March 27, 2008
Tax Time, Yay!!!!
This year, I decided to do my own taxes for a change, just to see how easy or complicated it might be.
Wow!
Tax accountants really have a good racket, though I won’t say that it’s an easy one — on the other hand, they do have the specialized knowledge that most of us non-accountants don’t. What we laymen (and lay-women) don’t have any particular training in is meat and drink to the accountant.
Now, I realize that lawyers and accountants in Congress bend over backwards to enact rules and regs that guarantee work for their colleagues and, once they return to the private sector, them by the simple expedient of complicating their respective fields to the point of requiring interpretation by said professionals, I also have to say that this practice is directly comparable to the steamy brown piles one encounters in your run-of-the-mill cow pasture.
The government already charges us for the privilege of earning money, why should we also be required to pay others to figure out how much we have to pay for the selfsame privilege of making a living?
So I get the 1099 from my brokers, listing all my trades on both the buy and sell sides (keeping in mind that I once worked back office on Wall Street, some 2-plus decades ago and learned to pluck liquidations from long lists, in actively complex accounts, of day trades, etc). I have a number of trades that involved averaging up from the original investments, that is, adding shares to already existing members of my portfolio because the original positions were notably bullish.
The problem is that the 1099 provides one list of buys and another of sells, and it’s left up to the client to match them up with the liquidations. Sure, this may sound like a no-brainer, but they don’t bother to include a breakdown of which added purchases belong to which positions, and the appropriate tax forms (1040, schedule D) demand only purchase and liquidation figures.
Do these extra 400 shares belong to this position, or that one? Do these 200 belong to this initial trade, or the other one in the same stock? Etc, etc…
I call my brokers, and they suggest that I ask my tax advisor. I call the IRS, and they give me what amounts to doubletalk — I say, “Look, I’m only interested in paying taxes on whatever profits I made on stocks in the course of 2007. I can present that figure to the dime.” They say, “You have to itemize each buy and sell, stock, dates and P&L.” and then get into the form numbers of the additional documents I’ll need to submit.
What a bunch of B.S.!!!!
Considering the hassle versus the volume of my trading, I don’t think I’ll ever buy stock again. If it’s absolutely necessary that I pay someone else to figure my taxes on same, then why should I? I already have to pay the government thousands of dollars in taxes, why should I also have to pay someone else to figure out how much I have to pay? Either they simplify the process, or stay at home!
Now, I have no objection (well, little objection) to paying taxes, since that seems to be a part of the scheme of things, but having the general issue complicated to the point of having to pay what amounts to an interpreter is beyond the pale! The 1099 includes the P&L for the year, yet the IRS requires that I itemize to detail what is already on the effin’ document (Line 1A) rather than submit the document {as someone who works for someone else would a W-2} with a single figure in a box.
My point is that if the a&&h@%%s want to collect taxes, they should take it upon themselves to make calculating the damn things a simple process for those who have to pay them, not a feat that requires a middleman (or woman) whose services require a secondary payment.
I can’t help but wonder what one of those folks dressed up as indians who participated in the Boston Tea Party would have thought of this…
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March 27th, 2008 at 8:53 am
[...] Carnival of Personal Finance wrote an interesting post today onHere’s a quick excerpt This year, I decided to do my own taxes for a change, just to see how easy or complicated it might be. Wow! Tax accountants really have a good racket, though I won’t say that it’s an easy one — on the other hand, they do have the specialized knowledge that most of us non-accountants don’t. What we laymen (and lay-women) don’t have any particular training in is meat and drink to the accountant. Now, I realize that lawyers and accountants in Congress bend over backwards to enact rules and reg [...]
March 27th, 2008 at 8:58 am
Come now Seth…the government actually making something simple and lacking confusion ? What were you thinking!!!! LOL
Once again a glowing endorsement for the need for the establishment of the Fair Tax. Then all of this stuff would be eliminated!
March 27th, 2008 at 9:41 am
Ken –
I’m really glad you made that comment — I just woke up (literally, sleeping in) with the very idea of doing a post (titled something like “commenting on my last post”, LOL) on just that: How practical and sane the fair tax, which I endorse wholeheartedly, would be! You saved me a major and time consuming rant…
Numerous and sundry thanks, from the bottom of my heart!
