THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, April 14, 1996 TAG: 9604110144
SECTION: CAROLINA COAST PAGE: 06 EDITION: FINAL
TYPE: Editorial
SOURCE: Ronald L. Speer
LENGTH: Medium: 75 lines
The good folks who figured out the American way of paying taxes were no dummies.
They've managed to make us all feel good each April 15, despite all the money we never see and the agony of trying to comprehend the instructions on the federal and state tax forms.
They've done it with a system that overtaxes most of us throughout the year, and then gives us a token refund.
And so Monday, millions of us will ruin our minds reading government gobbledygook just barely beating the deadline for filing tax forms - and still be delighted.
You'll recognize us right off.
We're the kinfolk or the colleagues or the neighbors who'll greet you with a smile Tuesday morning.
``Boy, '95 was a great year,'' your boss will say. ``I'm getting more than $700 back from the feds and $200 back from Raleigh.''
And she'll dance around the office all morning, celebrating her good fortune.
``How much did you pay in state and federal taxes?'' she might be asked.
``I don't know - but I told you I'm getting more than $900 back.''
That's the only figure that counts. No matter that maybe she paid $20,000 in federal tax and $7,000 to the state.
We don't think of a refund as a return of our own money - we treat it like an unexpected bonus from a generous relative.
But if we have to pay MORE taxes on the 15th, we'll whine forever.
So somehow the tax people find a way to take out too much week after week, and then delight us by letting us discover that, after all, Uncle Sam's a super guy - he's sending us a refund providing we can figure out much we get back - or owe.
The smart folks, who know how much damage we do our brains by trying to interpret tax forms, hire someone else do their taxes.
I figure that even a country boy like me ought to be able to determine how much of my pay should go to pay the government's bills.
So year after year I clear off the kitchen table early in April, gather up my records and open up the good old 1040 booklet.
But despite figuring my taxes for more than 40 years, my mind goes blank when I start to read the fine print.
Let us, for example, try to deal with ``Nontaxable distributions'' as the good booklet calls them. Here's how they are described: ``Some distributions are nontaxable because they are a return of your cost. They will not be taxed until you recover your cost. You must reduce your cost (or other basis) by these distributions. After you get back all of your cost (or other basis), you must report these distributions as capital gains. For details, get Pub. 550, investment income and expenses.''
I've never had the courage to check out Pub. 550.
But let us delve into Partially Taxable Pensions and Annuities: ``If your pension or annuity is partially taxable and your Form 1099-R does not show the taxable part, you must use the General Rule to figure. . . ''
The General Rule? I got a feeling that ain't the same as the Golden Rule. But I'll probably never know.
Fortunately, my funds come from simple sources, so I don't have to wade too far into the tax form books. But I did have to solve this puzzle in the Carolina primer: ``If you itemized deductions on your federal return, you must add to your federal taxable income the amount of any state and local income taxes claimed as deductions on your federal return to the extent your itemized deductions exceed the standard deduction without the federal inflation adjustment.''
You bet.
Nevertheless, it's been a great year taxwise. I'll be getting more than a thousand dollars back!
Why are all those people are calling for a simplified flat tax? by CNB