Tax Return Griping Thread

[easysurfer]

Good idea. In the past, I have made changes in things to avoid extra tax work. I've even considered rebalancing on Jan 2 and Dec 30 so that I'd only have to deal with the tax consequences every other year.

That's an interesting idea -- to time the rebalancing on those days.

I just rebalance near the start of the year, and when possible, within my IRA holdings to not have a taxable event.

 

[Sirka]

Sch K-1

I'm owed a refund for fed and state, but I'm too chicken to file early in case I get corrected forms. Only thing worse than filling out complex tax forms is correcting them after they've been sent in.

+1
I hate 1040x, so I wait each year until a last moment. In 2011 I got corrected Sch K-1 on April 10th (online). I am slowly giving up on LMPs and the headaches with so many fields ( and codes) on K-1, that do not apply.

 

[TromboneAl]

That's an interesting idea -- to time the rebalancing on those days.

I just rebalance near the start of the year, and when possible, within my IRA holdings to not have a taxable event.

One reason not to do that: Isn't there often an increase in stock prices on the last day of the year?

 

[FIRE'd@51]

I don't report it, even though I know that technically I should. This is pure rationalization on my part, but I figure that most people don't, so why should I take the extra effort, maybe be rewarded by having to pay more taxes for my effort/honesty, just for being a 'chump'?

You might want to have the moderators delete this part of your post, in the event an IRS agent might be reading this forum, and ask Andy for your IP address in order to track you down.

In actuality, my guess is the IRS would never know you didn't report it (since no 1099 was filed) unless they were looking over your return for something else (e.g., to make sure all of your options trades were reported properly ).

 

[Moemg]

You might want to have the moderators delete this part of your post, in the event an IRS agent might be reading this forum, and ask Andy for your IP address in order to track you down.

In actuality, my guess is the IRS would never know you didn't report it (since no 1099 was filed) unless they were looking over your return for something else (e.g., to make sure all of your options trades were reported properly ).

That reminds me of a funny incident . We hired a painter to paint the inside of our house . He asked for cash so he would not have to report it .The funny thing was my husband was an IRS agent .

 

[TromboneAl]

That reminds me of a funny incident . We hired a painter to paint the inside of our house . He asked for cash so he would not have to report it .The funny thing was my husband was an IRS agent .

Did you tell him?

 

[flyfishnevada]

I've reported and not reported dividends from checking, etc. Never had an issue either way. My Credit Union conveniently list interest paid for the previous year for all my accounts, including my travel trailer loan. Easy to find the interest for the second home deduction.

I don't know how people did this stuff before turbo tax. I itemize and did three schedule Cs. Ug! Thanks to my health insurance being so crappy this year, I did get to take a medical expenses deduction of almost $3000. Would rather have had the insurance cover those costs but better than a poke in the eye with a sharp stick.

All I know is that after working with Oregon, enduring might be a better term, on my FIL's unpaid state taxes, I am glad I live in Nevada! I even get to deduct my sales tax now.

The last indignity Oregon put us through was one section told us the final amount we, rather the estate, owed and told us to send it in. The section that receives payments didn't have it in their computer system yet and so instead of just holding on to it for the 24-48 hours it took for it to show, they sent it back to us and charged us interest. After a call to find out WTF we were told it was in the system and we could submit and were given the new amount with interest included. They make the IRS look downright friendly and helpful. I can't tell you how many tears my DW shed trying to pay those SOBs.

 

[Moemg]

Did you tell him?

No, we just laughed about it !

 

[jebmke]

My gripe. My 2009 Fed return was closed 2 weeks ago and they still haven't sent me the money. Because they notified my state (1 month prior to accepting my return) that I was deficient, the state re-opened my 2009 return and sent me an assessment. Now I have to unwind the state people.

 

[easysurfer]

One reason not to do that: Isn't there often an increase in stock prices on the last day of the year?

Perhaps. But I try not to let individual dates dictate when I choose to rebalance.

 

[justplainbll]

+1.

For this reason, the last time I started a new checking account, I made sure that it does not pay interest to avoid this situation.

I preferred the pre-interest paying demand deposit accounts with free checks and no fees that were the standard in the 1960's.

 

[LOL!]

On the lack of 1099 for small amounts of interest: I get the number off my last statement of the year for 2011. It has the YTD (12/31/2011) interest paid. I've done this for years.

And a new one: I received a 1099 that showed 1 cent of tax-exempt municipal bond income. TurboTax rounds it down to $0, but then makes me figure out how to fill in a bunch of extra lines related to that tax-exempt interest. Then TT complains that I've filled in the lines when I have $0 of tax-exempt interest ... and round and round we go.

 

[Animorph]

Oh yeah! We had a line on the state tax return this year for "use tax". We're supposed to total up all the state tax we didn't pay by shopping online. One of those old tax rules, always ignored, that was resurrected to bring in some additional income. And there are lots of exceptions, like food. Although I keep good records in Quicken, I don't track state taxes paid. I ended up totalling all of my Amazon purchases and paid the tax on that. I think some of those purchases were excepted items, but we probably had other non-Amazon purchases to make up for it. That one may disappear next year, since it was not very popular.

 

[Animorph]

And the good old foreign tax credit/deduction. The IRS is handling this pretty easily now, as long as I remember to enter it correctly in TT. But the state wants to know the country for each little bit of foreign tax. I have to skip the deduction for state as a waste of more time than it is worth.

