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taxes argh
Apr. 14th, 2022 06:29 amI object on principle to paying a private, for-profit company for the privilege of paying my taxes -- if the government requires me to pay taxes, it's obligated to allow me to pay taxes -- so whenever possible, I do the taxes myself. We make too much money for free e-file from either the Feds or the State, but the Feds offer something called free file fillable forms, which doesn't hold your hand as much as TurboTax but allows you to e-file without paying a private company, and the State of New York offers fill-in PDF versions of most of their forms, which can't be e-filed but can at least be filled in and edited on the computer. Both of these systems have you enter numbers in some fields, and when you're done, they do the arithmetic to fill in other fields.
Anyway, I started working on our taxes a month ago, and ran into a bug in one particular freefilefillableform: every time I told it "I've finished; do the arithmetic and fill in the rest of the fields," it replaced one of my numbers with zero and recalculated everything else accordingly. Which made our total income off by a relatively trivial $300, but I didn't want to file a return that I knew was wrong, so I filed a bug report and waited for them to fix it. Another minor difficulty: my employer's W-2 lists five kinds of non-wage benefits, but freefilefillableforms has room for only four, so the freefilefillableforms documentation tells you to fill out another W-2 with the remaining benefits (and zeroes everywhere else, lest it throw off your total wages), so I did that.
I came back to the taxes last week. The response to my bug report was "we can't reproduce this problem, so we can't fix it," but I tried the form again and now it worked, so I finished up the Federal form, re-did the State form with the right numbers, and was done on Saturday. We owed the Feds a few thousand dollars, but the State owed us almost exactly the same amount, so I filed the State return first (through the mail, on dead trees), then e-filed the Federal return.
The next day there was an e-mail saying the Federal return had been rejected, for two reasons: first, the amount at the bottom of Schedule A didn't match the amount I deducted on the 1040 (because Schedule A is all about itemized deductions, and the standard deduction was larger so I took that instead), and second, I had zero wages on one of my W-2's (because that's what it told me to do if I had more than four kinds of non-wage benefits). The former could be fixed by simply deleting Schedule A, and I didn't see a way to fix the latter, so I resubmitted to see whether it would go through. I thought of putting in a wage of $0.01 on that W-2, but figured that would raise red flags too.
The next day there was another e-mail saying the Federal return was still rejected because of the zero-wage W-2. Elsewhere on the IRS Web site I found the statement that this was a known limitation of freefilefillableforms: that if you have more than four kinds of non-wage benefits, "find another method of e-filing". In other words, pay a private company to allow you to pay your taxes to the government.
So I started the taxes all over from the beginning using TurboTax, which I had used in some previous years when I sold stock or had other complicated stuff going on. And TurboTax helpfully pointed out some sources of income I had forgotten about, e.g. interest on a non-tax-deferred retirement account, and some small amounts of capital gains incurred between the time money was put into that account and the time it was allocated to its ultimate investment destination. As a result, we owed the Feds somewhat more than I originally thought, and the State owed us somewhat less than I originally thought, so I needed to re-file the state form.
One of the annoying and obscure parts of the New York State tax form is "use tax", where they try to recover sales tax for things you bought from other states and didn't pay NY sales tax for. In most cases you can just plug your AGI for the year into a table that tells you what you owe, without itemizing individual purchases (which is good, because in 2020 and 2021 everybody's been mail-ordering a lot of stuff, mostly across state lines!). Only individual purchases over $1000 each need to be itemized, and added to the AGI-based estimate that covers all the small stuff. As it happens, we made two such purchases in 2021, of musical instruments, so I needed to itemize them. There's a Web-based form to do that: it concluded that we owed $1600-odd for the itemized stuff, and $0.02 for everything else. Wait: two cents for all the non-itemized stuff? That doesn't make sense: if we had an AGI under $15K we would owe $3.00, and the table goes up more-or-less-linearly from there. I filled out the Web form again, and it still said two cents for the non-itemized stuff. Again not wanting to submit a form that I knew was wrong, I did the arithmetic myself and filled in the correct use tax (now $1700-odd) on the state form in TurboTax.
