Tax Extensions are Totally Taxing

Of all the things I do in life, few things stress me out as much as my annual tax-preparation process. It's a perfect, sickening storm that combines my disdain for and fear of three things: dealing with the IRS, doing math and wading through paperwork.

It's weird, because with some aspects of my life, such as cooking, I'm highly organized. I have all my pots and pans and measuring cups and piping tips and utensils in their special places, just so.

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Doni Chamberlain
Independent online journalist Doni Chamberlain founded what’s now known as anewscafe.com in 2007 with her son, Joe Domke of the Czech Republic. Chamberlain is an award-winning newspaper opinion columnist, feature and food writer recognized by the Associated Press, the California Newspaper Publishers Association and E.W. Scripps. She lives in Redding, California.
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38 Responses

  1. Beverly Stafford says:

    Your – and my, unfortunately — tax resolutions are exactly why I believe in a national sales tax (on everything but food) which would completely eliminate the need for hours (days and weeks) of preparation. Why should we have to go through this time-consuming, nerve-wracking hateful process when there is a simple alternative? Excuse me, I have to leave now so that I can to go through piles of papers (duplicates and triplicates of some of them while searching for that one elusive sheet) so that I can enter ten months of tax information into QuickBooks.

    • I’m with you on the national sales tax, Beverly.
      Your note gives me pause, because Joe and I were just discussing getting Quickbooks (which means he’d probably be the guy to do it for me). It sounds like your system is a lot like mine. Dang!

      • Beverly Stafford says:

        I got involved with QuickBooks (QB) when I became treasurer for our non-profit library. The previous treasurer was using Quicken which wasn’t working. My sister is a QB consultant; so she, LogMeIn, and the telephone, taught me the rudiments of what I needed. The Board felt the library had been brought into the 21st century once QB was up and running. I then decided to use QB at home which in effect wasn’t much more than a glorified check book since I don’t do payroll or accounts receivable or accept credit cards. Sister helped set up the Chart of Accounts, and from then on, it was just plugging in numbers and letting QB do the math. But, since I’m a pro at crastination, last year and this, I’m very far behind with my data entry. So that’s hanging over my head until I bite the bullet and start pawing through the stacks and piles of stuff to be entered.

  2. Bruce Vojtecky says:

    Doni, I can relate to you. Trying to move to Phoenix and do taxes was over whelming. Finally I just through everything in a big envelope and mailed it to my accountant who is in Redding. He managed to have it done and mailed off by April 15th, or 17th this year.

    • Seriously, the thing with accountants is I’m beginning to think they just need a few pieces of key information, and the rest, all those receipts and statements, they don’t care about. But they won’t tell us, because that’s their magical secret, otherwise we could do it for ourselves.

  3. Steven Towers Steven Towers says:

    It would require a national sales tax of around 25% to replace the revenue from federal income taxes. Four-fifths of Americans would see their share of total taxes rise—the middle 1/5 of Americans by a multiple of 2.5x. Only the top 1/5 of Americans would see their share of taxes paid reduced.

    Another favorite proposal by rich Republicans—a flat tax on income—would have to be more than 30% to raise enough revenue to replace the current progressive income tax. I don’t know about you, but my current effective tax rate isn’t anywhere near 30%. I think mine is around 15%.

    Both of these reforms of federal taxes are usually trotted out under the flag of “fairness.” See, the current tax code isn’t fair to the rich. It’s the kind of thinking put to action that will hasten the day when we’ll all be getting texts saying it’s time to drag the über-wealthy from their cars.

    • I was quick to agree with Beverly’s national tax because I’m lazy and want the yearly tax-preparation angst to end.

      Call me a waffler, but now I agree with you.

    • Beverly Stafford says:

      My only question about your figures, Steve, is how many people and corporations don’t pay federal income taxes due to creative accounting and loopholes? If the Trumps and Zukerbergs and Buffets and Microsofts and Apples of the world actually paid the same percentage that the rest of do, the feds would probably be swimming is money and the national debt could be zero. I don’t question your figures; however, it would seem to me that if every corporate jet and computer and desk had a national sales tax tacked on along with every Armani suit and Prada shoe, that 25% figure you quote could be reduced significantly.

    • CODY WASHBURN says:

      Once they start a VAT or GST they can then raise it at any time. This is not a good idea at all. There are many countries that started out low, and are now in the mid 20% range

  4. Barbara Rice Barbara Rice says:

    I once presented my tax gal with a brown paper grocery bag – the big kind – full of receipts. All she said was, “Oh, goody. I get a bag of receipts.”

    The next year I gave her the receipts in a shoebox. I felt this was a major step up. She didn’t seem to acknowledge my progress.

    • Steven Towers Steven Towers says:

      I’m not going to publicly admit in detail what a disappointment we are to the guy who does our corporate taxes, except to say that I think we’re about two quarters behind.

      • Richard Goates says:

        Steve with the new tax laws is there a huge saving having a Corp?

