It’s April 16th , finally. The income tax returns have been completed and filed and there is nothing more to do on that score until next year. Good thing because , by this time, most of us are sick of 1040s and W-2s and the rest. I am too. It’s not that I hate paying taxes; I don’t enjoy having to pay them but I realize they are necessary. What I dislike is how difficult and unnecessarily complicated the tax code is. TurboTax and other programs like it make it easier to do your returns but they mask the convoluted nature of the tax forms. Just read the steps to have to go through to complete some of the schedules and worksheets. Lots of subtract (Line 17) from (line 16) and multiply by 0.15. Add . Subtract. Multiply . Look up tables. Compare. And at the end of it all, you wind up with something that could have been done in a single operation, or two.
Why do taxes have to be so complicated? Sometimes , as I go through the forms, it seems like the accountants and bean counters are out to show the rest of us how smart they are. In their effort to address every situation that might arise, they have succeeded in making the tax forms a byzantine mess. And for all their efforts, the tax code is as unfair as ever. There are no loopholes to exploit for those of us who are employees; those are available only for the biggies with their armies of accountants and tax lawyers.
Tax preparation and advice is a big industry and this was brought home to me recently. I always do my own taxes but this year, after I had done a rough calculation, I decided to try the professionals. I went to the offices of a nationally known chain of tax preparers which advertises heavily. They tout their services as being both expert and affordable, and their ads give the impression that the cost is under a hundred dollars. Not true. When we met with one of their tax prepares, she took a look at my W-2s, IRA withdrawals and other documents and told me that I should be aware that my return would run several hundred dollars , possibly $600 or even $700. She couldn’t give me an exact figure or even a ball park figure because the computer could only be calculate the charges as the data was being fed in. Each form had a fixed charge and she couldn’t tell me how much it would all add up to. I had been prepared for a fee of two or three hundred dollars but $ 700 was too much. We thanked her for being up front with us and left.
Every now and then, we read about how the tax code is being simplified but all these efforts only lead to another layer of complexity. As for the flat tax advocates , they are pursuing a pipe dream. There are too many vested interests that would oppose any simplification. The CPAs and the tax lawyers , of course, but also others. Any attempt to eliminate the write-offs would be opposed by a number of different industries. For instance, the real estate industry would fight any attempt to do away with the mortgage interest exclusion. Religious organizations would strongly oppose the preferential treatment they get . And so on and so on.
No, I’m afraid we’re stuck with the present system. At least, there’s TurboTax to came filing easier and we don’t have to worry about until next year.