How could I have missed this?

I got a letter from the IRS today.

I know, right? My heart started pounded, just as you'd imagine.

All kinds of things floated through my mind. Were we being audited?

The letter said they noticed a mistake on our taxes that changed our refund amount. It offered a toll-free number and asked that I call them.

So I did. And they were very polite.

Turns out my husband got part of a credit through the VA and had claimed it again (our accountant is awesome, but not infallible) when we filed. The result was that our refund was $250 less.

I panicked. We already received our tax refund. Did I have to send a check?

Turns out they adjusted it prior to sending the refund and all is well.

Truth is I had simply noted the amount in our account had gone up about what I had expected it to. I was rushed that day. I didn't analyze it. Ugh! How could I miss that? $250!

Yay! It's here!

I checked our bank account and our tax refund is here! That's exciting news because it means I don't have to juggle April's funds to pay the lawyer a retainer on Monday. I can pay in full immediately.

Hooray!

Lawyer Conversations

On Friday I called the lawyer's office. His office assistant is also his wife. She's got over 20 years in the business and is extremely helpful in a motherly yet no-nonsense kind of way.

"I just wanted to let you know that our estimated tax refund is going to be April 13th."

"You know you can get started before you receive your refund, right?"

"No... how would that work?"

"You'd have to pay a small retainer and then we'd get you started on the paperwork."

I laughed. "How much is a small retainer?"

"A couple hundred dollars."

I laughed again. "Then we do have to wait until we get our refund."

"You realize you'll be filing near the end of May in that case? Unless it's an emergency."

"End of May? He told me about four weeks."

"Mid-April, about two weeks to file the paperwork, and about four weeks after that. Longer if you take longer to fill it out, less if you're more organized."

I thanked her. I didn't tell her I already have the paperwork filled out, at least as best I can without further guidance.

We're going to see if we can go ahead and give them a two hundred dollars with his next paycheck so that I can move forward with this.

Tax Refund Update

We mailed our taxes on (best-guessing since I don't have my calendar in front of me) the 23rd of February. Our CPA told us that as long as the IRS audits more people who file electronically versus those who mail, they will not recommend electronic returns. So, we mailed it. At the time he told us that it was one to two week difference in the time it takes to process and direct deposit our money.

Well... I called the toll-free number that the IRS has on their website (the online form was having technical difficulties and recommended calling directly). Our refund is going to come on or before April 13th.

Crap. That's about another month.

I really wanted to start saving money as soon as possible. Yes, we're catching up on things that we need, stockpiling food, paying things in advance when it makes sense (car insurance, for example), and getting some medical attention we had been putting off... but I want to see our savings account grow! I want to get this over with!

CPA Meeting

I met with our CPA on Monday. I was grateful that they had moved my appointment up by a few weeks; I needed to get our refund faster so that I can file bankruptcy.

He's worked for us since 2004 and I'm quite pleased with him. Because I used to have a corporation (not nearly as impressive as it sounds) all the possible deductions and such were overwhelming. We met him at the school during our business classes. A large part of his client list are massage therapists so he is aware of things specific to our business.

Last year we closed our business. Corporations offer some protection, but I didn't have enough business to justify all the extra fees. 2009 tax filing was partially to officially close our business at a federal level. (We'd already done so at the state level.) We also did our personal taxes.

I walked in and explained that I needed copies of our past tax returns. I have them, but they're in a box, stapled in nice little binders, and I didn't want to have to locate them, dissemble them, copy them at Kinkos, and then put them back together.

"Is this for a loan?"

"No. Um... it's for something with a lawyer."

"Something I need to know about?"

(Very meekly) "I'm thinking about filing CH7."

"You're not alone. You'd be surprised how many people I know in the same boat. How many years do you need?"

I know that the initial request will be for the previous three years and that the trustee can request previous years, so I asked for 2005 onward. He printed them up, stapled business and personal separately, paper clipped each year together, and handed me the stack. He was extremely supportive.

I had sent him an email confirming the amount that our return would cost this year. Apparently I worded it ambiguously and he misread it. He didn't realize we needed to do a final filing for the corporation this year. He was going to give me a deal by making our personal less since he had forgotten and charge the standard rate for the final return.

I bust into tears. I told him I had made sure in the email to ask. He felt bad and reassured me, told me he'd never bait and switch me, and that it was an honest mistake. He realized if he had looked further into his system it would have been clear what we needed to do this year and would have been better prepared. He took what he remembered for granted and didn't check into it.

He apologized some more and told me again he'd never do this on purpose. He told me he'd go ahead and eat the cost and just charge us for our personal return.

It feels SO AWFUL to be in a situation where an extra and unexpected $125 makes me panic and realize how close to broke we are. That's why I was crying. It was a horrible feeling.

I cried again when I found out we were getting more than we needed to file Chapter 7. My husband had about $1500 taken out over the year and we barely qualified for the earned income credit. I wasn't aware of several other credits this year and none of the online calculators I had used (probably because they were for calculating EIC) mentioned it.

Not only am I getting $1500 for the attorney, I'll have $299 for filing, and the additional funds for the before and after classes!

On top of that I'll have a couple hundred dollars extra. Not a lot, but enough to get my teeth cleaned, which I'd been putting off for awhile.

Another very important thing that I got out of this meeting was how we acknowledge my mom's presence. "Renting" is incorrect. First of all it's not a choice we'd make with the tax ramifications. Secondly, no lease of any kind exists. She is "gifting" us $500 a month. It still counts for the means test (and we still pass) but it doesn't make the sale of our home taxable, and since it's under $13,000 a year there aren't any tax penalties on the money.

Our CPA also told us that our bank (BOA) is particularly aggressive. Same thing I keep hearing from other people. I can't verbalize the weight off my shoulders it has been to know I'm no longer on my mom's account. And while I still have a huge to do list for transferring my bank account, it doesn't feel as hard as I had envisioned it.