Credit Score and Taxes
NAME: Z
STATUS: Taxed.
GOAL: Refinancing our home.
PEEVE: Paperwork.
GLEE: Shrinking piles of paperwork.
Did I mention I once liked numbers and math?
I must be on a roll, because numbers are so not liking me. Our application to refinance the house was denied, even though we don’t have too much debt. Neglecting to file our federal tax return for 2009 probably didn’t help.
Did You know?There are at least 480 different tax forms, each with many pages of instructions. Even the easiest form, the 1040E has 33 pages in instructions, and all in fine print. source
The IRS sends out 8 billion pages of forms and instructions each year. Laid end to end, they would stretch 28 times around the earth. source
Bill Fair and Earl Isaac founded the Fair Isaac Corporation in 1956 and introduced the Fair Isaac FICO score in 1981. FICO scores are calculated by a software program developed by Fair Isaac. source
Turns out we had too many open credit card accounts, dating mostly to a few years ago when Sheri, my daughter, was graduating from college. We cosigned several accounts so she’d have leeway paying her bills and, for a spell, she had a serious shopping habit. Her new apartment looked awesome but her checking account was a nightmare. With Sheri’s whiny help, the balances were paid off but we never closed the accounts, so our credit score took a dive. Banks are much pickier these days.
As for the taxes, we have no excuse. Before we got married, Clay and I each had a smaller home and we converted them into rentals, which adds to the mountain that piles alongside our computer. We do use an accountant but have not managed to create a system that keeps receipts and other rental-related documents in order. Honestly, I’d rather scrub the toilet or fish decomposing food out of the fridge than tackle paperwork.
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When the re-fi application asked for our 2009 and 2008 returns, I provided 2008 and 2007. The bank noticed. The IRS doesn’t miss much, either. The late penalty each year could pay for a long weekend in the Smokies.
This will be the year. We will not only get caught up but also file on time. We will refinance our home to take advantage of lower rates and save money over time. I’ve created a spreadsheet for 2011 rental income and expenses and I’ve started putting the 2010 tax statements in one place as they arrive. Honestly. One place. In an orange folder. So I can find it. Really.
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