When I had my taxes appointment last year, it was before everything shut down. It was one of the last things I did before the shutdown and it seems like that was a million years ago. And I didn’t think too much about my tax appointment this year until recently and wondered how it would happen. I forgot that a lot of people who did their taxes last year had to do them after the shutdown so there was already a good system in place for not doing them in person.
I wasn’t able to get as early of an appointment as I usually do, but it was because I wasn’t going to schedule it until I had all my tax forms from my jobs. I didn’t want to be someone who makes an appointment and then doesn’t have everything needed. But I still got an appointment on the earlier side so I didn’t have to stress about things happening at the last minute.
The way appointments worked this year was a pretty great system. You make your appointment, but it’s for a week and not a specific day and time. Then you have to have all your paperwork and forms to the office the Saturday before your week and then your preparer reaches out to schedule a time for a phone call to finalize things. And I was very grateful that they let me submit my paperwork and forms through email so I didn’t have to drive to the valley. I wouldn’t mind driving since I don’t drive much, but it was just much easier to do it all at home when I only had to drop off forms.
I was a bit worried about how my taxes would go this year. I knew my income was lower than it was before, so my estimated tax payments were higher than they probably needed to be. But I also got unemployment, and I know that gets taxed and a lot of people owed money after getting unemployment. I did select to have 10% deducted for my taxes each payment, but I knew that wasn’t enough to cover everything I would owe. And I had very few deductible business expenses over the past year, so I didn’t know how much that would affect what I owed too. But as always, I was trying to be hopeful about how it would all turn out and I knew that I’d be ok no matter what happened.
My phone call was the other day and it was really nice getting to talk to Daphne. I think we both missed having our fun chat in person like we normally do and we couldn’t do a lot of chatting on the phone, but it was so nice getting to talk to her. It was a much faster appointment than normal because almost everything was entered by Daphne before our call. Normally, I bring my paperwork with me to the appointment and she does everything in front of me. But this time, she only had a few questions and it turned out I was missing one form about my healthcare (which, fortunately, I was able to access online and send to her right away).
Because there was so little as far as income and deductions, it was a bit simpler than before and not as many things that we had to figure out. I thought having unemployment would make it harder, but obviously, Daphne is a pro at this and it really wasn’t a big deal and there were no weird things we had to figure out with my forms. This was much easier than times in the past when I was on unemployment, which was nice.
And in the end, I did much better than I expected with my taxes. I’m getting money back for both federal and state, which is not normally the case. I always owe on my state return, but this year the healthcare forms were different. So some of the overpaying I did for my healthcare covered what I owed for the state. So I’m getting refunds for both and my taxes for 2020 are basically complete. I’m just waiting on the refund to be direct deposited to me.
And I have things set up for 2021 as far as estimated payments go. But because my income was so low in 2020, my estimated payments are significantly lower than I’m used to. If I paid them at the rate they are listed at, I would likely owe money when doing my taxes next year. So I’m debating about paying more than what it has on the forms. Overpaying doesn’t result in a penalty like underpaying does, so that’s a good thing. And if that helps me not owe money in a year, it’s a good thing. I’d rather pay in installments ahead of time than owe a big amount at once. But I have some time to think about it before I have to make my first estimated payment for 2021.
But for now, I’m not too worried about my 2021 taxes. I’m just glad that I got my 2020 taxes done and they were so much better than I was expecting them to be. Now I can move beyond 2020 and not have to think about money worries that the year might have caused me.
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