wherein Liz is convinced the IRS is pulling her leg

[edenfalling]

I did my taxes this afternoon, after forgetting and procrastinating for two months straight. This involves me, a pencil, a cheap novelty calculator, a handful of forms, and a convenient source of caffeine -- I don't bother with software or paid providers, because my income is not very complicated and I rather like math.

Then I did my taxes again. Then I did them a third time. And then I went online to make sure there hadn't been surprise!corrections to the 1040A Qualified Dividends and Capital Gain Tax Worksheet, because I keep getting the bizarre result that I owe the federal government nothing for the 2011 tax year, and therefore I should receive a $1,400 refund.

Which cannot possibly be correct, except every time I run the numbers I get the same answer.

I think I need to adjust my withholding.

(Also the state of New York owes me about $25, but that's minor enough that I don't especially care.)

...

I am going to go calculate everything one more time before I make a good copy in pen. Because seriously, something MUST be wrong with my numbers.

ETA: Aha! I knew there must be an error. And I found it. (The sixth time around, but whatever, found is found.) I do, in fact, owe the federal government $523 for the year, but all that means in real terms is that my refund will only be about $880 instead of $1,400. Which is still a lot of money, and I probably should adjust my withholding anyway.

Comments

[edenfalling]

Good luck!

I think the IRS is a lot less scary than people perceive it to be, honestly. For one thing, they don't have the time, the money, or the staff to go after most minor errors; they tend to concentrate on the ones that are either obviously criminal or will bring them the most money for the least work. For another, well, a few years back I couldn't remember if I'd received a stimulus payment or not and so conservatively assumed I HAD and thus reduced my refund by about $300... which the IRS then sent to me several months later when they noticed that actually, I had not received any stimulus payment and had therefore overpaid them that year. Which was a pleasant surprise!

[lady_songsmith]

Definitely agreed, and they really don't actively try to screw you over. I got a letter with last year's refund that said, ominously, "We have discovered an error..." (or words to that effect) and I was certain it was the EITC. (I still can't quite get over that particular tax credit; every year I read and reread the eligibility and claiming instructions, because I'm quite certain I should not be able to virtually double my refund because... I.... worked? this year?). Anyway, turns out they found a MATH error in my form, and corrected it. Of $8. In my favor.

I think basically honest and well-meaning people work there. Our tax law could use an overhaul so that you don't need a phd to find all your deductions, but the IRS itself is pretty good people.

[edenfalling]

I think the reasoning behind the EITC is that it's better for society if people have jobs and are productive rather than just living off of dividends and interest from investments. But even so, it feels weird. Like, why am I being rewarded for doing what I need to do to survive? Isn't having a roof over my head and food on the table its own reward? But hey, if the government wants to give back some money, who am I to say no!

One of my uncles works for the IRS, in their legal department. My understanding of his job is that sometimes corporations will come to the IRS and say, "We want to do such-and-such, and because of aspects A, B, and C of the tax code, we think this is legal and our rate should be X." And the IRS lawyers look it over and either say, "Yeah, okay," or say, "Actually, because of aspects J and Q, we think your rate should be Y," or even say, "No, because of aspects H and L, we're pretty sure that's illegal." And then the company knows where it stands and the IRS doesn't have to waste money taking them to court later on. (At least, that is how it works in theory. Sometimes the companies decide to ignore the IRS reccommendations, and even win in court! Because our tax code, as you say, needs a phD to untangle.)