“Oh crud, we need to do our taxes,” I recently told my husband as I do every year around this time.
After exhausting every reason to procrastinate – cleaning out the vegetable drawer, perusing old Hickory Farms catalogues left over from Christmas, clipping toenails, surfing E-bay for vintage bar signs, napping – we finally had to face the music.
Coffee and a folder haphazardly filled with paperwork in hand, my husband and I reluctantly plopped down in front of our computer to complete the dreaded annual tax forms.
We haven’t had the best luck preparing our tax forms over the years, and are conditioned to avoid the experience. Despite my law degree and my husband’s master’s degree in financial management, neither of us ever grasped the simple concepts relevant to our personal income tax forms.
In law school, I took a Tax Law course and could write a scholarly paper on whether the federal income tax is a direct tax or an excise tax based on the Sixteenth Amendment and the Supreme Court’s opinion in the Pollock case, but I struggled with my 1040EZ.
My husband’s master’s thesis was entitled “Congress, Defense, and the Deficit: An Analysis of the FY 1996 Budget Process in the 1O4th Congress,” but he couldn’t tell the difference between short and long term capital gains if his retirement depended on it.
But every year, we begrudgingly spread out our paperwork and somehow fulfill our obligations as taxpayers.
One year, we wanted to act like grown ups, so we hired an accountant while living in Virginia Beach. He was a charming southern gentleman with blue eyes, silver white hair and a matching tidy moustache. He called me “ma’am” and politely sat with us one balmy evening in the early days of spring. Over the season’s first lemonades, we casually chatted about our finances, and he gathered all the information he needed to prepare and file our returns. It was so easy, we wondered why we hadn’t been doing it this way all along.
The next year, we tried to contact our charming accountant to do our taxes again, but strangely, he never returned our calls.
We soon found out that he couldn’t call us back because he was locked up in the big house. Turns out, our southern gentleman was politely holding himself out as a CPA without a license, embezzling from clients, and obtaining money under false pretenses. Oops. Back to the drawing board.
Since then, we have been using Turbo Tax, a seemingly idiot-proof program which leads the user through a simplified series of questions designed to accurately calculate all income and deductions. Somehow, my husband and I still have no idea what is going on.
“Do we qualify for the child tax credit?” I asked, as my husband slurped his coffee. “Hell if I know . . . just do whatever we did last year, that seemed to work,” he said nonchalantly.
“I forget, do we have Roth IRAs or regular IRAs?” I said a few minutes later. Riffling through a pile of papers, my husband found our statements, which might as well have been written in Chinese. “Roth, but what the heck is a recharacterized contribution?”
My eyes started to cross as I tried to decipher our mutual fund papers. “Is cost basis the same as purchase price?” I said, searching my faded memory bank. “I don’t know, just punch in $200 and see what happens,” my husband suggested.
After four hours, two pots of coffee, three calls to our financial manager, and at least a dozen choice expletives, we finally got it all figured out and dutifully sent our forms off to Uncle Sam.
We won’t get our return check for several weeks, but rest assured, we’ve already spent it, and lost the receipt. When our bank statements arrive, we won’t know how to balance the checkbook. And next spring, we’ll be back in front of our computer, dazed and confused all over again. Apparently, a few more things in life are certain aside from death and taxes.