Sabot L'ours (sabotlours) wrote,
Sabot L'ours

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I Don't Need No "People"

Ahhhh. It's that special time of year again. When a young man's thoughts turn to romance taxes. I really despise those H&R Block ads which stress that you don't have to worry about taxes because if you hire them, "you got people." I think they're targeting the African-American audience. Most of the actors are black and they are stressing that you can get a loan based on your expected tax refund. The only problem is that the interest on the loan is some incredible amount like in the 18-20% range or even higher.

Me, I'm a glutton for punishment. I do my taxes by myself with good old paper and pencil. I tried tax software once in the mid 90's when I thought there would be a big deal with moving expenses. It turned out that the form was very easy and I didn't really need the extra help. The one nice thing was that this was before the heyday of teh interaweb. It used to be a bitch to get obscure forms. Now everything is available online.

I thought this year was going to be a pain in the ass. I sold some stock last year which meant capital gains. I had used that form (1040 Schedule D) in the past, so it wasn't that big of a deal. There was also the issue of dividends which I learned about last year. It's one of George W's "tax breaks for the rich." Dividends from stocks are taxed at a lower rate than normal interest. I'll give the Republicans kudos for that one. What was going to kick my ass was a bunch of money that I inherited from my father. He had made me beneficiary of part of his retirement plan. It sat there for 3 years, and finally the company gave me a lump sum payout. They took some taxes out of the payment. This pissed me off since this was supposed to be an inheritance. If my dad would have left me a check in that amount, I would not have to worry about taxes (unless the check was for a million dollars.) Since the plan was something like a 401K, there were taxes involved even if it was a death benefit.

Fine. What forms do I need? I struggled through the IRS website looking for something that dealt with pensions and/or IRA's. The few documents I found were written in perfect legalese. "You need to fill in line A unless you filled in line 13b on form 1337 and you were born after March 13, 1955, then you must first stand on your head and recite the alphabet while drinking a glass of red wine."

I thought about just including the whole amount of the payment as income. A quick check of the tax tables showed me that I would owe a few more thousand dollars. Eeep! I thought about blowing it off completely since the gov't already got a share of it. But what if they had taken out too much? I want my money, bitch!

You see, that's the basic premise of doing taxes. The gov't already takes out its share from your paycheck. Most of the time it's more than enough to cover what you owe. If you don't fill out your 1040, then they really don't care all that much, although you still might end up in jail. They already have your money. If you owe them, however, they'll certainly come after you and spank you with all sorts of fees and penalties. That's why I was afraid to blow it off. I might owe more on that money and they would come after me. It's that risk of "not having people." If the tax preparers screw up, they pay the penalties. I like to think of taxes as a very high risk math test. If you make a mistake, you don't get a bad grade, you have to PAY!

Finally after much searching I ran across an obscure little form, Form 4972 "Tax on Lump Sum Distributions." I went through it line by line and filled in everything that was asked. When all was said and done it turned out that the amount the company had deducted was only slightly more than what I actually had to pay. Whoot! So the end of the story is that I got my taxes done yesterday while I stayed at home due to the snow. I'm confident in my numbers and am pleased that I have once again taken on the IRS Monster by myself and have emerged victorious. I'm also getting a nice little refund which should pay for travel to AC.
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