Let's talk taxes....
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|Fri, 04-11-2003 - 1:22pm|
Here is the thing. I didn't work last year. Hubby is military, so that should make our taxes easy, right? WRONG. Hubby is also bringing in money from social security for disability, as are our children. The social security money isn't taxed unless your total family income is over $X (not sure what it is, but I don't think we are over it), and then only like half of it is taxed. But you do have to pay social security taxes on it (if that makes sense). THIS is why we are doing the CPA thing. All in all, it isn't that big of a deal though, even with hubby being a resident of a state other than the one in which we reside.
BUT...I worked out of my home last year. I was babysitting, as well as doing my cake decorating. All in all, I pulled in a VERY little amount of money, but according to the laws on taxes, I have to claim it. Well, if I'm going to claim it as income, I also get to do the home-based business deductions, which includes a portion of our lot rent (own the house, but rent the land), electric, gas, phone, cable, internet, etc. It includes a portion of my car insurance and home insurance. And I can claim the money I paid to have my yard mowed each week.
The problem is that I am having a moral issue with this. I chose to take less $$$ for my babysitting a friends children because they needed the help. I took only $100 a week for FOUR kids (that is $100 total, not per kid). So my deductions are WAY more than what my income was, meaning I will be entitled to a HUGE refund (if my thinking is right, and I will admit I'm not the best person when it comes to taxes, but I'm determined I'm going to learn, and I will by next year!).
So what do you do in a situation like this? Go ahead and claim all the deductions I am entitled to claim, and just let it offset the social security taxes on the SS income and then still have some extra left over as a refund? That just seems sooooo wrong to me.
So, how have you guys handled it when you were working out of your home (I know some here do). I'm soooo confused!