Taxes, Part Deux! Or, they don't even understand it.

I don’t know, but i have filed tax returns in the UK, Canada, and Australia in the past, and none of them were anywhere near as complicated as the US system.

For someone who earns income in the US, i actually have a very simple tax return. But it’s still more complicated than any other one i’ve encountered.

I agree that the tax system is a huge mess, full of stupid-nonsensical language and huge roaring loopholes. On the brighter side, since I did my taxes online last year using TurboTax, the IRS did not bother to send me a 1040 packet this year, thereby saving a tree or two. Took me about an hour to do them online this year and file them electronically. In the end, Turbo Tax will tell you on a summary sheet what your overall tax percentage is. Mine was about 11%. I guess that is a pretty good deal for the perks of living in the USA.

Duffer, if it makes you feel any better, the actual percentage difference between the two is actually much smaller, because you need to also take into account the total monies you owed in taxes, not just the amount you were under-withheld. :wink: Somehow, I don’t think that helped.

Sorry to hear about your frustrations–personally, I played fast & loose with my deductions this year, and I’m just waiting for the jack-booted thugs from the IRS to knock down my door any time now.

Well, I tried to do a quick thumbnail account, but five rather longish paragraphs later it still wasn’t finished and my blood pressure was rising. Let’s just say that H&R Block screwed up the taxes on a simple retirement fund rollover with mind-boggling incompetence. Imagine how you’d feel if you trustingly went to a quack doctor to have a wooden splinter removed from your pinky, and he amputated your right arm. That’s how I feel about this mess.

(shrug) In every year but one, I filed the 1040EZ with no problems, spending less then 10 minutes a year figuring out what I owed or didn’t owe. But the one year I do a retirement fund rollover and try to deduct some medical expenses–aaaargh!!! And I STILL can’t make any sense of the regulation the IRS cited which supposedly proved that I owed them a shitload of money.

Just out of curiosity, did you happen to compare the two forms to find the discrepancy? I’m not challenging the thrust of the OP, but I would think it would be interesting to know where the $46 came from. Did one outfit take or disallow an odd deduction? Did the human at H&R Block mis-key something on the calculator? (Did you mis-key a number on Turbo-Tax?) Aside from the various deductions for fuel (which I have never taken because even when I drove a diesel the instructions were simply gibberish), I don’t think my taxes even could be calculated differently.

A friend of mine gave me, as a gift, mind you, a copy of the H & R Block Tax Cut software. He gave it to me AFTER I went to a CPA to have my taxes done, so I haven’t bothered to install it. Based on what I’m hearing in this thread, maybe it isn’t worth installing—maybe I should buy Turbo Tax for next year?

As to changing the tax code, I don’t think it will ever happen—rather, it will be changed, just not in any way that simplifies it.

The Constitutional amendment I’d like to see would require all members of Congress to do their own taxes. At a time of their choosing between January 31 and April 15, lock 'em each in isolation cells and don’t let 'em out until they produce a return to file with the IRS. While they’re in there, they get food and drink, forms, instructions, scratch paper, a calculator, and all the bits and pieces of paper they need to document their income, deductions, etc. But no tax software, no outside help, just them and all the materials one would need to do a complete return.

Bet the tax code would get a lot simpler.

Total agreement - call the IRS for help with a question that isn’t exactly trivial, but not obscure either and you’ll get some different answers depending on who you talk to. Ergo, they don’t understand it themselves, which was a point already made in this thread.

I’ll also pit the folks that think because something is tax deductible, it’s essentially free and so they can just go splurge on it.

Sorry, LonesomePolecat, I didn’t mean to make you hypertensive. Relax. Have a homebrew.

They cut off your arm? Those bastards! :mad:

I have heard that H&R Schlock is to accountants what Hostess cupcakes are to fine European pastries. Your recommendation is the final nail in the coffin.

It HAS happened within our lifetimes - back in 1986, to be exact. And nobody thought it would happen then, either, so it could happen again.

