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Thursday, April 15, 2010

Thank you President Obama for the tax cuts!

My family is usually one of the "working poor"... rarely having gross income anywhere near $20,000. We're farmers and, even though I have a part-time freelance job and a survivor's spouse pension (but no health insurance, but that's another horror story), it's always a struggle.

Spouse is IBEW but the union hall only calls him when there is a wide-spread disaster, like Hurricane Ike and ice storms. When he works, he makes great money, but he's working 16-18 hour days (sometimes seven days a week) in very dangerous conditions. He's been unemployed since February 2009...I miss the great income but I'm happy to have him back here on the farm doing the heavy work.

When I finally got around to doing the tax returns this time around, I was stunned at the amount of our federal tax refund. Mind you, spouse & I both file W-4s as "single", just to make sure that our combined small incomes cover everything.

So you can imagine the gobsmack reaction I had to The Tax Policy Center's report that said "About 45 percent of households will owe no federal income tax in 2010, according to our estimates."

But then I realized the operative word was "owe"...

We're getting a refund, so we didn't "owe" any federal income tax but we certainly did PAY federal income tax (as well as state income tax, payroll tax AND self-employment tax...then there's the pesky sales tax, real estate tax, Kentucky personal property tax on every single on of our vehicles EVERY year, and so on and so on...)

In any event, please visit The Tax Policy Center website to read 5 Myths About Your Taxes, it's very enlightening to read the entire thing in context (a phrase of which tea party peeps are stubbornly ignorant).

Back to the paying federal taxes thing...I highly recommend the website The Other 95%, whose slogan I paraphrased for this blog post. We, the "Other 95%" do indeed pay taxes and the tax cuts for our 2009 returns are a great relief.

We got an $800 tax credit on our federal return because we WORK! And, since we don't have enough perk expenses to itemize deductions, we got an addition to the standard deduction relative to what we paid in real estate taxes for our primary residence (which also happens to be a farm the raises fruit & vegetables).

We've been trying to pay off a huge credit card debt that resulted from spouse being desperately ill a few years ago (no insurance so we had to pay every bit of the doctors & hospital bills ourselves)...we used the large part of his brief IBEW work to pay down that debt. The federal refund we'll get will pay off the last of that debt and leave enough money over to replace the leaky metal roof on our more than 160-year-old house.

So THANK YOU President Obama! And I really REALLY mean that from the bottom of my heart.

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