On tax day
[NOTE: This is an edited version of an essay of mine from the past.]
Today is tax day.
Ah, paying taxes. What fun! Along with close to 100% of Americans, I hate the process. It’s an attitude that unites us like almost nothing else. In recent years it’s even worse than usual, because the IRS has proven itself to be beneath contempt.
But to go back in time—tax day always reminds me of my father. He was both a lawyer and a certified public accountant, but it’s the latter profession that conjures up the April memories for me. He was not the Taxman (see video above) but the Taxmiddleman, the one who prepared tax forms, often of a very complex nature – and did it all by hand back in those pre-computer, pre-calculator, pre-Turbotax days. Actually, I suppose there were calculators back then – clunky mechanical ones, much like the calculator our neighbors had in their house to use for their business. But my father disdained and distrusted calculators, preferring to rely on his lightening-fast abilities with pencil and paper.
Every year starting around February – when my parents always went away to warmer climes for about ten days, in preparation for the long hard slog to come – until mid-April, my father would come home from work every night, eat dinner, and go immediately to a small table in our living room. There he’d set up shop until bedtime, which was around midnight or later, and then repeat the entire process the next day. Weekends it started earlier. No TV for him, and almost no relaxation, just this quiet sitting in a chair, bending over papers and fiddling with small figures.
For those months, we kids were instructed to tiptoe around in the evenings and not disturb him. This was a tense time. We could see it in his exhausted face and bloodshot eyes.
And so in our house tax day was a very happy day.
I’m, um…not an accountant…but I’ve always done my own taxes, even back pre-turbotax.
At times I’ve had complicated taxes…earning income in two states, running my own business, a rental property, kids and the weird deductions that can come from various stages of their lives. Nothing too bad, but could be confusing sometimes. Especially figuring out depreciation on rental property and business assets. Sheesh.
Luckily that stuff was long enough ago that it’s outside the audit window so I don’t have to lose sleep over whether I did them right or not any more.
Now that I’m older and my kids have kids, I’ve divested myself of the business and rental property so it’s just my wife and I, our home and our incomes to worry about, taxes have actually become quite simple over the past decade or so.
Of course in a few years when we have to start pulling from our retirement accounts, it may start getting complicated again…I guess we’ll see…but I’ll still probably do them myself.
BTW: This year I waited until today to file my tax return. For the first time in…for as long as I can remember…I actually owed money. I always try to cut it as close as possible…no reason to pay too much and give the government an interest free loan…but this time I cut it a little too close and let it go negative.
No reason to pay it any sooner than I really needed to, so I filed today. I already upped my withholding for this year so I should be at about the break-even point by December. So this tax day wasn’t really a happy one…I had to write a check (figuratively speaking).
My parents dedicated a weekend- which would sum up to an estimated 35-40+ person hours- to do their tax returns. Tax software these days takes a lot less time, making the expenditure on tax software well worth the expense.
One year my parents got called in for an audit. The IRS agent they dealt with was a former student of my father’s. My father had given him a C, but as it was a TOUGH course, he hadn’t done that badly.
The issue was that my father had included my mother’s expenses on a professional trip. When my parents informed the IRS agent of my mother’s professional qualifications (STEM Master’s & work experience), he agreed that she was quite well qualified to do what she had actually done- assist my father in his trip for professional reasons.
When I got email/call(s) from my IRA manager last December that I needed to make a withdrawal from my IRA, I ignored them. I assumed that as I had already made withdrawals for three previous years, I didn’t need to make any withdrawals for 2022. I found out recently that previous withdrawals or not, you HAVE to make annual withdrawals beginning the age you turn 72.
With assistance from my IRA manager, I made the withdrawals recently and hope that the IRS will waive the 50% excise tax. Mea maxima culpa…
My childhood memories of tax season are much less dramatic than Neo’s, but I do recall my mother preparing tax returns for our family, for the small business that employed her as a bookkeeper and office manager, and for her younger brother, my Uncle Joe. She had the basic skill set to be a CPA but had not gone to college, so she never sought licensing.
My mother took over the dining room table for the better part of the evening for about a week in late March. She used a 1950s-model Burroughs adding machine that was heavy enough to amputate your foot if you dropped it. I don’t recall that she was stressed by preparing tax returns, partly because she wasn’t doing them for a large number of people, and partly because the instructions for completing Form 1040 in the period from 1955 to 1965 amounted to a thin 16-page booklet. By the time I was old enough and earning enough to render unto Caesar, the Form 1040 instruction booklet had more than doubled, to 39 pages; by 2018, it was almost as thick as the local white pages telephone directory– 218 pages. I’m waiting for the Greenies to protest the number of American trees that are pulped each year to provide IRS materials for American taxpayers.
It’s worth posting the lyrics to “The Tax Man” song.
One, two, three, four
One, two (one, two, three, four!)
Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Yeah, I’m the taxman
Should five per cent appear too small?
Be thankful I don’t take it all
‘Cause I’m the taxman
Yeah, I’m the taxman
(If you drive a car, car)
I’ll tax the street
(If you try to sit, sit)
I’ll tax your seat
(If you get too cold, cold)
I’ll tax the heat
(If you take a walk, walk)
I’ll tax your feet
Taxman!
‘Cause I’m the taxman
Yeah, I’m the taxman
Don’t ask me what I want it for
(Ha, ha, Mr. Wilson)
If you don’t want to pay some more
(Ha, ha, Mr. Heath)
‘Cause I’m the taxman
Yeah, I’m the taxman
Now my advice for those who die
(Taxman!)
Declare the pennies on your eyes
(Taxman!)
‘Cause I’m the taxman
Yeah, I’m the taxman (yeah, I’m the taxman)
And you’re working for no one but me (taxman!)
Songwriters: George Harrison.
It wasn’t that long ago that the 1040 form did not have a “Schedule 1 ” and a ” Schedule 2″. The “Schedule C ” and ” SE” for buisiness has been around for a while, but they made the parent 1040 form longer with the numbered schedules.
When I lived in Manhattan, Tax Day was rather festive at the main post office. I used to always wait until the last minute to do my taxes. So, I’d run to the post office to mail it. At the Manhattan main post office (an absolutely gorgeous building), there’d be at least one TV news crew. And food trucks. One year, some company was handing out packets of aspirin. I saw people sitting on the steps finishing up this taxes. One year, a small musical group was performing.
Paying Higher Taxes Can Be Very Profitable:
https://chicagoboyz.net/archives/59624.html
David, Very nice article from 2010. Any company that aspires to become big and influential better have a presence in DC. Sad.
David,
Great article. I love the Irving Kristol quote about power being zero sum, but earning money is not.
All about coercion and force versus voluntary exchange benefitting both parties.
I imagine it must be interesting to read stuff you wrote many years ago to see how well it holds up. The throwaway comparison using NIH or CDC scientists with Pfizer was noteworthy. Of course, now we wonder if any of them (public of private) are/were actually doing any science at all.
—
also IIRC the CEO of GE (a successor of Jack Welch) once admitted around that time that the focus of the company had changed to working with govt because the profits were supposedly larger and more dependable.
Tommy Jay,
see Microsoft. Gates once ignored politics. The politicians of both parties punished him for it. IIRC it was Sen Hatch who had the most telling quote. Something about his having an obligation to get involved and fund the political process. Scary stuff.