Since I had already filed state taxes, this now constituted an amended return, so I told TurboTax that, paid TurboTax for the privilege of obeying the law, and hit the "e-file" button on both Federal and State taxes. TurboTax said that under NY State law, I can't e-file an amendment to a return that was originally filed on paper. It also pointed out that if your use tax is over $1700, you need to file another state form, which TurboTax doesn't support, so again you need to file your NY taxes on paper rather than e-filing. So I filled out the extra form (which says in large letters that it's about "individual purchases over $25K", which I didn't have, and in small print "or if your total use tax is over $1700"), and printed everything out from TurboTax. The printed instructions say "Do not file this return by mail; under New York State law, if you use software to compute your taxes, you must e-file," which they had just told me I couldn't do, for two other reasons. So I printed the form out anyway, then looked it over to make sure things were right.
One of the lines on the NY State Amended Tax Return says "use tax, as it appeared on your original return" (yes, those words are bold-faced on the form). So I compared the $1700-odd use tax I had computed with what was on my original printed return, and they unsurprisingly didn't match. I couldn't change the original use tax in TurboTax, as it had never asked me for my original use tax, so the obvious answer was to cross off the $1700-odd figure and write in the actual original use tax (on a form that also says "No handwritten notes on this form, except signatures"). Then there was the question of how to put in my correct use tax of $1700-odd; there's no blank for that anywhere on the form, and somewhere in the online documentation I found that you can't correct an incorrect use tax using the amended form; you're supposed to use the Web-based form to pay use tax directly online, separate from your yearly tax return. The same Web-based form that says I owe only $0.02 for non-itemized purchases, and if I believe that number I'm under the $1700 threshold, so I don't need the extra form that TurboTax doesn't support, so I can e-file using TurboTax after all, except that I'm amending a return that was originally filed on paper. But TurboTax doesn't actually know about that earlier return, so maybe I can just e-file a non-amended state form through TurboTax, and it'll get there before the paper form. Nope: once you've told it you're amending, you can't back out of that decision.
Anyway, I spent three hours on the phone yesterday with five different people at the state tax department, most of whom seemed to know less about New York State taxes than I did, and were reading the same instructions I was reading as though they'd never seen them before.
I eventually printed everything out on dead trees and mailed it to Albany, where it'll arrive a few days behind my original return. There's almost certainly something wrong somewhere, so this will get sorted out eventually.
The moral of the story is "Kids, don't try this at home; obeying the law is too complicated for ordinary people to do, so you should always hire a professional to do your taxes."
Some European countries, I've been told, don't make you go through this nonsense: the government sends you a form saying "this is how much we think you made, and this is how much we think you owe; have we missed anything?" You check the "OK" box and your taxes are paid.
Anyway, I started working on our taxes a month ago, and ran into a bug in one particular freefilefillableform: every time I told it "I've finished; do the arithmetic and fill in the rest of the fields," it replaced one of my numbers with zero and recalculated everything else accordingly. Which made our total income off by a relatively trivial $300, but I didn't want to file a return that I knew was wrong, so I filed a bug report and waited for them to fix it. Another minor difficulty: my employer's W-2 lists five kinds of non-wage benefits, but freefilefillableforms has room for only four, so the freefilefillableforms documentation tells you to fill out another W-2 with the remaining benefits (and zeroes everywhere else, lest it throw off your total wages), so I did that.
I came back to the taxes last week. The response to my bug report was "we can't reproduce this problem, so we can't fix it," but I tried the form again and now it worked, so I finished up the Federal form, re-did the State form with the right numbers, and was done on Saturday. We owed the Feds a few thousand dollars, but the State owed us almost exactly the same amount, so I filed the State return first (through the mail, on dead trees), then e-filed the Federal return.
The next day there was an e-mail saying the Federal return had been rejected, for two reasons: first, the amount at the bottom of Schedule A didn't match the amount I deducted on the 1040 (because Schedule A is all about itemized deductions, and the standard deduction was larger so I took that instead), and second, I had zero wages on one of my W-2's (because that's what it told me to do if I had more than four kinds of non-wage benefits). The former could be fixed by simply deleting Schedule A, and I didn't see a way to fix the latter, so I resubmitted to see whether it would go through. I thought of putting in a wage of $0.01 on that W-2, but figured that would raise red flags too.
The next day there was another e-mail saying the Federal return was still rejected because of the zero-wage W-2. Elsewhere on the IRS Web site I found the statement that this was a known limitation of freefilefillableforms: that if you have more than four kinds of non-wage benefits, "find another method of e-filing". In other words, pay a private company to allow you to pay your taxes to the government.