 

[justplainbll]

The NYS form IT-2 and Fed 1040V seem quite superfluous.
So far even utilities, our real estate taxes, and credit card companies provide you with an envelope to pay your bill; Guess our govt's are more cost effective, or arrogant . The only nongovernmental entity that would bill me thousands of dollars per month and not provide a payment envelope was my Mom's 'Skilled Nursing Care' facility.
The instructions for assembling forms for a paper filling of NYS income tax is an abortion.

 

[rescueme]

I owed the IRS $350 which they removed from my bank account the day after I e-filed.

But Louisiana owed me $151, and it took them several weeks after I e-filed (on their website), before that appeared in my bank account.

Isn't that just typical!

It's tough being part of the "1%" ...

 

[easysurfer]

Oh yeah! We had a line on the state tax return this year for "use tax". We're supposed to total up all the state tax we didn't pay by shopping online. One of those old tax rules, always ignored, that was resurrected to bring in some additional income. And there are lots of exceptions, like food. Although I keep good records in Quicken, I don't track state taxes paid. I ended up totalling all of my Amazon purchases and paid the tax on that. I think some of those purchases were excepted items, but we probably had other non-Amazon purchases to make up for it. That one may disappear next year, since it was not very popular.

For the past couple of years, a "Use Tax" line was added too for my state taxes. In years past, I actually have been keeping records and paying the use tax for years, even before the added line. Now, I have to option to calculate the use tax payment based on purchases or have it automatically calculated for me based in income if I do not keep records. I now choose the latter because it's easier and also I make several purchases online during the year and the tax is less for me this way.

I figure most residents haven't been paying for years, so now since it's on the state return, residents who make out of state purchases can't plead ignorant of the tax.

 

[Nords]

1. K-1s. If someone had said to me when I was contemplating an investment in a partnership requiring K-1 reporting: "Nords, come with me to watch us do our taxes!" I would probably have not invested. I have four of five K-1s. I'll probably see #5 in July.

2. 1099-Qs and 1098-Ts for college expenses.

3. Redeeming I/EE bonds tax-free for educational purposes by having to launder them through a 529. It turns out that "educational purposes" for I/EE bonds is either tuition or a 529. "Room & board" can only be paid from a 529.

4. Qualified Higher Educational Expenses (QHEE) can only go as high as the college's on-campus room & board fees, even if your student is living off campus. If your student goes to summer school then you have to get the special summer-school QHEE rates for your documentation.

5. Points paid to refinance a 30-year mortgage must be deducted over the life of the loan. Unless you refinance, but of course you probably paid points for the new mortgage too.

6. BofA will tell you on your 1098 all about how much your mortgage paid in principal & interest, but not how much they paid for your insurance & property taxes out of your escrow account. This makes it tough to fill out Schedule E for your rental property. Luckily I happened to save their four-page two-point-font escrow analysis statement. Unluckily I happened to use the "projected" numbers instead of the "actual" numbers, but I eventually caught my mistake.

7. Mileage tracking of vehicles used for (a) a Schedule SE business, (b) a rental property, and (c) volunteer work.

8. Having to document home energy improvements all the way back to 2006 to make sure that you don't exceed the cap on some improvements (like energy-efficient windows & doors).

9. For our familyroom renovation, the contractor ordered an eight-foot lanai door along with 10 windows. It's all on one invoice and it's not broken down by individual items. The tax code gives separate tax credits for "energy-efficient doors" and "energy-efficient windows". Luckily Home Depot had prices on their website.

10. This seems like a good place to end the list, so I've saved the "best" for last: TreasuryDirect lets you convert paper savings bonds to electronic bonds by mailing them in. However they give you a separate "conversion account" that's linked to your regular account. At tax time, you have to find the two separate website pages containing one 1099 from your regular electronic bond account and a second 1099 from your conversion electronic bond account. You happen to get two e-mails about the 1099s, but they're darn near identical and you just have to be smart enough to go looking for the conversion account 1099.

When I'm feeling demoralized about all of this, I say to myself "It could be worse: you could still be doing the taxes for that non-profit, and sending out their 1099s!"

Anyone notice the unconventional rounding? $3.50 is rounded to $3 instead of $4, $3.51 is rounded to $4.

Sounds like a convention to me...

My gripe is after paying for TurboTax also having to pay an additional $20 to have my state returns e-filed.
When I was w*rking I typically had to file in 3-5 states depending on where I worked that year and would get back $10-30 from each state. It seemed to me to make little sense to pay $20 to e-file to get back $10-30, so I print out and mail each state other than my resident state.
Now that said, my only tax preparation costs are TurboTax, e-filing fees and my time so I guess that I don't have a lot to gripe abut in the whole scheme of things.

Imagine how much worse it'd be if you had to pay an accountant for that tax prep...

 

[TromboneAl]

I learned that 50 should be rounded up.

When rounding for taxes, does .50 round up or down? so, would 4413.50 - Ask Community

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At least our taxes get a little simpler each year. Also, I write notes to myself for next year (my memory doesn't last that long). For example:

If you received less than $10 in interest, you will not receive a 1099. In that case you can get the info from the NVB statements or the Vanguard web site.