Tuesday, March 3, 2015

Easy Income Tax Return

The key to easy tax return preparation is organization. If all the pertinent information is available in one place, totaling the figures is a snap. I recommend the grocery sack organization technique. In the course of the year, toss every receipt with any sort of connection to our tax return into a grocery sack. At the end of the year, all relevant receipts, and maybe a few that are not, are collected together for review.

One serious problem with the grocery sack storage system is trying to remember what receipt is for which deduction. Some cash register receipts printed on thermal imprint paper are prone to fading. Or worse yet, turning completely black if the bag has been set next to a heat source, such as a baseboard heat register. Worn out printer tapes on standard cash registers also create questionable and/or indecipherable figures. 
Labels may be needed

The solution to the above is obvious: jot a note on the back of the receipt, stating the amount and for what the receipt was given. This may seem a little time consuming, but if you begin labeling the receipts several days before actually working on the tax return, it helps to alleviate some of the tedium. (Smart tip: use several different pens, and vary your handwriting so it looks as if the notes were written over a period of several months. This helps keep your tax accountant's blood pressure down.)

It also might be wise to label the sack. I can imagine little that could be prove to be more irritating, not to mention embarrassing, than showing up at the tax guy's place with a bag of garbage instead of tax deduction receipts. 

“Okay, let's check this first receipt: four pounds rutabagas... hamburger... a loaf of bread? I can't believe this! What the hell is the deal here?”

“Ohmigosh! That’s a shopping list. I must have grabbed the trash sack.” 

“I know what it is, I meant the rutabagas. You actually eat those things?”

If your taxes involve anything other than the most basic of forms, it is imperative to start your tax preparation early. The IRS, like most bureaucratic operations, thrives on forms. They love forms. Long forms. Short forms. Complicated forms. Forms with little boxes for multiplication. Forms with little boxes for subtraction. Forms for begging forgiveness. Forms for admitting guilt. Forms to request the forms needed to request forms. 

In order to lay bare your most intimate financial information, you will undoubtedly at some time discover the need for a form not readily available. This means the form will have to be ordered directly from the IRS. In fact, the IRS is counting on this.  They even provide a toll-free number (1-800-TAX-FORM) to order the needed forms in each booklet of instructions. Reading the ordering instructions leaves one with the warm and fuzzy feeling that all will be right in the world, until the last line is read.

“You should receive your order or notification of its status within 7 to 15 days.” 

Notice of its STATUS? Fifteen WORKING DAYS? That means three full weeks in standard English.

Presenting the 1040SuperEZ

Of course, the IRS has been working fervently over the past few years to improve not only its image and efficiency, but also the ease in which income tax can be filed. To that end they have been focusing on simplified tax forms. It is not without some pride of accomplishment that I present to you, dear readers, a preview of the number one contender in the simplification process. My source within the IRS, who must remain anonymous for fear of an audit, tells me this new form is to be unveiled for use in next year’s taxes.