I have probably mentioned that taxes are like stacking cord wood… You can always make either perfect. And I’ve been working on both in spades.
Since 2013 I’ve been doing my parent’s/mom’s tax returns. The hook is that I started that year with catching up four years of my parent’s returns. Dad always took care of that task, and in the last years of his life he simply wasn’t able to, nor was he able to communicate this to my mom. For 39-years, both personally and professionally, I’ve done taxes, across multiple states and industries (Yes, Virginia, the insurance industry has its own tax system!!). Call me odd, but I find the process soothing and reassuring. It all lines up. You may not like the answer at the end of your 1040, but if you’ve done it right, it’s right. The answer is solid.
I started on the four returns I have to do/prep for 2020 in January: Ours, my partnership, mom’s and mom’s estate. I was unsure if I could do mom’s final return until our CPA told me I had what it took… Love that guy. He will do the estate return, and I will finish the draft on our return tomorrow. Our’s and mom’s returns are interwoven in that we’re splitting the rental biz on the Island property: Her return will claim income until her death, and we will claim income after. (This has been sanctioned by our CPA) There are expenses that could flow from her to us and vise a versa… So I have to do our return first, then hers, and see where thing shake out. I’m 1000% sure that even with her pension and rental income, I’ll be able to write it all off given business, and huge medical expenses. I expect to see a 100% refund for her, and for the withholding I set up for the estate. I let our CPA know that I wanted him to take a look at both returns before we filed them. I appreciate his confidence in me, and need his reassurance for 2020.
I’ve conjoined my and my mom’s paper files. This has suddenly, with tax season upon me, created a crisis of confidence. What worked when the filing systems were separate isn’t working when trying to blend them, and I haven’t spent enough time working up an ideal system. For me, all bank statement files should be together. All of them. For 2020, the banking files were split due to mom’s death… But then I needed to reconcile each bank statement with each paper receipt (plus my credit card account), then in two files… Pre and post-death. When you’re deep in hardware store, utility, service, and other material receipts, after what 2020 tossed at us in general, well, it was an unanticipated struggle. I’m over it now, but confess to having a moment this morning.