In preparation for the upcoming 2011 filing season, I've been examining which stories and tax tips from this past tax season can simply be tweaked (primarily number/inflation changes) and which ones will need to be totally rewritten.
Right now, the answer is "I don't know," since we're all waiting for Congress to return and deal with tax legislation — the expiring Bush tax cuts, stimulus tax breaks, tax extenders — in a lame-duck session.
As I was discussing this with a colleague, she uttered words (OK, e-mailed them) that I'm sure have passed all our lips (or keyboards) at one time or another: "OMG! Taxes are so ridiculously complicated. Why can't they just set this stuff in stone a year in advance???"
Because. That's the only answer I've got. Because.
Everyone is confused: My friend isn't a tax specialist, but even if she had tax training, her tax frustration would likely remain. Some folks who do know more than the average taxpayer about the Internal Revenue Code also often need help when it comes to filing.
And that brings me to a section in Joel Stein's latest column for Time magazine, Why $1,700 Means Joel Stein is Rich.
"My total income for 2009 was $288,115, placing me among the richest 2% of Americans," writes Stein. "What happens to my taxes will affect the future of this nation, unlike what happens to your taxes, which will affect only you and whatever the equivalent of Whole Foods is where you do your shopping."
And being rich (or not, as Stein later discovers) presents tax challenges. Stein wanted to hire an assistant, so the columnist consulted Mike Foster, a tax lawyer at Venable LLP, to learn about an employer's tax responsibilities.
Stein learned much more:
After hearing the specifics of my tax returns, Foster informed me that I am not rich. The debate is over people who report more than $250,000 after deductions, and I had only $182,532 in taxable income, thanks to my giant mortgage and high income and property taxes. Which is outrageous, since the $288,115 I claimed to have made already didn't include all the income Steinacopia (Steinacopia, Inc., the business entity he set up) deducted as expenses through the very legitimate dinners and trips Steinacopia took me on. Even more confusing, my income was high enough that I had to pay the alternative minimum tax, which makes the Bush tax cut irrelevant. Or something like that. Foster wasn't sure. "I don't even do my tax returns anymore," he said. "I don't know any tax lawyer who does their own tax returns. The forms are Greek even to us."
Foster's comments bear repeating: "I don't even do my tax returns anymore. I don't know any tax lawyer who does their own tax returns. The forms are Greek even to us."
Depending on what the House and Senate do or don't do after Nov. 2 about up-in-the-air tax measures, we taxpayers might need an advanced Greek course.
Related posts:
- Democrat vs. Republican tax cut graphics
- Obama advisers say 'yes' to all tax cuts
- Taxes, wealth and relativity
- Tax cuts, or hikes, for all
- No votes on tax cuts until November
- OMG! What will happen to my tax bill
if the Bush tax cuts expire!?! - Expiring tax cuts might just do that
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John
Thanks for writing the article. Interesting!
Michigan Mortgage Company