April 1, 2006

• The Joy of Tax

  Tax time was always a time when we had to tip-toe around my father. He is always in a foul mood around April 15th.

  When I turned 18 and went to college, I inherited my 1099's, and I too learned the joys of tax returns. I learned to hate April, the way my father did. While my friends were turning in their tax returns early, so they could get their refunds, I was always paying estimated quarterly tax and filling out Schedule B's.

  Every year, someone would brag that they filled their 1040-EZ return early, and would try to persuade me to do the same. They never comprehended why I waited till April 14th. I dreaded the years when my estimated tax wasn't enough, and I would have to send the government $400 or more by April 15th.

  So I was thrilled when the stock market crashed in 2002, and my inexorably ever-increasing yearly capital gains and dividends, which were more than my graduate student salary of $14,000 a year, finally dropped to zero. I no longer had to pay taxes on money that I never even got to see! (Why no one ever suggested I put it all in a Roth IRA in the first place, I don't know.) For the first time in my life, I got a tax refund!

  Nevermind that a "tax refund" is simply money one earns that is denied to one for 12 months. At least, for the first time in 30 years, the government was sending me a check.

  This year my husband, who previously enjoyed his yearly tax refunds, has inherited my 1099's. He too is learning the joys of the non-EZ tax returns. This year, he did the taxes because I was fed up with it. For the first time in his life, he had to fill out, not only Form 1040, but also the Schedule B, Schedule D, Schedule F (after we figured out that we don't need the Schedule C, E, or J or Form 5329), Schedule SE, Form 8582, 28% Rate Gain Worksheet, Unrecaptured Section 1250 Gain Worksheet, and the Worksheet to Find Out if You Need to Fill Out Form 6251 (which we didn't).

  And, for the first time in his life, he is paying the government on April 15th.

  For those three blissful years, after the stock market crashed and I got married, I didn't have to fill out the Form 1040-ES. This year, Matt is filling out his first Form 1040-ES, and I can tell you, man, he is not happy.

  I couldn't help laughing though, when I saw his expression as he read Schedule D, Line 11.*

  *To calculate Gain from Form 4797, Part I; Long term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824

  
  from the IRS website
  
  When I first saw this, I thought it said, "File, and Pay. . . More!"
  

  "It is a single advantage of taxes on articles of consumption, that they contain in their own nature a security against excess."
  -- Alexander Hamilton

  • 9:59 pm
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