February 10th, 2005

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Taxes Part 3

OK. I will hopefully soon STFU on the subject. But I had a wonderful breakthrough last night. I owe a big *HUG* to kaysho who made a simple comment on my last post which opened up the curtains and let the light shine in.

He commented that he thought capital gains were now taxed at a lower rate (thank you, Shrubya). I had searched the forms but saw nothing that would reduce the rate. And then I found THE WORKSHEET! In the 1040 instructions there is a worksheet that you fill out to determine tax on "qualified dividends." I had no idea WTF a qualified dividend was. It turned out that ALL of my dividends were qualified. This was yet another change to the tax code that Shrubya had made. There was a whole list of exceptions, but none applied to me. Buried in that worksheet is a place to put long-term capital gains. Woohoo! I carefully read and re-read every step and entered all of the numbers. When I plopped the end result back into my 1040, Lo and behold! The amount I owed disappeared! Not only that, but I was now getting a small refund! Holy Chit, Batman!

So I will go back through the numbers with a fine-tooth comb to make sure I didn't miss anything. It's exciting as hell when the little light goes on and you understand something. I don't understand the tax code at all! But I know how to get through it on my own and figure things out correctly and accurately.
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    accomplished accomplished