The problem is, since then the complexity of the code has returned with a vengeance. I’ll let you figure out who’s monkeyed most with the tax code since then.

Damn - that’s a great idea!
I keep thinking 2 thoughts:

  1. there is no reason it should NEED to be this complicated, and
  2. I just can’t imagine what benefit derives from it being so complicated (other than the one suggested above, that there is a loophole - however minor - for everyone.)

Thanks. :slight_smile:

I can think of a couple of benefits from the level of complexity of the tax code, if you’re coming at it from a certain angle:

  1. The complexity of the tax code conceals who benefits from the tax structure defined by that code. (Did you know that dividends and capital gains are exempt from the Alternative Minimum Tax, which is theoretically supposed to ensure that rich people pay taxes at the same rate as the rest of us? Now you do.)
  2. The complexity of the tax code is, in and of itself, least problematic for those in the economic strata that they think nothing of paying a professional tax accountant (as opposed to an H&R Blockhead seasonal worker, or TurboTax/TaxCut/TaxAct) to do their taxes. All they care about is the bottom line, and (unlike the rest of us) for them, the cost of paying a pro affects the bottom line only trivially.
  3. The complexity of the tax code can be regarded as a device to get people to hate our tax system generally.

Yup. Called last year with a question about the dandy new law allowing you to choose to deduct sales or income taxes. NH has neither one, so I wanted to know if I could deduct sales taxes paid to other localities.

I called the IRS, and was told, “That’s a good question!” Was put on hold multiple times as they reread the actual code, found it did not answer the question, then called around to their coworkers to ask about it. Finally, they said, “We can’t figure out why not, so I guess you can go for it.” That was a biiiiig reassurance. :rolleyes: Next time y’all write tax code, could you try to think about all 50 states? I know 50 is a big number…

I wouldn’t dream of doing my taxes without the software! We do use Tax Cut, and from what I understand, it is virtually indistinguishable from Turbo Tax.

The problem with going to H&R Blockhead and getting your taxes done is that you are getting someone who works on it maybe 1/3rd of a year, and once tax season is over goes back to mowing lawns or cleaning pools.

Back when I was a regular subscriber, Money Magazine had a yearly feature–perhaps they still do it–where they drew up a fictional family with a financial profile that had a moderate number of complicated issues, like IRA conversions, some mileage expenses, a home office, etc. I don’t remember specifics, but as I recall it was nothing a tax preparer woudn’t have run across before.

Then the magazine hired a number of CPAs and tax preparers to prepare the returns. They reported on the results.

IIRC, the bottom line was rarely the same. Sometimes preparers made large errors, others made small ones. Some of the differences weren’t errors at all, but reflected different methodologies for handling certain deductions (some of which are more or less advantageous to the taxpayer).

usar_jag is right about checking your math… or else you really only paid 287.50 in total taxes, (46% is 16% of 287.50) in which case IMO you’ve got little reason to pit the IRS or the tax code, my lucky friend.

Reader’s Digest did something similar over a decade ago. If memory serves, they sent the same tax information for a hypothetical family to four different IRS offices and got four different figures ranging from the family owing money to the family getting money back. I think there may have been a few hundred dollars difference.

While I realize it’s a bit late, I found this site, ESmart Tax to be very good and easy to work with. It’s on the IRS’s list of electronic tax file firms, and they even let you pay electronically. It’s actually even somewhat intuitive, or at least as intuitive as taxes can get.

Sure, but don’t they use TaxCut? After all, it’s marketed by H&R Block. And, as someone who used TaxCut and is now hearing horror stories about H&R…well, it’s starting to make me nervous.

-Joe

Eve, shmeve. There should be a box at the check in station to drop off your forms and check* just before casting your ballot.

*The obfuscation mechanism known as “withholding” should be aboilished forthwith.

Specify “bread and water” (or an equally bland substitute for the gluten-intolerant", and I’m with you completely.