WP: Numbers Crunch ("tax relief" complicates filing returns)

[DeepModem Mom]

Numbers Crunch

By Albert B. Crenshaw
Washington Post Staff Writer
Sunday, March 6, 2005; Page F01


....Through last fall, lawmakers (since 2001) enacted five major tax bills, three containing the words "tax relief" in their names and the other two featuring "jobs creation" in their titles.

So why, then, does the nation need a President's Advisory Panel on Federal Tax Reform, which recently set up shop and began looking for ways to revise the tax laws?

If you haven't done your tax return yet, you're about to find out.

The Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002, the Jobs and Growth Tax Relief Act of 2003, the Working Families Tax Relief Act of 2004 and the American Jobs Creation Act of 2004 have taken a tax system that was already complicated enough and turned it into a kaleidoscope of annually changing brackets, limits and rules.

Provisions blink on and off like lights in Times Square. Benefits scheduled to expire are extended -- or allowed to expire and then extended. Benefits scheduled to phase in are suddenly accelerated, but their scheduled expiration date is left in place....In addition, over the years many long-standing rules have been dramatically altered, trapping unwary taxpayers....


http://www.washingtonpost.com/wp-dyn/articles/A9163-2005Mar5.html?sub=AR

[NMDemDist2]

1. my tax gal is tearing her hair out, every year it gets more complicated

and has more "gray" areas

as a self employed person, she mentioned last week, it is criminal what I pay compared to what her retired clients pay who's income is mostly Capitol gains. I paid $18K in taxes last year on $60k, while she told me people had three times my income from capitol gains paid $600 in taxes.

[NVMojo]

2. That pretty much happened to me last year as "self-employed"

and it doesn't look like there is an end in sight.

[Deja Q]

8. Pardon me for interceding, but

The same thing happened to me too.

It makes no sense to be a small business.

Yet repukes CLAIM to be pro-small-business.

I see yet another non-squirter here. And golly be, I bet few people would be surprised.

They kill small businesses and, let's face it, with all the tape and hurdles and hoops it's not worth the time. Easier and a more real-life approach to put one's talents to some company. Except they'll chow you down too. In the name of company loyalty and devotion, of course.

I hope the workers figure it out someday and then act on it. But we're already beyond too late. So live while we can. (I'm referring to peak oil, of course.)

[NMDemDist2]

11. and such a large part is my SS contributions and now they're telling

me I won't even get my $$$$ back when I drop from exhaustion after working 60 hour weeks

[AzDar]

3. Did you notice any change in your state taxes AZDEM?...

My husband and I ended up (still trying to figure out HOW exactly)owing 4x as much to the state for 2004 than 2003. Unbelievable.

[NMDemDist2]

4. no I didn't notice anything

are you self employed?

[AzDar]

5. No, married, filing jointly..we don't have a personal accountant..

just use H&R Block, but they've always done an adequate job for us.
We're still going over and over the figures, because I resent paying the Government (not State as much as Fed) one more dime than we must.
I know that new State witholding rates took effect in Jan., (gotta make up for all of Shrub's cuts somehow!), but that of course wouldn't have affected last year's return. Crazy!

[NMDemDist2]

6. IIRC there were new ones on Jan 04 too

methinks you need to adjust your withholdings

[AzDar]

9. methinks you are right!!

[lasttrip]

12. yes the tax is due to "self employment taxes" which consist of

both the employee portion plus employer portion of Social Security tax. you get a deduction on page one for the employer portion.

Tax planning and choice of entity are two ways to combat this.

do you want to be a taxpayer or a tax planner? a competent CPA could minimize tax liability and take advantage of the tax acts, even for people making lees than 100k, but you must address the situation during the year, not in march or april after the fact.

[grasswire]

7. I heard that....

...the end of the marriage penalty has meant big fat refunds for a lot of couples, in the five or six thousand dollar range. Is it true?

[AzDar]

10. We got a slightly larger Federal refund...not nearly as generous as 5-6k,

though!
on edit: I think the whole Bush "tax relief" is a scam...your taxes are lessened slightly here, and then increased there...so in the end,
it's just like everything else he's proffered...smoke and mirrors!

[Kimber Scott]

13. That's why we use TurboTax.

But, here's our tax relief. Last year we got back over 5k. This year we owe 700. Thanks Bush. (I guess we're not rich enough to get to the relief part.)