have to document every day of the year to reflect which country S is in on each day and what he is doing in that country (working, vacation, holiday). This is a big pain in the behind, especially when you don't do it for months at a time.

Beyond this, we have to go through and enter all of our tax information on to this website...basically I did the exact same thing as I have done previous years with H&R Block online...the only difference is that in those years, my taxes were done when I completely everything. Not so with this...I got done entering everything, and that was all I heard for months...no clue if we owed money or if we were getting a refund.

Now when we moved last year, we were told to submit copies of our 2004 and 2005 tax returns to our company. We actually didn't find this out until after all of our stuff had been boxed up. Then our shipment didn't arrive to Beijing until about 2 weeks before we were going back to Illinois for the holidays, and the last thing I was worried about was copying tax returns. So, I didn't actually get around to doing this until I think the end of January of this year. Then at the end of April, I did the stuff on the website, and when we were back in Illinois in May, I faxed some tax forms and mailed some tax paperwork to the tax company.

Great! I'm all done...now I just have to sit and wait until the tax company decides to get around to our taxes. As I'm pretty sure that our taxes are cut and dry easy, I figured that we would hear back on them around June/July time frame. As a precaution, I e-mailed the tax company at the end of May asking them if they had all of the documents they needed as we were moving from China to India and all of our stuff would be in shipment for a few months. I receive an e-mail back that they have everything they needed to do our taxes.

So, we don't hear anything at all on our taxes for a couple of months. Then at the end of July, S receives an e-mail that they need copies of our 2005 taxes. He sends them an e-mail back to check our file that this has already been sent in, and that at the end of May, it was verified that you had everything you needed. Well we don't hear anymore on this, so we're assuming that everything is OK.

Well, just last week, I ask S if he has heard anything on our taxes. Almost on cue, he receives an e-mail that they need copies of our 2005 taxes before they can proceed with our 2006 taxes. Ugh, talk about frustrating. We just went through this 2 months ago and had asked them to check our records for the paperwork. If the paperwork hadn't beeen found, why did they wait another 2 months to tell us?

Now, I'm not very happy about this. Sometime between the end of May (when they verified they had everything) until the end of July, our confidential tax paperwork has been lost. I'm ranting and raving about the whole situation while this time I scan all of our 2005 taxes and e-mail them off to the tax company (no longer copying anything). S isn't very happy either. How come it is taking months between communications with this provider?

Anyway, come to find out, I had copied our records for '04 and '05 and sent these to our company as requested. This is completely different than sending them to the tax company. Of course, no one bothered to tell us that both places needed the records. I had just remembered that I had done the copies...I hadn't remembered who I had sent them to until I went back and checked my records. I never dreamt that our company and the tax company who our company hired wouldn't be sharing information.

So, finally our taxes are done. Something that normally I would have taken a couple of hours to do in February has now been drug out to October. At least, we are getting a refund. You can't even imagine how mad I would have been after all of this if they would have told me I owed money!

We have already verified that we don't have to do anything with China for 2007 taxes (we didn't live there enough days). So, I can cross them off of my list. All I have to worry about for next year is the U.S. and India. Of course, I have already found out that because India taxes don't go on a calendar year as the U.S. does, there is a whole separate set of paperwork that has to be processed...in other words, we will have to do some of the same stuff twice...i.e. the calendar of where S is every day of the year.

Fun, fun...I can hardly wait. Now, I remember why I wasn't an accountant.