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Saturday, January 26, 2008

My 2007 taxes are done!...

I got my W-2 delivered on Thursday and it only took about an hour using the on-line version of TurboTax. I have filed on-line this way for about seven years, but this year was particularly easy for a variety of reasons.

First, 2007 was the first year that we were in Prague for the entire calendar year - we moved here in August of 2006. The 2006 taxes were more complicated because of the time split between Minnesota and Prague. But 2007 was easy.

Because we were overseas for all of 2007 there was no state tax to file - we are not residents of any state. That cut the paperwork by almost half (although state taxes are generally less involved than federal).

The biggest reason for the time saving, though, was that I used the standard deduction. Without a house (which we sold last February) there is not much to itemize, so it was cost effective - and much quicker - to use the standard deduction of $10,700. A lot of time is saved when you don't have to pull together donation receipts and look up how much you spent on your car tabs.

Because we are expats working overseas there is a foreign income exclusion. That means that when I calculate my gross income I then get to subtract the amount of the foreign income exclusion. For 2007 that exclusion is $85,700. That doesn't leave a lot left - and then you take away the standard deduction.

Anyway, I don't think I have been done this quickly with taxes since, well, when I was still in school. This will, of course, all change whenever we move back but for now I'm lovin' it.

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