        • Steven Towers Steven Towers says:

          I’ll question my figures for you…you can find a wide range of figures regarding both the national sales tax and the flat tax. I tried to pick modal figures from decent sources, but the actual national sales tax percentage would be at the pleasure of Congress. The 30% figure is just a back-of-the-envelope estimate of replacing the income tax dollar for dollar. That estimate takes in to account how much rich people spend, so Lear jets and Prada shoes are already in there.

          The thing about the Zukerbergs and Buffetts of America is that they’re not making most of their money on taxable salary and such. Most of their money is taxed far more lightly as capital gains. Buffett famously said he pays a lower percentage of his income than his personal secretary.

          No, loopholes for person income tax aren’t fair. I’m fairly convinced that collecting more corporate tax isn’t the answer, though. The United States had the highest corporate tax rate in the world (35%) until 2017. Most Scandinavian countries are in the 20-25% range. Germany, Canada, and Great Britain are less than 20%. Switzerland is 8.5%.

          The result was that American-based multinationals were hoarding $2 trillion dollars in overseas accounts, rather than transferring money to America where it would taxed HARD before being reinvested or paid out as dividends to stockholders. After corporate taxes were cut to 21% last year, Apple repatriated about $210 billion and paid $47 billion in corporate taxes.

          As far as corporate taxes go, I think we’re at about the right spot. The problem is with all of the tax reform aimed at concentrating America’s wealth in the hands of an increasingly small portion of the population by lowering income, capital gains, and inheritance taxes on the über-wealthy.

          • Steven Towers Steven Towers says:

            Oops. That was supposed to be a reply to Barbara up above.

            My reply to Richard: I’m the wrong person to ask. I haven’t received much in the way of sound tax planning since my former CPA went to prison.

          • Steven Towers Steven Towers says:

            Check that……reply to Beverly up, up above.

      • Oh, yes, I didn’t even mention quarters .. and estimated taxes, which I usually end up paying in four separate checks at the end of the year. And I didn’t mention that the fact that I’m self-employed is the real crux of the issue.

        Seriously, the year before last I finally got up the nerve to ask Darla, “WHY do I ALWAYS have to pay?” She just smiled: “You’re self-employed.”

        Most of my life I’ve worked for others, and in ANC’s early years Husband No. 2 did our taxes. It’s taken me this long to adjust to this hellish self-employment reality.

    • Barbara, you made me laugh out loud. If you, one of THE most organized people I know, has these issues at tax time, then I feel almost normal. Thank you for that.

  5. Doug Mudford says:

    This past April was the first time I haven’t requested an extension in an embarrassing number of years. I extended for many of the reasons you listed. My accountant called about the status of my health.

    I had come to the realization that I was like the habitually tardy person, spending too much time on excuses when just showing up on time would be easier.

    I’m much older than you…so you have many more years of the Procrastination Polka before just filing on time.

  6. Dang. I wish I’d thought of the Procrastination Polka. Clever.

    Yes, I will take your advice and file on time for my 2018 taxes.

    (I think if I didn’t make an appointment with my accountant, not only would she NOT inquire about my health; she and her office would throw a party, or move without a forwarding address.)

  7. Breaking news from my accountant’s office: My taxes are ready. I owe $192 in federal taxes, and OMG, I am getting a $95 state refund!

    I am so, so, happy!

    OK, I might reconsider my vow to file on time in 2018. If this is what happens with an extension, I might do it again next year. I don’t know. Right now I’m basking in the good news and will be celebrating.

    (I wonder if I can write that off…)

  8. AJ AJ says:

    Taxes . . . . they always get you . . . financially as well as in time, energy and anguish! But then, I bet you never got a letter from the IRS, on the very day you had mailed your taxes, stating that you had under reported.. . .that’s REPORTED not ESTIMATED . . . your previous year by NINE MILLION, ONE HUNDRED FIVE THOUSAND DOLLARS PULS. The saving grace was that it was so ridiculous that I simply laughed until I got it straightened out.
    And, by-the-way . . . . when it comes to paper organization, I’m a GREAT pilot!! Yep!! I pile it here and I pile it there!!

  9. Hal Johnson Hal Johnson says:

    Given the choice between getting our tax stuff together and being horse-whipped by Roseanne Barr after she just got off of a phone call from Tom Arnold, I’d really have to think on it.

    We strongly suspect that our former tax preparer retired to get away from clients like us.

  10. Bruce Vojtecky says:

    Who would pay sales tax but doesn’t income tax?
    Drug dealers.
    Criminals.
    Churches.
    Non-profits.

    • Steven Towers Steven Towers says:

      Retirees with modest incomes would get hammered by a national sales tax.

      • Bruce Vojtecky says:

        Steve, as a retiree I am in control of what I spend on sales tax. I am not in control in what I spend on income tax.

