<p>Please.</p>
<p>Let’s shrink the tax code.</p>
<p>It would be fun to do a QA analysis and code review of the IRS’ software. The IRS, courts, lawyers and law writers have trouble figuring out what the laws mean.</p>
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<p>I can remember since the 1980s people saying we should shrink the tax code, but no one ever does it. It’s like winning the lotto jackpot, it will never happen to me.</p>
<p>I don’t remember who said it (maybe Steve Forbes) but Congress derives part of its power from the tax code. Who wants to shrink their own power? In the past, we create agencies to implement social and economic policies. We still do that but we often dump part of the financial part on the IRS.</p>
<p>I think that the availability of software helps in increasing the tax code. There are lots of people using very sophisticated software today and it’s fairly cheap and actually free for those that care to use the free packages. I would guess that a lot of this software has bugs in it and that the IRS ignores a good chunk of that because the costs to examine returns individually is quite high for low-dollar-level returns. How much money can you really spend on creating good tax software if your revenue is a bunch of ads for tricks in lowering your car insurance or losing belly fat?</p>
<p>I think that most people just do the best that they can with the software and send in their return hoping for the best and that the IRS doesn’t have the resources or even the understanding of the tax code to catch problems.</p>
<p>I remember a seminar about how ESPP tax reporting was supposed to be done several years ago. The law is complex and you have to keep records for several years because there are three different kinds of tax treatments that you have to follow for different holding periods. I imagine that most people just punt - that is toss in a number that’s convenient on some form - they don’t actually try to figure out which treatment they should use or go back and find records from several years ago to get the right cost basis. ESPP is tricky because it’s usually the lower of the beginning and end dates of the period.</p>
<p>Got the MLP resolved. The main problem was trying to work on two problems at the same time. Working on just one with a clear head made it simpler. I skipped taking a few of the deductions because the format that they gave me to calculate them was awful so I’m leaving a few bucks on the table but I’d just rather be done.</p>
<p>Now, onto Foreign Tax Credits.</p>
<p>Sounds like a pain…</p>
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<p>GAACK! I had to deal with this problem this year. I have been planning for it for at least a year, so I had all the facts that I needed at hand. It took a GIGANTIC spreadsheet and then some finagling to make sure that the tax software was being filled out correctly. </p>
<p>And then the adjusted basis numbers don’t match the basis numbers on the brokerage statement…I don’t know if that will be a red flag to the IRS that will get them to pick my return out to be audited. </p>
<p>You and I must be involved in similar MLPs, BCE…I finally figured out how to use the tax software only to figure out that the investment led to a $2 loss. A $2 loss–and I have to fill out 4 extra tax forms? I just listed the interest and dividend income and skipped the rest…</p>
<p>^^Had to laugh (or cry?) - I faced a similar situation a few years ago. Back then it was NOT FUNNY.</p>
<p>Ok…I see that QRE is based in Houston and it is a Delaware Corp…good…</p>
<p>I want to stay away from the foreign stuff…</p>
<p>I don’t know if turbo tax is doing my stuff correctly particularly in regards to rental income. There are different depreciations, how things are amortized, carry over losses etc. I’ll just keep my fingers crossed and hope things are right - particularly in the future when I will be selling some of these properties.</p>
<p>The complexity of the tax code is NUTS! But then most people in the US don’t have complicated tax returns…typical income, typical deductions, a little wrinkle every now and then (tuition credits/deductions, for example). Thank goodness…</p>
<p>ellemenope, if our leaders had to fill out tax forms by hand, without any help from anyone, just the complex tax code as the only source of information, I think they would have done something about it… pronto. I hate doing taxes, and my returns are not THAT compex! I recall the year I had to deal with multiple ISO transactions, NQs, AMT, self employment, 100’s of trades, wash sales, etc. - I went nuts.</p>
<p>If MA returns are any indication, filling out taxes will get harder with healthcare reform.</p>
<p>My MLP made money but I don’t even care about the money any more. I took the depletion because TurboTax used the default 15% allowance. The chart they give you is a triangle going by month, 12x12. You’re supposed to take the dates when you bought and sold and use the table to find the percentage depletion (or other expense) and then multiply it by the number of shares. Of course if you traded it frequently, this becomes a nightmare. So I skipped administrative and some other expenses because I really didn’t care at that point.</p>
<p>I traded MWE and was surprised to get a K1.</p>
<p>I hate K1s.</p>
<p>More stuff to handle.</p>
<p>At least K1s give you the amounts.</p>
<p>True…</p>
<p>I got through one set of foreign tax credits without too much pain - just two companies from the same country. It was relatively straightforward - BTW, learning how TurboTax does things where multiple forms are needed helps. I’m getting used to their multi-form approach. It’s also quite easy to google for solutions - I just put TurboTax and my question and this has worked everytime so far.</p>
<p>One more brokerage to go and then one more individual company to deal with and then I have to put in the accounts that don’t do any US reporting and then I’m done with Federal and then off to FBAR and NH return!</p>
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<p>Seriously true, LOL!</p>
<p>I finished the Federal though TurboTax is complaining about some dividend entry that has a problem. It appears that I entered a dividend entry part-way and then deleted it but TurboTax apparently still has the record fragment around. I can’t access the entry as the Q&A says that it doesn’t exist. I guess that it’s a bug.</p>
<p>I went to E-File and was excited about getting a quick refund and then it said that I can’t E-file because of something in my return. I guess the IRS hasn’t programmed everything for E-Filing. I’m actually amazed at the number of pages in my return this year. It doesn’t seem that complicated to me but the list of forms is quite long.</p>
<p>The IRS seems to be buried in work. From new legislation, to having to scan forms in because you can’t E-File, to they rampant identity theft problems that they have to deal with. Looks like I’ll have to Print and Mail. At least I won’t be at the Post Office on Tuesday at midnight filing for an extension. Actually I don’t know if there are any more post offices in our state that do that.</p>
<p>Now onto the State Return and the FBAR.</p>
<p>I took today off from looking at anything related to my tax return.</p>
<p>BCEagle91…Doing all those returns for all the different entities…just isn’t fun for me…</p>
<p>I’m done. I’m responsible for 14 returns, many of which are intertwined. Thanks heavens for getting a really good accountant.</p>