Damn TAXES ??? Double Damn TAXES ?? (rant)
When I started drawing my free money (social security), I did the IRS worksheet for two or three years to see if I had to pay income tax on my SSA benefits. It always turned out I didn't have to pay tax on my free money, so I stopped doing the worksheet.
This year it turned out I should have done the worksheet because I got a letter from the Feds telling me my "Adjusted Gross Income" was grosser than I thought it was so my tax liability was more than I thought it was. Since the IRS motto is "Pay up or go to jail", the Feds got their pound of flesh but that wasn't the end of it.
Virginia Income Tax is based on Federal Adjusted Gross Income. So, naturally, I had to do an Amended Virginia Income Tax Return. I did my original Virginia return online, so I have all the bottom line numbers, but I don't really know how they were computed. I got the instructions and forms from the Commissioner of the Revenue and set out to do an amended return. You can't do an amended return online.
Virginia has an Old Folks Tax Credit. You get an extra deduction just for being old. The maximum credit is $12,000.00. Some people get the full $12,000.00, some people get none of it, and some people get part of it. Naturally, they have a !!!WORKSHEET!!! to figure out which one you are. One line on the WORKSHEET tells me to enter my FDC addition if applicable. One line tells me to enter my FDC subtraction if applicable. I never did find out which if either was applicable because I couldn't find out what the hell an FDC is.
I probably had about fifteen or sixteen hours invested in trying to do the WORKSHEET when I got so mad I decided I'd go to jail before I'd screw around with it any more. Last night I dorked around with it until I got a headache.
This afternoon I gathered together a few pounds of paper and went to the Commissioner's office in Halifax. I went up there with every intention of throwing my rattle and telling them where they could stick their return, but there was a very nice young lady there who actually knew how to do this crap. She wanted to know if she could help me. I told her I hope so, and then told her what the deal was. She said "It'll take a few minutes, but if you're not in a hurry I'll fill it out for you".
When she finished, my Virginia tax stayed exactly the same. Added the free money on one end and subtracted it on the other end and the adjusted Adjusted Gross Income stayed the same. That's actually what they call it; adjusted Adjusted Gross Income. I said You mean after all that I don't even have to do an amended return. She said, No I still had to do the amended return because when they compare my Virginia return with my Federal return, if they aren't the same, it would probably cause an audit.
I asked her to show me how she did the WORKSHEET. She told me if your Adjusted Gross Income is less than $75,000.00 you don't have to do the worksheet. I asked her if it would be a good idea to include that little tidbit in the instructions. She said she thought it would, but they don't always do what she tells them. I told her that in the interest of simplicity, I'd try to keep my income below $75,000.00.
I asked her, just for curiosity, what the hell is FDC? She said she didn't know, but she looked it up. FDC is your "Fixed Date Conformity". I said "What the hell does that mean?" She didn't know and couldn't find out.
Anyhow, she did the forms, and even filed them for me. Nice lady.
This year it turned out I should have done the worksheet because I got a letter from the Feds telling me my "Adjusted Gross Income" was grosser than I thought it was so my tax liability was more than I thought it was. Since the IRS motto is "Pay up or go to jail", the Feds got their pound of flesh but that wasn't the end of it.
Virginia Income Tax is based on Federal Adjusted Gross Income. So, naturally, I had to do an Amended Virginia Income Tax Return. I did my original Virginia return online, so I have all the bottom line numbers, but I don't really know how they were computed. I got the instructions and forms from the Commissioner of the Revenue and set out to do an amended return. You can't do an amended return online.
Virginia has an Old Folks Tax Credit. You get an extra deduction just for being old. The maximum credit is $12,000.00. Some people get the full $12,000.00, some people get none of it, and some people get part of it. Naturally, they have a !!!WORKSHEET!!! to figure out which one you are. One line on the WORKSHEET tells me to enter my FDC addition if applicable. One line tells me to enter my FDC subtraction if applicable. I never did find out which if either was applicable because I couldn't find out what the hell an FDC is.
I probably had about fifteen or sixteen hours invested in trying to do the WORKSHEET when I got so mad I decided I'd go to jail before I'd screw around with it any more. Last night I dorked around with it until I got a headache.
This afternoon I gathered together a few pounds of paper and went to the Commissioner's office in Halifax. I went up there with every intention of throwing my rattle and telling them where they could stick their return, but there was a very nice young lady there who actually knew how to do this crap. She wanted to know if she could help me. I told her I hope so, and then told her what the deal was. She said "It'll take a few minutes, but if you're not in a hurry I'll fill it out for you".
When she finished, my Virginia tax stayed exactly the same. Added the free money on one end and subtracted it on the other end and the adjusted Adjusted Gross Income stayed the same. That's actually what they call it; adjusted Adjusted Gross Income. I said You mean after all that I don't even have to do an amended return. She said, No I still had to do the amended return because when they compare my Virginia return with my Federal return, if they aren't the same, it would probably cause an audit.
