My Planning Failed

Remember how organized I was, back when we got new windows in our house? I carefully read up on how to calculate the deduction, and checked to make sure that I got it all right.

Apparently not. I just estimated our 2009 taxes, mostly so I could see if I could be lazy and not track down random small receipts and such. Usually every penny counts, but with my husband in a combat zone for the entire year, our taxable income is small. Small enough that it might not matter how much we gave to charity or how much we spent on child care. And what do you know – I was right. After you subtract six exemptions and the standard deduction, our total taxable income looks like it might be 0. As in ZERO. Sounds great, huh?

Okay, so I keep on looking down the form and I’ll need to add in self-employment tax, but we’ll get the additional child tax credit. And I keep looking, but there is no place to put the energy efficiency tax credit. So I hop on the internet and discover that the credit is in the “non-refundable” part of the tax. Non-refundable means that because we don’t have any tax to pay (besides self-employment tax, which comes later), we can’t get the deduction.

I don’t have a problem with non-refundable taxes. I have a problem with my failure to plan properly. I made the conscious (and I thought educated) decision to put these windows in 2009. In fact, I think that I even looked into refundability. Regardless, there’s $1500 of tax deduction that could have been put off until 2010.

If I were a little more limber, I would kick myself.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.