So I started the taxes all over from the beginning using TurboTax, which I had used in some previous years when I sold stock or had other complicated stuff going on. And TurboTax helpfully pointed out some sources of income I had forgotten about, e.g. interest on a non-tax-deferred retirement account, and some small amounts of capital gains incurred between the time money was put into that account and the time it was allocated to its ultimate investment destination. As a result, we owed the Feds somewhat more than I originally thought, and the State owed us somewhat less than I originally thought, so I needed to re-file the state form.
One of the annoying and obscure parts of the New York State tax form is "use tax", where they try to recover sales tax for things you bought from other states and didn't pay NY sales tax for. In most cases you can just plug your AGI for the year into a table that tells you what you owe, without itemizing individual purchases (which is good, because in 2020 and 2021 everybody's been mail-ordering a lot of stuff, mostly across state lines!). Only individual purchases over $1000 each need to be itemized, and added to the AGI-based estimate that covers all the small stuff. As it happens, we made two such purchases in 2021, of musical instruments, so I needed to itemize them. There's a Web-based form to do that: it concluded that we owed $1600-odd for the itemized stuff, and $0.02 for everything else. Wait: two cents for all the non-itemized stuff? That doesn't make sense: if we had an AGI under $15K we would owe $3.00, and the table goes up more-or-less-linearly from there. I filled out the Web form again, and it still said two cents for the non-itemized stuff. Again not wanting to submit a form that I knew was wrong, I did the arithmetic myself and filled in the correct use tax (now $1700-odd) on the state form in TurboTax.
Since I had already filed state taxes, this now constituted an amended return, so I told TurboTax that, paid TurboTax for the privilege of obeying the law, and hit the "e-file" button on both Federal and State taxes. TurboTax said that under NY State law, I can't e-file an amendment to a return that was originally filed on paper. It also pointed out that if your use tax is over $1700, you need to file another state form, which TurboTax doesn't support, so again you need to file your NY taxes on paper rather than e-filing. So I filled out the extra form (which says in large letters that it's about "individual purchases over $25K", which I didn't have, and in small print "or if your total use tax is over $1700"), and printed everything out from TurboTax. The printed instructions say "Do not file this return by mail; under New York State law, if you use software to compute your taxes, you must e-file," which they had just told me I couldn't do, for two other reasons. So I printed the form out anyway, then looked it over to make sure things were right.
One of the lines on the NY State Amended Tax Return says "use tax, as it appeared on your original return" (yes, those words are bold-faced on the form). So I compared the $1700-odd use tax I had computed with what was on my original printed return, and they unsurprisingly didn't match. I couldn't change the original use tax in TurboTax, as it had never asked me for my original use tax, so the obvious answer was to cross off the $1700-odd figure and write in the actual original use tax (on a form that also says "No handwritten notes on this form, except signatures"). Then there was the question of how to put in my correct use tax of $1700-odd; there's no blank for that anywhere on the form, and somewhere in the online documentation I found that you can't correct an incorrect use tax using the amended form; you're supposed to use the Web-based form to pay use tax directly online, separate from your yearly tax return. The same Web-based form that says I owe only $0.02 for non-itemized purchases, and if I believe that number I'm under the $1700 threshold, so I don't need the extra form that TurboTax doesn't support, so I can e-file using TurboTax after all, except that I'm amending a return that was originally filed on paper. But TurboTax doesn't actually know about that earlier return, so maybe I can just e-file a non-amended state form through TurboTax, and it'll get there before the paper form. Nope: once you've told it you're amending, you can't back out of that decision.
Anyway, I spent three hours on the phone yesterday with five different people at the state tax department, most of whom seemed to know less about New York State taxes than I did, and were reading the same instructions I was reading as though they'd never seen them before.
I eventually printed everything out on dead trees and mailed it to Albany, where it'll arrive a few days behind my original return. There's almost certainly something wrong somewhere, so this will get sorted out eventually.
The moral of the story is "Kids, don't try this at home; obeying the law is too complicated for ordinary people to do, so you should always hire a professional to do your taxes."
Some European countries, I've been told, don't make you go through this nonsense: the government sends you a form saying "this is how much we think you made, and this is how much we think you owe; have we missed anything?" You check the "OK" box and your taxes are paid.