The fair tax concept makes so much sense (though I doubt that Henry Block and friends would go along with it — heh heh) that the gubmint couldn’t possibly conceive of it. The K.I.S.S. (Keep It Simple, Stupid!) principle evidently does not enter into the vocabulary of the general purpose bureaucrat, because it would deprive too many of those useless parasites of “gainful” employment.
I equate tax accountants with pilot fish…If it weren’t for the shark’s teeth that is our complex tax system, they wouldn’t be doing too well. Imagine making a living as a form of dental floss!
Even tax & spend liberals should agree on this: eliminating “form this” and “schedule that” would sure save a hell of a lot of trees!
March 27th, 2008 at 9:49 am
You are very welcome my friend !!!! You hit the nail on the head as to why the Fair Tax is meeting with moderate support and many obsticles. The very eleimination of the tax system as we know and hate it would not only eliminate a great number of over indulgent government jobs, but would also eliminate a Congressional power hord that those elected use as a means of keeing unlimited power at their disposal.
It will take a complete House cleaning of power hungry politicians to actually give the Fair Tax a snow balls chance of passing! As the Wicked Witch of the West said in the Wizard of Oz, “what a world, what a world!!!!”
March 27th, 2008 at 11:55 am
Ken –
I’ve long opined that our government needs an enema of sorts.
Until a scant few years ago, I was opposed to term limits, but that has changed. It’s the career politicians who cause the most problems.
What we need is politicians who are still relatively new, just entering the system from the private sector, who still retain their private sector sensibilities and concerns, who haven’t yet been absorbed by “the system”.
What we have is career politicians who belong to “the machine”.
While some of them may be assets to the American way of life, most are simply there to perpetuate their basically free ride. Campaigning takes precedence over national interests.
Unfortunately, such decisions as term limits are left in the hands of those politicians whose careers would be cut short by same.
Damn them all! (or at least, most of them)
March 27th, 2008 at 7:21 pm
I used to prepare my own tax return, but decided that I just can’t stand the hassle. I’d go into “tax mode” every March, and for at least two weeks, my poor students had to deal with a harridan in the classroom.
Not to mention the effect on MY blood pressure.
While I hate spending money to pay an accountant to prepare my return, my life is simpler and happier–and I have time to do things I enjoy doing, instead of paying the ransom to the government.
March 27th, 2008 at 9:07 pm
Complicated laws require experts who get paid to be experts.
That is why we should never send lawyers or accountants to Congress.
March 27th, 2008 at 11:18 pm
errrrr a $45 computer program will do all that for you!
March 28th, 2008 at 12:18 am
AOW –
I have been considering the same, but am first trying my hand at it myself. The only rough part is the stock transactions, everything else is more or less just inside the realm of understandability.
Shoprat –
Amen to that! It’s no surprise, given Reagan’s accurate description of politics as the world’s second oldest profession not being very different from the oldest, that these creatures would spend most of their time legislating more work for their colleagues and indeed for themselves once back in the private sector….at the expense of the people who elected them.
Jeff –
I hadn’t thought of that.
However, not being the sharpest knife in the drawer where installing and using new hardware is concerned, I envision myself turning what should be a simple proceedure into a quagmire of catastrophic proportions.
March 29th, 2008 at 5:22 pm
Yea maybe so….. seeing how it would be a software install and nothing to do with hardware! Glad the on/off switch is labeled on your laptop!
March 29th, 2008 at 6:01 pm
Jeff –
LOL!
The on-off switch is the gizmo I most understand. Everything else is peck-&-pray.
April 9th, 2008 at 12:07 pm
[...] As Shoprat pointed out in a comment on one of my recent posts, this is a result of our electing lawyers (and in context, since the post was a rant about complicated tax laws, accountants) to Congress — they can always be counted upon to enact laws that generate profitable work for their colleagues, and for them as well, should they lose an election and have to go back to work in the private sector. [...]