My, How We've Grown!
- Thread starter Don
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I honestly wouldn't try filling out anything over a 1040EZ without an accountant or Turbo Tax because my math skills are so bad, I could tank an already fragile economy.
I know the question wasn't directed at me, but...
Foreign-sourced income is a more complex issue, to be sure. There would need to be research for that particular type of income in that particular country. There are tax treaties between countries, and they can be complicated as well.
Re: computing and filing tax returns by hand (no software), for many people, it wouldn't be easier no matter how simple it was. Wouldn't have been easy 40 years ago. Following directions and making computations by hand isn't easy for a lot of people.
Re: the 50-page tax return: just based on what you describe as your income/deductions it may very well be that you received a lot of "supplementary information" in the form of extra pages. There's the government copy (what the IRS receives) and then there's the client copy.
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I'm fine with the math, but feel less than confident I'd do the best things with regard to my investments, deductions, etc. I decided a few years back it was well worth paying an accountant. (I'm the pain in the ass client who insists on going over the thing and asking questions -- I am, after all, a lawyer.)
And I burrow through legalese all the time, so if I feel that way...
And I burrow through legalese all the time, so if I feel that way...
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Interesting. Makes me wonder what qualifications one needs to work for the IRS.
I'm guessing it's at least partly being understaffed. In one case, it was a decimal point error (but a big one). In another case, they apparently missed the cost basis of an investment I sold, thus reflecting a big profit I didn't actually make. In other words, they were careless mistakes rather than tax code mistakes. But I think a lot of people figure if the IRS comes at you saying you owe more money, they must be right. Yeah, not so much. They're human, they make mistakes, and right now, they're evidently way understaffed.
Processing tax returns is highly computerized and based on a "matching" system - e.g., your employer files a copy of all the W-2s, and the IRS matches the W-2 income you report on your tax return with what your employer filed.
Same with mortgage interest, same with dividends and interest, same with education credits, same with all those Important Tax Documents you receive in the mail.
With 1099-Bs (sales of stocks, bonds, etc) the IRS just recently started phasing in a program where brokers have to report basis, rather than just proceeds. For longer-held stocks, taxpayers still report their own basis, but for the most part, and eventually I guess, for all sales, it will be straight-up matching like everything else.
As far as the "human" element of the IRS, my opinion is that the people who answer the phone read from a script. Their auditors, however, are the real deal.
Same with mortgage interest, same with dividends and interest, same with education credits, same with all those Important Tax Documents you receive in the mail.
With 1099-Bs (sales of stocks, bonds, etc) the IRS just recently started phasing in a program where brokers have to report basis, rather than just proceeds. For longer-held stocks, taxpayers still report their own basis, but for the most part, and eventually I guess, for all sales, it will be straight-up matching like everything else.
As far as the "human" element of the IRS, my opinion is that the people who answer the phone read from a script. Their auditors, however, are the real deal.
I use Turbo Tax, and I feel like filing has become easier than ever. I don't even have to copy my investment income info (not that there's typically a lot to copy anyway) - I can download that directly from my account into Turbo Tax.
And yeah, most of those pages that printed out are worksheets and stuff that doesn't actually get filed. The actual return is only really a few pages.
And yeah, most of those pages that printed out are worksheets and stuff that doesn't actually get filed. The actual return is only really a few pages.
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I use Turbo Tax, too. And I agree, it is easy.
But it's easy because we're using a computer and software that wades through all the rules and requirements for us.
Imo, a great majority of the tax code should be done away with. All this deductions, allowances and the like, all these additional worksheets and schedules are needless. Taxes should be a simple thing. Everyone should be able to file their return based on a minimal amount of necessary information.
You know, when withholding was reestablished in 1943, part of the argument for it was that it would simplify things...
Could be...still over 30 pages titled "Form XXXX"
(My Canadian return - just for rental income/expense - is only 5 pages)
Here's your simplified tax form, rob.
Oh, and an important reminder for those who may still be procrastinating.
IMO, withholding had two important purposes. It helped smooth out income flow for the government, and it lulled people into intaxication, which is that giddy feeling you get when you realize you're getting a refund, just before you realize it was your money to begin with.
Oh, and an important reminder for those who may still be procrastinating.
IMO, withholding had two important purposes. It helped smooth out income flow for the government, and it lulled people into intaxication, which is that giddy feeling you get when you realize you're getting a refund, just before you realize it was your money to begin with.
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Amadan
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I don't find taxes that difficult. I use TurboTax to do my initial calculations, then work through them by hand (so that I don't have to pay TT a hundred bucks to do my filing 
).
But then, I play wargames with 40-page rulebooks. In a world where some people find "balancing a checkbook" to be a difficult process, anything more than a few lines of instruction is going to baffle people.
My mother is a retired IRS auditor. They do know their stuff (and no, they do not take pleasure in giving people a hard time - unless they know damn well that you're a lying liar who lies about your taxes).
The IRS has repeatedly begged Congress to simplify the tax code. If it were up to them, tax returns would be immensely easier (and the IRS would be immensely smaller). The reason taxes are so complicated is because Congress keeps adding things to it, and the IRS has to then implement and enforce every policy, exception, loophole, regulation, calculation, etc. that most Congresscritters probably do not actually understand themselves when they vote on it.
).But then, I play wargames with 40-page rulebooks. In a world where some people find "balancing a checkbook" to be a difficult process, anything more than a few lines of instruction is going to baffle people.
My mother is a retired IRS auditor. They do know their stuff (and no, they do not take pleasure in giving people a hard time - unless they know damn well that you're a lying liar who lies about your taxes).
The IRS has repeatedly begged Congress to simplify the tax code. If it were up to them, tax returns would be immensely easier (and the IRS would be immensely smaller). The reason taxes are so complicated is because Congress keeps adding things to it, and the IRS has to then implement and enforce every policy, exception, loophole, regulation, calculation, etc. that most Congresscritters probably do not actually understand themselves when they vote on it.