The tax man cometh; are you ready?
I called my aunt last night to see how she was doing. She just returned home after being hospitalized. She couldn’t talk too long—she was using a computer program to do her tax returns. I was surprised. Today is the deadline for filing your taxes or requesting an extension, and my wife and I have never waited until the last minute to file.
Still, my frustrations could serve as Exhibit A for why this country needs to simplify its tax code. We have several “nonqualified” investments—small stock/bond holdings that aren’t part an IRA or 401(k)—and thus we must report their earnings on our tax returns.
I’ve never tried to do my tax returns without help. Usually, I gather all the necessary material for our tax guy, a former work colleague, and he fills in the blanks and tells us what our return will be. I can’t ever remember owing money. We’ve always withheld enough money so we get some sort of return, and that largely determines how big a vacation we can take from one year to the next. (I know, some investment advisors argue that we’re only losing interest by letting the government “borrow” this extra money throughout the year—but with the paltry interest you can get from a bank these days, it makes no big difference.)
This year, things got even uglier than usual. We moved our investments early last year from one broker to another, meaning we got two sets of 1099s and then “corrected” statements. Only the “corrections” kept coming. Even after our tax guy had finished his work, we got corrections to the corrections.
I couldn’t have been more frustrated. The changes required changes in already-prepared forms, and our tax guy, obviously, needed more money.
Each year, when I’ve sent our tax guy the material, I’ve included a letter that I’ve dated. So I looked back at some of these letters. In 2005, I sent that letter Feb. 1. In 2007, it was dated Feb. 6. Last year, it was Feb. 26. This year, it was March 1.
Last year, if I recall correctly, our broker told us to wait until the end of February before filing to make sure we had any corrected information. Amid my frustrations this year, he told us to wait until the end of March.
Maybe we should just request an extension each year to reduce the frustrations, I responded. “In my book,” I told him by email, “it shouldn’t take three months to sort out end-of-year earnings.”
Greg Peck can be reached at (608) 755-8278 or firstname.lastname@example.org. Or follow him on Twitter or