Tax Time: Why So Complicated?

Posted on April 1, 2013

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Tax preparation shouldn’t be a choice between paying a “professional” or losing a couple of days of your life every April.

Most people grouse about the high cost of taxes (and how the government spends the taxpayer’s hard-earned dollars).  Another big gripe, though, is how complicated they are.

“Just use some software,” was the helpful advice.  Except that the software costs money, and didn’t even cover one of the little tax oddities we had one year recently:  one of Hubby’s stock companies had merged, and he was paid partly in dividends and partly in stocks.  You can bet the IRS had regulations and forms to cover this, easily found on their website.  The software – not so much!  Unless, of course, you wanted to pay twice as much to buy yet another program, the super-duper-got-it-all-for-the-professionals version.

“Just take it to a professional,” came some more helpful advice.  Oh, sure, for even more money than the super-duper software program.  After all, now a “professional” is using the just-for-professionals program on your behalf.

Well, Lila and math don’t get along, but Lila is cheap, so…  let the wild-goose-chase scavenger hunt begin!  Over the course of two or three days of deciphering what we needed in the first place, and then obtaining the right forms and publications, and then filling them all out several different ways, Lila got to know the IRS web site very well.  Was it really better to go joint, or file separately?  Figure the taxes both ways.  Was it better to itemize, or to take the standard deduction?  Figure the taxes both ways.  In the end, Lila had the answers and was actually starting to grasp how the numbers were working (a truly frightening phenomenon, if you ever saw Lila in grade-school math class).

So, every year, Lila is the Tax Person in this house.  “You’re better at it,” says Hubby, though I suspect he is just suckering me into another two days of wrestling with math and government forms, two of my least favorite things in the world.

But you know what?  I do them on paper, and I mail them in via snail-mail.  It is my little protest, you see, for a couple of reasons.

First, there’s something wrong when a country’s tax code is so complicated and painful that most of its citizens throw up their hands in exasperation and pay someone else to figure it all out.  If you are going to require citizens to pay money to the government, it should at least be simple.  We pay enough in taxes, don’t we?  We shouldn’t have to pay again to figure out how much to pay!  On that principle alone, I will muscle through this every year.

Second, check out the IRS web page on e-filing options.  Free File can do all the hard work for free, but only if you make less than $57,000 per year.  If you make more than that, you can use free fillable forms which are really not much different from using the paper ones, but not all forms are included, so you might have to use paper anyway.  And not only that, your tax filing goes through a third-party contractor and I’m not comfortable with that.  So much for the “free” options.  The other two options are:  pay to use commercial software, or pay to use a professional tax preparer.

Doesn’t this just seem like a racket?  Basically the IRS is telling us that if you make $57,000 per year, you should pay for tax preparation.  If they ever actually simplified the tax code, whole empires of tax-software producers and tax preparers would fall.

The only option that offers all the forms and publications you need for free – well, almost – is to just download them from the IRS website, reference the publications on your computer screen, print the forms you need, and then do the stubby-pencil exercise and mail it all off.

Well, at least if I am ever audited, I’ll know how I got my numbers.

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