The Three Circles of Tax Hell
I've always been a do-it-yourself kind of person. I figure, why pay somebody else to do something that I'm perfectly capable of doing myself? Part of it is that I like having control over what I'm doing, and being aware of the whole process. (I even make my own return-address labels, using my printer's own graphics language.) So I do my own taxes, rather than paying somebody to do it for me. Not only that, I don't even use tax software, partly for the same reasons I don't use an accountant, and partly because none of it runs on Linux.
I started my taxes a 8:30 last night. I took the results to the post office at 1am. Every year I realize sometime around the end of February that I (supposedly) have all the information I need to start on my taxes -- "maybe I could get it done early this year!" -- and every year I wait until almost the deadline to get it done. I've often been among those lining up at the post office in the last hours before midnight on April 15 (and one year I resorted to filing an extension), so this year I was actually early.
But getting to that point required descending through The Three Circles of Tax Hell.....
First we have Federal Tax Hell. If you're especially virtuous you can sail through here in the EZ balloon, but investment, self-employment, and many other transgressions will cause you to fall from grace into the Big Form. The Big Form itself doesn't appear too imposing, though its instruction manual does -- especially when it's revealed that you need to dig up additional instruction books for those transgressions that caused your fall from EZ grace.
The first of the horrors we notice in Federal Tax Hell is that the IRS assumes you don't know algebra, a perfectly reasonable assumption about the general public, but a frustrating assumption for somebody who does know algebra. This means we must go through ten lines or so of adding, subtracting, and occasionally multiplying, just to get a result we could have had in just two lines if they'd tell us the formula to use right off the bat.
Then we have the various schedules, worksheets, and supplemental forms. The main instructions reference these things as if we should just know what they are. So we desperately search out form 4223 because we're told to add in the results on line 69 of that form, only to find out that it is only relevant to ex-spouses of nerf-herders. Or we are told that nerf-herders and knitting nannys are to use form 4223-N instead of the form 4223 that the rest of us do. So we diligently go through the tedious algebra-less calculations on form 4223, then get to the end to be told that if we got the sort of result we got, we don't need to submit that form. You mean I did all that work and I don't even get to show the IRS that I did it?! Or if we're really lucky we're told up front that we only need to complete that form if more than 10% of our income is from selling things on eBay or whatever, we do the quick math to determine that yes this applies, then we are forced to spend two thirds of that form doing the line-by-line calculations only to get to the conclusion that yes, we really do fulfill the requirements for filling out the last third of this form.
And we can't forget the forward references and hidden variables -- enter this number here if you are entering a number 27 lines down, which in turn depends on a separate form. And to fill out that form you need an official constant (such as "37.5 cents per mile") that is hidden in a single place in the middle of a paragraph of the instructions. Or maybe we're allowed to deduct something, but we won't be calculating the amount of that until almost the end (or when we get to the Third Circle).
If you are unlucky enough to owe a penalty for not paying estimated tax (itself a demonic undercurrent running through all the circles of Tax Hell) on late-year self-employment income, you might start hoping for a bird to start pecking out your liver as you go through the tedious process of figuring out how much penalty you owe for each quarter.
After successfully navigating the first circle, we arrive in the second circle, State Tax Hell. This one makes us appreciate the pleasures of the first circle. Specifically, the state of Ohio likes to encourage the use of their telephone filing system, and they don't even send out the mail-in form. In this system instead of seeing how each number leads to the final result, we just get a black box (well, my phone is red, but you know what I mean) into which we feed some numbers, and which feeds us back some other numbers. The phone call takes forever (OK, half an hour), with no way to skip over the irrelevant parts. Ultimately we don't even know whether we owe money or are getting a refund until the end of the call. After owing a large amount of money in the previous circle, this can cause some serious fear. With the self-calculated mail-in form, we can see what's coming, maybe go back, re-read, and fix things that turn out to cause obviously wrong results, but with the phone the only way to go back over it is to sit through the entire phone call again.
And then there are the unspeakable horrors of the "Use Tax". The less said about that, the better.
So we've made it through two circles of Hell, and come out relatively unscathed. This isn't so bad, we think. All that's left is a single double-sided sheet of paper. But beware, that is the worst of them all, Local Tax Hell. The federal and state tax people, for all their flaws and tricks, really seem to try to make life easier for us, and are just hindered by their intrinsically demonic natures. But the local people, especially in the suburbs, just want to confuse us, trap us, and take anything they can get. So there are almost no instructions, no definitions, no specifics when referring to standard federal forms (e.g. "write the largest number from your W-2" instead of "write the number from box 1 of your W-2"), and in fact not many specifics at all. There are lots of instances of "etc." and "and others", making us wonder just what fits into those categories; then we realize they don't really want us to know, because that's how they try to make us respect their power instead of seeing them as lowly suburban employees. The only way to survive with sanity intact is to recognize their tactics and avoid giving in to them.
