by admin | April 21, 2017 8:22 am
Tax Day recently passed. I beat the deadline by a couple weeks. That is because I had money coming back. If I had owed Uncle Sam additional taxes, our return would have gone in on April 18. No sense giving the government part of our hard-earned dough any sooner than necessary. One news story says one-third of taxpayers — 50 million — file on the last day.
Except for a couple of years back in the late 1970s — when I didn’t know better and paid someone to do returns that were laughably simple to fill out — I have always filled out my own returns. Over the years, the tax code has gotten increasingly complex. Every April, somebody writes a story that the tax code is nearly 75,000 pages long. We read and click our tongues. That’s crazy.
Except it is not true. The actual tax codes is somewhere around 4,000 pages long, according to my research. But attached to the code are associated court cases, previous versions of the code and other resources for tax attorneys and accountants. Of course, 4,000 pages are bad enough. I am barely halfway through reading it.
Kidding.
While the tax code is ridiculously long, tax software has made it much easier to fill out a return, even if you are self-employed, as I am. That means I have to keep a mileage log and hold on to all my business receipts, gather up 1099 forms from the different entities that pay me to write stories, write grants, or to broker newspaper sales. By the end of the year, the file is bulging and then must be sorted into the different categories.
I waited for a rainy spring weekend to dive into the file, cranked up Sturgill Simpson on Spotify and began tallying up receipts into categories, adding up the mileage on more than 40 pages of the log, and totaling the different categories. About four hours later, I was ready to open the software program, which guides you step-by-step through the process.
Our financial situation is not overly complex, but there is no way I would attempt this without the software. By the time I finished there were forms for dividend statements, interest statements, capital gains, sales of capital assets, royalties, self-employment tax, education credit, gains and losses from Section 1256 contracts and straddles, and an alternative minimum depreciation report.
I know what most of these items are, and they stem from the myriad forms we receive every year from our retirement accounts. My job is to input the information accurately and let the software do the rest of the work. I am not intimidated by numbers and briefly considered pursuing a degree in accounting (that lasted about 30 seconds). For nearly four decades, I have created budgets and deciphered profit and loss statements. I just have to trust the software isn’t going to get me in hot water with the Big Uncle.
Talk of reforming the tax code is again on the table. That is going to be difficult to achieve, since all the deductions and tax credits have their own fan base. That is why they are in the code in the first place. For example, there is a periodic cry to eliminate the mortgage interest deduction. I steadfastly oppose that suggestion because I get to use it. I would owe a few thousand more in taxes without that deduction, and like most folks I believe the government gets enough of my money.
It took a total of nine hours to finish the return. Before I electronically transmitted it to the IRS, I printed out a copy just in case my computer blows up, and the hard-drive backup fails. Including worksheets, it totaled 60 pages. That’s a hefty return, but ours pales in comparison to folks who own complex businesses.
Tax preparers likely do not have to worry about their profession going the way of typewriter repair folks. And I figure the mortgage interest deduction is here to stay. After all, folks serving in Congress in general would prefer to keep their jobs, at least until they have earned their pension.
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