Tax Day, 2019: One's Own Experience

H&R Block:  overall tax liability is down 24.9%.
Just goes to show that one shouldn't generalize
from one's own experience.

After three consecutive years of simplifying our financial life--and being able to file our tax returns by April 15th--we had to go on extension last year because we received a late Form K-1 from a pass-through entity. This year we received the K-1 in March and didn't have an excuse for tardiness.

However, the changes from the Tax Cuts and Jobs Act affected us more than we originally estimated; the State and Local Tax limitation (SALT) hurt, while the Qualified Business Income (QBI) deduction helped. What also "hurt" was a large capital gain from a long-time mutual fund investment; sure it's nice that the gain was there in the first place, but the funds have always been reinvested automatically and the increased basis will benefit us only when the fund is sold. Thus occurred one of the banes of the tax world: a transaction that produces taxable income but not the cash to pay the taxes.

Deciding to take a couple of extra months to pore over the records, we completed the extension forms (Federal 4868 and California 3519), wrote two checks that left a mark, and dropped the envelopes in the mail. We'll mail the final returns in June.

I would fire my accountant, but when I gaze in the mirror he looks so pitiful that I can't bring myself to do it.