Life and Taxes

imageIt’s that time of year again, at least in the US, the time when taxes are due. Actually, they are due all year long, but this is the time when we prepare the annual filing. The great reconciliation. In other words, we download Turbo Tax, we plunk in some numbers and we watch with great anticipation for the number at the top to turn green. Woohoo, it’s green! I’m getting a refund!

Yeah, yeah, I know, I get it, I should say “they owe me a refund” and when they owe me a refund it means that I have been lending the government my money, interest free. I began lending them money 15 months ago, I continued to lend them money for 12 months, and only now am I even going to tell them that I want it back. Meanwhile, I’m probably already lending them what I won’t ask for until this time next year. In addition, they can take their good old time making that payment, no late payment fees, no interest, no messing with their credit rating and no calling them at odd hours.

Take your time guys, I can wait. Really, it’s OK. I don’t mind lending you the money. The mental and emotional boost I get when I see that number turn green is worth the opportunity cost associated with that free loan. The number is small, but it’s green and I’m happy.

Maybe the green number will get a little bigger. I haven’t plunked all the numbers into Turbo Tax; I stopped when it turned green. I guess that a small refund is the best result one could hope for. It would mean that I loaned them money, but not too much. People, tax experts and imagefinancial whiz kids would tell me that I’m wrong. They would argue that the best result would be if I had paid exactly 80% of the taxes I owed and then strung them along until the last day for the rest of it.

Then I win!

I understand the concept, but I’d rather lend them the money and not have to worry about paying them in April. That other way, the pay-just-what-I-owe-and-hold-back-the-rest method, takes too much energy. My method is easy. Pick a point where I know that the taxes withheld will be a little more than the taxes owed. Done. Easy as pie. Get the refund, feel good, and maybe treat myself to something at the hardware store.

Every refund feels good, but the best tax refund I ever got was when I was in college in the early 1970’s. During the Vietnam War, in addition to the outrageously high Income Tax rates that we had to pay, we also had to pay an Income Tax Surcharge for the war. Yeah, back then we paid for our wars. That may seem like an novel concept, but I wonder how many wealthy wanna-be nation builders would be advocates of invading places today, if they have to cough up an additional 3-4% of their AGI to help defray the cost.

Let my grandchildren pay for those laser-guided bombs, no problem. Suck that out of my paycheck, whoa big fella, what are we doing in (insert favorite war-torn region) anyway? Oh, and in addition to that Income Tax Surcharge, we paid a surcharge on our phone bills. Just think about the stuff the government could buy if they slapped a 10% surcharge on our cable or our cell phone bills today.

It seems the government collected the surcharge for too long, or they collected too much. In any case, they gave some of it back. I couldn’t find much information on the refund process, but as I remember it, I just got a check in the mail one day. I didn’t have to file any paperwork, I didn’t need any receipts and I didn’t need to go to the Post Office and get any forms. The government just did the math and gave me some money back. Yay me.

By the way, we did have to go to the Post Office to get our tax forms before things like Turbo Tax, PDF and the Internet. I know, I’m starting to sound like the old man who walked uphill to and from school – in the snow, but it’s true.

In addition, the forms didn’t turn green.

You had to work your way through the lines, through the schedules, through the special little calculation formula boxes, all the time returning to the 1040. You did this until you got to those two critical lines, Taxes Owed and imageTaxes Withheld. By that point, you could do the math in your head and when you could write something into the Refund box, it felt great! We also had to go back to the Post Office to mail the forms in. Post Offices across the country had special people working to accept tax returns up until midnight on April 15th. I was actually working at the Post Office on that date one year and we had cars lined up around the block! Seriously, this happened in my lifetime, I’m not making this up. Ooh look, the number is still green.

16 thoughts on “Life and Taxes

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  1. Pictures – Earlier this year, they changed the price of coffee and water in our office. Coffee used to be $0.75. Soda was $0.50 and water was $0.30. Now everything is $0.50. Since I’m a big coffee drinker, I win.
    That’s our daughter looking pretty smug sitting on $7,000 of money, much of which I had paid in taxes, assessments and fees (we play the land on Free Parking and take the money rules).
    I was in Tampa for a training class, I had a rental car, I had to drive across the Sunshine Skyway Bridge. The toll on the bridge was $1 but to access the fishing pier (from where I took the picture) it cost me $3 plus tax.


  2. Tax returns are almost as tedious in any given country. In Spain we do them a bit later in the year (I assume you are talking about personal revenue tax returns) than in the US, but it is tedious enough, even if the government computers have good records that they communicate to you previously as to be able to iron out any mistake on either part (this doesn’t mean we have no tax cheats, but at least if you are willing to cooperate things are a bit more transparent). And yes, I have also seen the transition from brick-and-mortar delivery to internet fullfillement (not yet over entirely), and it is a substantial change (even if there are many people that prefer to have a private specialized agent to fill their forms).


    1. Thanks. One of the things I love about reading and writing in this time is the way I can learn about people in other countries. I guess governments can make anything tedious. Thanks for taking the time to comment.


      1. Thank you. It is always interesting to read about the States and real life there, and not just this fictional reality we think we know through tv. I was just cheking up what turbo-tax was, and I see it is commercial software. Here in Spain we can certainly use commercial sotware, but the Revenue Service (AEAT) produces its own, free to download software, which works on average well for a common citizen, including all the complexities of our fiscal geography;we don’t have 50 states, but 17 autonomous regions, broadly similar in many senses to your states, and two of those regions have fiscal authorities that are parallel, not subordinate to the central agency. So we also have a litany of local taxes and deductions. I assume it will be quite more complex in the US (I definitely see Europe as my country in many senses, but thinking of a unified tax form for the 25 countries seems far away… and probably the mother of all conundrums).


        1. I live on Connecticut (3rd smallest state) and I can do my state income tax online, for free. Turbo Tax is very easy to use, reasonably priced and I would probably trust them more than a government verdin even if they had one. Actually, you can use a version of Turbo Tax online for free but I don’t know much about it.


  3. Tax issues are similar here in India as well. However, I am not much into it and I dont really bother about it if its due or not. I know you must be thinking what irresponsible citizen I must be not contributing to my state’s or nation’s progress, but there are things that I cant mention here publicly. Just like the government I am more bothered about my own priorities.


  4. Taxes ah taxes. On everyone’s mind this time of year. Like you, my husband and I play the game you describe. The refund makes everybody feels good, that’s right. As if we had won the jackpot.
    We don’t complain much here since in France the taxes are much higher.
    Once more as I read your post, I learned something I didn’t know: the Income Tax Surcharge.
    And the surcharge on phone bills? Well, that one would certainly bring in lots of money.
    Enjoy your refund!


    1. They phased the phone surtax out over a long period of time as I recall. The rates were much higher, but I was in college and in my first jobs, so my income was lower and I was at the bottom end of those rates. I don’t want to invite too much flack, but I think the rates could edge up a bit; there is so much that needs to be done in this country w.r.t. its infrastructure. Thanks again for reading and commenting.


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