Tax

Today I sorted out my tax. Tax in the US is rather different from the UK. When I started work, I had to estimate how much tax I should pay. I rather thought that they should know, but they didn't. I got points for having different things (like children) and then they suggested that I add a point or two, to be on the safe side - it's better to pay too much than too little.

Then, from January 1st, until April, you have to work out how much tax you actually owe, and either pay it, or get it back. It seems that almost everyone has to submit a tax return and do this. However, for most people, it's relatively straightforward. Unless you moved to the country last year, and have a wife and children with no social security number, and then it's not straightforward. So I needed help.

There are computer programs you can get, which do it all online. S and the boys needed a taxpayer identification number. The computer programs (I tried 2) won't let you do anything without a taxpayer identification number (TPIN). (Well, actually, they'll let you do everything except press submit.) You get a TPIN by sending in a form, with your tax return. But you can't complete your tax return without at TPIN. I decided I needed professional help.

Given that everyone has to do a tax return, there are a vast number of people who'd like to help you. The cheapest seems to be called H & R Block. T, who I work with, said that they employ people from January to April who work as cleaners the rest of the year, but that they were still liable if they get it wrong. Conveniently, they set up desks in department stores, for the tax season, so this morning I trotted off to Sears, to do my tax.

The woman (who might have worked as a cleaner the rest of the time) was slightly flummoxed by the fact that I had arrived. At one point she downloaded the UK-US tax treaty document and started to read it. It wasn't as long as I thought it would be, but it was still 55 pages long. Together we decided it wasn't relevant. (She was quite good at pressing ctrl-F and searching for sensible words, to find the bit that meant that we didn't need to read the rest.) The computer also crashed at one point, but it seemed to have an auto-save feature.

We started at 10:40, and at 11:40, S had to go and get the boys from German school, and then come back to sign forms. We finally finished at 12:40. There are all kinds of things that are tax deductible that we didn't know about. Just for having a long distance phone line, for example, we got $60 (or so) of tax back. Anytime you give anything to charity - be it money or goods, you can get a receipt, and claim back the tax. This includes stuff like going to the zoo - because the zoo is a charity, or giving a box of tat to a charity shop.

We didn't have any of that, but we will next year. (If we don't lose the receipts.)

We also had to send off official copies of our passports, so we need to get them copied and notarized. (There is a thing on the web page at work that says where you can get a notary from. I never understood what it was, even after I looked it up on Wikipedia, but now I know.) Two hours later, and $220 lighter, we had our forms to post off. (They don't do that for you). But $220 seems like a bargain, as our UK accountant charges £75 to fill in a form - even if the form says "What is your name?"

Anyway, it turns out that the taxman (or tax men - you pay federal and state tax) owe us about $3800 - this is for the 4 months we have been here, and means that we paid $1000/month too much tax. Which seems like a lot to me. But it's better than me owing it to them.