Finally, just when you thought you had defeated them, the locals of the Third Circle reveal their final twist: the prefolded form they provide doesn't quite fit into the envelope they provide without refolding the form.
Evil, I tell you. Evil.
I started my taxes a 8:30 last night. I took the results to the post office at 1am. Every year I realize sometime around the end of February that I (supposedly) have all the information I need to start on my taxes -- "maybe I could get it done early this year!" -- and every year I wait until almost the deadline to get it done. I've often been among those lining up at the post office in the last hours before midnight on April 15 (and one year I resorted to filing an extension), so this year I was actually early.
But getting to that point required descending through The Three Circles of Tax Hell.....
First we have Federal Tax Hell. If you're especially virtuous you can sail through here in the EZ balloon, but investment, self-employment, and many other transgressions will cause you to fall from grace into the Big Form. The Big Form itself doesn't appear too imposing, though its instruction manual does -- especially when it's revealed that you need to dig up additional instruction books for those transgressions that caused your fall from EZ grace.
The first of the horrors we notice in Federal Tax Hell is that the IRS assumes you don't know algebra, a perfectly reasonable assumption about the general public, but a frustrating assumption for somebody who does know algebra. This means we must go through ten lines or so of adding, subtracting, and occasionally multiplying, just to get a result we could have had in just two lines if they'd tell us the formula to use right off the bat.
Then we have the various schedules, worksheets, and supplemental forms. The main instructions reference these things as if we should just know what they are. So we desperately search out form 4223 because we're told to add in the results on line 69 of that form, only to find out that it is only relevant to ex-spouses of nerf-herders. Or we are told that nerf-herders and knitting nannys are to use form 4223-N instead of the form 4223 that the rest of us do. So we diligently go through the tedious algebra-less calculations on form 4223, then get to the end to be told that if we got the sort of result we got, we don't need to submit that form. You mean I did all that work and I don't even get to show the IRS that I did it?! Or if we're really lucky we're told up front that we only need to complete that form if more than 10% of our income is from selling things on eBay or whatever, we do the quick math to determine that yes this applies, then we are forced to spend two thirds of that form doing the line-by-line calculations only to get to the conclusion that yes, we really do fulfill the requirements for filling out the last third of this form.
And we can't forget the forward references and hidden variables -- enter this number here if you are entering a number 27 lines down, which in turn depends on a separate form. And to fill out that form you need an official constant (such as "37.5 cents per mile") that is hidden in a single place in the middle of a paragraph of the instructions. Or maybe we're allowed to deduct something, but we won't be calculating the amount of that until almost the end (or when we get to the Third Circle).
If you are unlucky enough to owe a penalty for not paying estimated tax (itself a demonic undercurrent running through all the circles of Tax Hell) on late-year self-employment income, you might start hoping for a bird to start pecking out your liver as you go through the tedious process of figuring out how much penalty you owe for each quarter.
After successfully navigating the first circle, we arrive in the second circle, State Tax Hell. This one makes us appreciate the pleasures of the first circle. Specifically, the state of Ohio likes to encourage the use of their telephone filing system, and they don't even send out the mail-in form. In this system instead of seeing how each number leads to the final result, we just get a black box (well, my phone is red, but you know what I mean) into which we feed some numbers, and which feeds us back some other numbers. The phone call takes forever (OK, half an hour), with no way to skip over the irrelevant parts. Ultimately we don't even know whether we owe money or are getting a refund until the end of the call. After owing a large amount of money in the previous circle, this can cause some serious fear. With the self-calculated mail-in form, we can see what's coming, maybe go back, re-read, and fix things that turn out to cause obviously wrong results, but with the phone the only way to go back over it is to sit through the entire phone call again.
And then there are the unspeakable horrors of the "Use Tax". The less said about that, the better.
So we've made it through two circles of Hell, and come out relatively unscathed. This isn't so bad, we think. All that's left is a single double-sided sheet of paper. But beware, that is the worst of them all, Local Tax Hell. The federal and state tax people, for all their flaws and tricks, really seem to try to make life easier for us, and are just hindered by their intrinsically demonic natures. But the local people, especially in the suburbs, just want to confuse us, trap us, and take anything they can get. So there are almost no instructions, no definitions, no specifics when referring to standard federal forms (e.g. "write the largest number from your W-2" instead of "write the number from box 1 of your W-2"), and in fact not many specifics at all. There are lots of instances of "etc." and "and others", making us wonder just what fits into those categories; then we realize they don't really want us to know, because that's how they try to make us respect their power instead of seeing them as lowly suburban employees. The only way to survive with sanity intact is to recognize their tactics and avoid giving in to them.
Finally, just when you thought you had defeated them, the locals of the Third Circle reveal their final twist: the prefolded form they provide doesn't quite fit into the envelope they provide without refolding the form.
Evil, I tell you. Evil.