Thursday, September 25, 2008

Taxes, taxes, taxes...

Okay, so yesterday my husband was home. I was looking forward to spending the day with just him. The past few days my brother-in-law has been with us and I was feeling like a third wheel at times!

I asked my husband what he had planned for the day and he said, "We're taking care of our tax problem." Back in July we received a huge tax bill from the good old state of Pennsylvania...for earned income. It seems that PA has an earned income tax that is one percent of your total income for the year. Phil called the office when we received the bill and they suggested coming to the office to handle payment, which is difficult considering Phil's schedule.

Well, we never paid this tax...never knew anything about it...and neither did our accountant in NJ that we've used forever. I'm not talking about one year...we've been in PA for FIVE YEARS. The bill was a couple thousand dollars! Just think about the income that comes into your house yearly and figure out one percent of it, times five...that's quite a bit of money!

Phil collected all our taxes from the past five years and off we headed. I was not too happy about spending the morning in the tax office. Phil assured me we would be able to work out a payment plan and told me not to worry. I guess he forgot that "worry" can sometimes be my middle name.

The lady we worked with was wonderful. She was very understanding and realized this was an oversight. She started immediately going through our taxes for the past five years and noticed that Phil is on active duty. SOOOOOO...he only has to pay the one percent on a portion of his total earnings per year! And because he was in Iraq for part of 2006 and 2007, he's completely exempt those two years.

We were in the tax office for about an hour and we left paying just a couple hundred dollars, which included the one percent from my income also. Not too bad considering what we thought we originally owed. God is so good.

We then headed over to the Whitehall section of Allentown and had a delicious lunch at my new favorite restaurant...Panera Bread. We had a wonderful time sitting by the fireplace enjoying potato soup for me, French onion for Phil and a sandwich.

Don't worry...we're getting a new accountant this year!

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