Saturday, August 29, 2009

2009 Tax Forms: more ridiculous complexity than ever

And, of course, the IRS presumes that YOU, dear taxpayer, assume the complete responsibility for getting it all right or YOU are at fault.

Link HT: NTU
With all the tax changes (some temporary) congressional representatives have made, Schedule L is hardly the only new form for 2009. "They've always done tax tinkering, but this year they've gone too far, and there's still time for them to do more before the end of the year,'' Hill worries. One new form she deems particularly problematic is the new 14-step "Schedule M--Making Work Pay and Government Retiree Credits."

This results from Congress' creation in the February $787 billion stimulus bill of a temporary $400 per worker tax credit pushed by President Obama. That seemingly simple handout required a whole new form because Congress made the credit more complicated by denying it to the better off; it phases out for singles with adjusted gross incomes of more than $75,000 and couples earning more than $150,000. (For more on this and other phase-outs, read "So What's in the Stimulus for You? Nothing!")

In addition, Congress wanted to send a $250 check to each Social Security recipient and government pensioner but didn't want those who work to collect both the $250 check and the $400 credit, necessitating still more lines on Schedule M. (Those who file a 1040 or 1040A will use the new M; filers of the 1040EZ will complete a shorter worksheet on the back of that form.)