Tax Time:  Why Do We Make Things So Complicated?

Tax Time:  Why Do We Make Things So Complicated?

The month of February is marked by many milestones – Groundhog Day, Mardi Gras, and for me it’s time for another annual chore that I loathe every year.

Tax time.

Yes, it’s time to sit down and figure out and file my federal and state income taxes.  I am one of the many folks who does their own (as well as the rest of my family’s), so at this time of year, I put out my shingle and start pestering folks for their W-2s, 1099s, and other assorted paperwork so I can sit down and figure out what we’re (hopefully) getting back, or, in the worst case scenario – how much we’re going to get soaked for in the coming weeks.

Doing your own taxes is not for the weak of heart, and there are more and more deductions and credits to worry about every year. (image credit – landmarktaxgroup.com)

Now, before you start thinking “hey, this guy is nuts for doing all of those family returns”, I must admit that I use tax preparation software (not to advertise, but the product I use rhymes with “Herbo Max”), and it does make the process as simple as it can be, with regards to all of the ins and outs one needs to know about withholdings, deductions, and credits.

Which brings me to my beef with the American tax system.  The Feds (and the state of Maryland, for that matter), know perfectly well what I owe (or what is owed to me).  Believe me, if I submit something wrong on a return, they are quick to send me an official letter pointing out my mistakes (as well as a penalty for the time and interest that they feel they’ve been cheated out of), so I just don’t understand this annual game we play together.

Every year, government agencies at both the federal and state levels basically say “I know what you owe, now you tell me what you think you owe, and I’ll tell you if you’re right or not.  Oh, by the way, if you guess wrong, I’m going to charge you even more.  Good luck, sailor!”

I just don’t get it.  As I’ve stated before, other countries send their citizens a simple postcard, stating what they have to pay (or the refund they can expect) regarding their taxes.  Easy-peasy.

So why do we still do it the “American” way?  Well, you remember that tax preparation software I spoke of previously? 

That’s why.

Those companies spend millions and millions every year lobbying Congress to keep the tax system just the way it is, so that they can reap billions and billions in profit by “helping” us navigate the U.S tax code (which is cumbersome, complicated, and fraught with opportunities to completely screw up on one’s own).  Its Capitalism at its finest.

Now, due to all of my family changes this year (daughters moving out on their own, no college deductions, etc.), I got the great news that I’m basically going to get gang-raped on my return this year at both the federal and state levels, so there are a few rather large checks I will be writing to both the U.S. Treasury and the MD State Comptroller’s Office.  The state even has the gall to ask when I think I’ll be paying, so they can see if I’ll owe them any more interest by the time they get my check.  I can just imagine Mr. Burns from “The Simpsons” sitting in an office, wringing his hands in gleeful anticipation.

Now if you’ll excuse me, I have to go figure out one of my daughter’s returns – who incidentally didn’t have any federal taxes taken out of her paycheck for the entire year.  Happy, happy – joy, joy.

Somewhere, Mr. Burns is muttering “excellent!”

2 thoughts on “Tax Time:  Why Do We Make Things So Complicated?

  1. As of this year, the IRS allows many people to file online for free for basic returns. I’m advising it for my kids. I guess there’s also the old fashioned paper forms.

  2. Years ago I did my own taxes. That lasted until I bought a house, had a mortgage, make an investment and earned interest, and had a son in college. I was still doing okay with doing them myself…until I sold the house. That’s when I threw up my hands and hired a CPA. Now all I have to do is make sure I keep records throughout the year and then take them to him and every year I get money back……it’s worth what I pay him to save myself from the frustration of trying to do them myself. I agree they know what I owe and what I’ve paid in….why make it so complicated.

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