Day Old’s Guide to Taxes, 2005

It’s that time of year again: all your W-2s have come in the mail and they’re sitting on your coffee table, taunting you, reminding you that the two months until tax day will be over sooner than you think. When will you have the time? Should you pay someone to do them? Where the hell are all those receipts? Let’s face it, there’s only one thing that motivates any of us to do our taxes, and that’s the prospect of a refund (or, you know, arrest). Well, as someone who is getting a big fatty refund this year, I’m here to give you some tried and true tips to make sure the government owes YOU this year!

1) Get laid off from a job that lured you in with a much higher salary than you’re used to. That way, the tax withheld from your paycheck will be based on an income that you end up not coming close to making. If possible, time your layoff for six months into the calendar year for maximum benefit.

2) After paying off your credit cards, use the rest of your divorce settlement to buy a tiny fixer-upper condo in an “up and coming” neighborhood. Mortgage interest is a really awesome write-off. Be aware that you will have to take out a second mortgage on all of your equity to turn the house into a livable environment, and the process will be soul crushing and take three times longer than planned. Just keep your eye on the prize. NOTE: MAKE SURE TO GET THE MORTGAGE APPROVED BEFORE YOU GET LAID OFF.

3) Start graduate school, preferably at a private institution with a tuition of at least $24,000 plus fees. Find one that bills you for both semesters before the end of the calendar year. Our government wants you to learn, and they’ll help you out by letting you write off the tuition, and also by giving you low-interest loans to pay the tuition. Then later, you can write off the interest you pay on the loans. MORE DEBT = LESS TAXES. Note: this does not work with credit card debt.

4) Spend the 8-15 day waiting period before you get your refund to plan how you will spend it. Give only perfunctory thought to “paying off debt”. It would only make a teeny tiny dent anyway.

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4 Comments

  1. I drafted our taxes a few weeks ago and I have to say, I was pretty disappointed by the lack of impact that our mortgage interest had. It still wasn’t even close to being worthwhile to itemize our deductions. I’ve been grinning and bearing the property taxes in anticipation of some huge windfall on income taxes, and so this isn’t much fun at all.

  2. Well, you only bought the house like in the fall, right? Next year, w/12 months of interest, it will be better.

  3. I wholeheartedly agree that only a perfunctory thought should be given to “paying off debt.” That way we can splurge on things like groceries, electricity, and the mortgage.

  4. Megan

     /  February 16, 2006

    I think the best part of getting paid less than $1000 a year is that my taxes take 15 minutes to do. It’s seriously just drawing zeros all the way down the page.

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