Friday, November 12, 2010

Mastering the Internal Revenue Code

Last night I finished a three month tax course in individual income tax; it was the best tax course I have taken in my decades of bean counting.  I received an overall grade of 97% of all possible points in the course.  Yes, I am ready for the tax season.  One thing I noticed while studying the nitty-gritty of tax rules for ordinary citizens:  the tax rules are ridiculously complex, serpentine, ambiguous and difficult.  There are a million rules and two million exceptions to those rules.  There is no way in hell that any normal, bright and educated citizen could possibly do his own taxes and get it right.

Still, I enjoyed the course.  It was a study in madness, and now I am in a position to (1) do tax returns and (2) write horror novels.

10 comments:

AmPowerBlog said...

Good job, Stogie. I hope the coming tax season is profitable for you.

Anonymous said...

Actually, my taxes are not all that hard. In as much as I am an evil Single-childless-renter, and our government has decided it is not worth the trouble to buy my votes by giving my demographic any deductions, preferring to give those vote-buying handouts to demographics that vote in higher percentages, my tax form is pretty much - "How much do you make? Divide by two and send it in."

Stogie said...

Thanks Donald!

Anonymous, but do you qualify for any of the education credits or the tuition and fees deduction? Have any casualty losses? Or buy a new car? Have an IRA (and take the related savers's credit?)

See there are tax breaks even for your demographic if you know about them and can navigate the forms and the rules.

Anonymous said...

education/tuition: not for a long time now.

casualty? nope, thank goodness

New car? The newer of my two cars is a '96.

IRA? Nada. But I do have a 401k, so I guess I'm getting a little break there, even if I don't appreciate it when I do my tax return since I'm not paying those taxes in the first place.

Still, don't Married Homeowners with Children get all those tax breaks also? (on top of the ones they get that I don't)

Got anything else for me?

Sorry if I sound like I'm trying to mooch free tax advice off you now. :)

Stogie said...

If you contribute to a 401k, you may qualify for the savings credit, but of course, it is phased out if you make too much money! If you make more than $26,500, you are out of luck! The government loves poor people and discriminates against the productive, but you knew that!

The Lifetime Learning credit or the tuition and fees deduction (you don't have to itemize to get it) may be available if you take college courses to upgrade your job skills. Are you paying off any college loans? If so, you can deduct interest on those loans as an adjustment to income, and you don't have to itemize to get that either.

Stogie

Anonymous said...

Sigh. I stupidly attended a relatively low cost State school and worked my way through college rather than assume a huge mountain of debt (or mooch off my folks). What could I have been thinking? Even worse, I majored in something that would allow me to earn a productive living (no Multicultural Studies majors here) so now I make too much money! Shame on me. Why didn't my High School guidance counselor tell me how well it pays to be a deadbeat?

So, let's see - I'm a Single, Childless Renter who is Productive and not in debt. No wonder the Government hates me!

On the other hand, every year when I finish my taxes, my nice friends at TurboTax send me a message that says "You pay three times the average tax of a taxpayer at your income level." - so at least I get the warm fuzzy feeling of having contributed my fair share to those wonderful shovel-ready projects. :) (plus two other peoples fair shares, apparently)

Stogie said...

Anon, my background is similar to yours; attended a state school, paid for it myself, no student loans. I do "own" a house, or rather the mortgage company does, but the economy wiped out any equity in it.

I have no doubt that a flat tax would be far more fair than the system we have now.

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Always On Watch said...

Stogie,
I love the last sentence of your post.

My mother was an IRS auditor many years ago; Mom passed in 1987. But along the way during the time we shared this earth, Mom taught me a lot about taxes and the tax code.

We all need to know more about today's tax code, I think.

Stogie said...

AOW, we should probably replace the tax code with something simpler. The level of complexity the tax code now entails is mind-boggling.