Sunday, February 21, 2010

“Making Work Pay”

How many moderate-income people (like me) overlooked the fact that the “stimulus” payments they’ve already received, in the form of reduced payroll tax withholding taken from their paychecks since last Spring, will be yanked back out of their wallets unless they are sufficiently alert and astute to file a Schedule M with their 1040 or 1040A tax return?

How much in labor will it cost the IRS to deal with the inevitable 1040X amended returns that will be filed?

Will the IRS ever get a technical writer with the ability to accurately describe such things in their booklets? When I glanced at the “what’s new” section, I had the impression that I had already received my “Making Work Pay” stimulus, and I had no idea that by writing my check to IRS, I was simply giving it all back!

So, crank up the computer and spend an hour on the 1040X + Schedule M, and you’ll receive $400 for your hour of more tax-filing hell (or, $800 for couples): time well-spent (or, Make-Work that Pays)!

Personally, I would prefer a simpler or at least, more transparent, method of being stimulated. Of the college grads I’ve surveyed, not one spotted this issue during their tax-filing ordeal. But of course, we have the chutzpah to believe that being educated folk, we should be able to manage our “simple” tax situations of no itemized deductions.

Don’t get me wrong: I fully support paying taxes, and even believe that I receive a large return for my payments. But, I do believe that a person of average intelligence and literacy ought to be able to fill out an error-free “simple” tax return without great effort. Unless, that is, part of the program is to support full employment of tax specialists…

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(Image: modified from alviman)

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