        • Steven Towers Steven Towers says:

          Bruce — I don’t have a window on your situation, but most retirees of modest means pay either zero federal income tax, or a nominal amount. If we switch to a federal sales tax, you’ll have no control over the rate you pay—you’ll only be in charge of figuring out how to afford spending 30% more for everything you buy. That’s the whole idea: Rich Republicans scheming to make you pay a lot more so they can pay less.

          • Bruce Vojtecky says:

            Steve, do those rich Republicans you’re talking about include two of the richest men in the world? Jeff Bezos and Warren Buffet, or did you forget they are Democrats?

          • Steven Towers Steven Towers says:

            Bruce — Bezos is a Libertarian who gives fairly equally to both parties, as does Amazon’s PAC. He is almost rabidly non-partisan if that’s possible. Buffett is a Democrat who has supported Democrats in the past and is openly critical of the tax code favoring people like him. He has gone to great lengths to explain that the growing wealth disparity in the United States is a threat to capitalism, and calls his fellow billionaires short-sighted greed-heads. With the notable exception of Oracle’s über-douchebag Larry Ellison, most of tech billionaires tend to be progressive.

            https://www.washingtonpost.com/posteverything/wp/2016/05/31/tech-billionaires-like-democrats-more-than-republicans-heres-why/?utm_term=.58047756aad9

          • Bruce Vojtecky says:

            Steve, I agree with most of your tax points as they are informative and valid. Where you lose me is when you go off on your anti-Republican rant that they are responsible for all the world ills.

          • Steven Towers Steven Towers says:

            If I blamed Republicans for all the world’s ills, that would be rude and overly harsh. I think I was blaming them specifically for trying to make the tax code benefit billionaires, at the expense of people like you and me, and especially at the expense of future generations. They deserve that blame, and they deserve it in spades.

            And to be fair, I give them credit for cutting corporate taxes, which I think were too high and encouraged offshore hoarding of cash.

    • Beverly Stafford says:

      That what I meant about loopholes and creative accounting. Everyone would “contribute” unlike what happens with income tax.

  11. Joanne Snyder Joanne Snyder says:

    Adrienne, I love your story! If the IRS told me I had not reported 9 million dollars of earnings, I would wonder what I had done with that money….and why I had no recollection of having that much money laying around. AND, if I could find such an amount stashed somewhere in my piles of paperwork, I would be happy to pay taxes on it and a penalty for having been so forgetful. Great story. I’m glad you got it resolved.

  12. Beverly Stafford says:

    Bruce, you and I as retirees on fixed incomes, will have to disagree with Steve – which I seldom do. I’d pay a whole lot just so I don’t have to go through the annual tax filing hoops. When we moved to Alaska in the mid-70’s, we had a ton of moving expenses which I deducted from our return. We were audited due to those deductions. Our appointment coincided with a terrific snow storm, and the Highway Patrol asked people to stay off the streets. I called the local IRS office to see if we should change the appointment but were told to come anyway which we did. The little honey who “helped” us was a short, overweight young woman who was poured into black jeans, wore a black leather jacket with 12″ fringe on the sleeves, and who appeared not to have brushed her teeth for several days. She went over each of our deductions and finally found a telephone call that she felt was unjustified. We ended up paying something like $2.15 because she pounced on that phone call. So yeah, a national sales tax is very appealing to me.

  13. AJ AJ says:

    A few years ago I had occasion to spend time in Stockholm with a dear Swedish friend. We got to talking about taxes and such and so we sat down and made a list. Column A how much they paid in taxes (about 48% at that time) and what they got for that. Column B was what I paid in income tax and what I got for it. Then in column C was all the things I had to pay for myself that they received “free” as a result of their tax. What was interesting was that the columns came out on the long side for my Swedish friend. People tend to get apoplexy when you mention a 48% flat tax.. . but pay through the nose for health insurance, educational costs, child care, maternity leave . . . etc. . . . etc Is the Scandinavian model perfect? Heck no .. . .on the other hand, is ours? Given that we are dealing with human beings here, I doubt that perfection is anywhere close to the horizon.

    • Steven Towers Steven Towers says:

      The Scandinavians, living in so-called social democracies, are the happiest people on Earth. They live longer than us, too. All that happiness in spite of their dark, oppressive winters. (Most of them can afford to take a month or so during winter in Thailand, Spain, Morocco, or wherever, because they get more time off than we do, too.) But there’s no stubbornness like American stubbornness: That insistence that we’re doing it right, and they’re commies.

      Not to quibble (okay, to quibble) — Sweden doesn’t have a flat tax. It’s a progressive tax, like ours, but without all the loopholes for the wealthiest of the wealthy.

      • Beverly Stafford says:

        OK, I’m moving to Sweden. I found, however, that when we lived in Alaska for many years, I didn’t like to leave in winter because after a couple of weeks in sunny, warm California in January, it was depressing to go back to a couple of more months of winter. It all evens out in the end. Being able to read in bed at 10:00 at night in June with no lights on was a treat.

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