I asked her to show me how she did the WORKSHEET. She told me if your Adjusted Gross Income is less than $75,000.00 you don't have to do the worksheet. I asked her if it would be a good idea to include that little tidbit in the instructions. She said she thought it would, but they don't always do what she tells them. I told her that in the interest of simplicity, I'd try to keep my income below $75,000.00.
I asked her, just for curiosity, what the hell is FDC? She said she didn't know, but she looked it up. FDC is your "Fixed Date Conformity". I said "What the hell does that mean?" She didn't know and couldn't find out.
Anyhow, she did the forms, and even filed them for me. Nice lady.
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I'd rather be young and have less money.[:D] 0 -
There's probably a room full of tax attorneys in Washington DC reading this, high fiveing and laughing so hard they're peeing their pants. They've called the Whitehouse and asked to borrow that Misson Accomplished banner. They did it...made the tax code incomprehensible.[:(!] 0 -
quote:Originally posted by GUNFUNCO
I'd rather be young and have less money.[:D]
Yeah, me too. I've been young and I've been old. I like young better. But I figured out I'm probably going to be old whether I take the exemption or not, so I take it. [:D]0 -
[:D][:D][:D][:D] Love this story. Keeps some of us in a job. [:D][:D][:D] A professional preparer could have done the amended return in a short time --- much less than the many hours cited above --- Job Security for us. 0 -
What is income tax ??
Do you need "income" in order to get the tax ??
Doug0 -
California does not tax Social Security income. They finally did something right.
Pete0 -
Now you've hit my pet peeve, the tax on Social Security benefits.
With our retirement income, interest & Social Security we don't have to pay UNTIL we take money out of our IRAs. The first dime we take out causes us to have to pay not only on the withdrawals but on our Social Security as well. So our IRAs are DOUBLE taxed. We should have lived on our IRAs & waited to start drawing Social Security.
When we reach the age when we have to make minimum withdrawals we will have to get a divorce.
That's my biggest complaint. The marriage penalty built into the tax.
If we get a divorce we would not have to pay any tax at all or at the least we would pay very little & stay well within the 50% range.0 -
There is no tax on Social Security if that is all you draw. But...if you have income on top of the social security then you get into the taxable wage problem. Pull out some of your 401K money and lump that on top of social security and the combination will through you into a taxable situation. 0 -
JamesRK,.......you made a BIG mistake in your description. Your SS, is NOT free money,..........you have paid into it all of your life, and now you are getting back a small amount compared to if you had invested it yourself over all those years. If you were ever self employed,.......double your costs, like me, as I have my own business, and get to pay as "employer", and "employee",......it is a joy! If you are just over the limit, and DONT want to limit your investment income,........look at a MUNI bond A+, or better, and insured, and also non AMT! That income is considered non-taxable,......all depends how much of your gross income comes from investments, or from actual work.
Take Care.0 -
This story is reason number 39,487,394,302,982,484,239,240,824 not to live in a state with an income tax. 0 -
Actually any tax on social security income is double taxation under any circumstances. When I was paying into the social security system the money I put in was taxed as income before I put it into Algore's lock box. The part that is taxed as income as I take it out of Algore's lock box is taxed twice. Once on the way in and once on the way out.
However, that's not what I was gripeing about. I'm of the opinion the tax code and filing instructions should be written in such a way that a normal person of average intelligence can read and understand it. Terms like "Fixed Date Conformity" should be defined or avoided altogether, and if a !!!WORKSHEET!!! only applies to people with adjusted gross income over $75,000.00 it would be nice to include that little nugget of information in the instructions.
The whole damn system is so convoluted that if you do anything other than subsist on your retired pay and social security income, it is impossible to comply with the law. In order to comply with one part of the law, you violate another part of the law.
The part I like best about the IRS is they have their own justice legal system complete with their own judges.0 -
One more reason we need the "Fair Tax",........but it will never pass! 0 -
I think I prefer the FLAT tax to the FAIR tax, but I can't say I'm well versed in the FAIR tax. From what I do know of the FAIR tax, it appears to be to much like the European "Value Added Tax". Makes it to easy to include hidden taxes in retail prices of goods and services so you are paying taxes you don't even know about.
I do believe any system would be superior to the system we have.0 -
Read the book, or look at the website sometime, when you are in the mood to do a lot of reading. I was in favor of the flat tax that Steve Forbes was a champion of,.......but as per usual, they wanted to put in too many exemptions. The "fair tax" on the other hand would virtually eliminate the IRS,.........therefore my comment that it will never pass. 0 -
flat tax, fair tax, however you want to call is still a tax, and tax especially in a form of "flat" or "fair" is going to lead to the same exact thing we have now.
the less taxes more efficient the government, however the only way the government can be efficient is by being small, understaffed and with limited resources. and this is something we're not going to see without some radical changes.0
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