Death and taxes

There is a famous saying that there is nothing certain except death and taxes.  This year, I've managed to avoid both until now, but my overseas 6 month extension on US taxes is nearly over, so I had to sit down and bite the bullet this weekend.  Know how long it took me to do my damn taxes this year?  8 hours.  8 HOURS!  That's a whole freaking work day!  I had to file for both CA and Fed, of course, and there is a grand total of 25 (25! I wish they had caps for numbers!) pages of forms now sitting on my table.

in addition to those pages I had to print to send in, there were literally hundreds of pages of explanations how to do the forms, opened up in different tabs on my computer because I had to bounce between forms.  The 1040 alone was 179 pages long!  Then there were tabs of tables.  The calculations were long and tedious.   For example, this is what you have to do if you have a child:

If you have a child, you can get a credit for child care expenses.  I paid 6K on child care expenses.  I can take up to 3K in a credit.  But then, you have to multiply that 3K maximum by .20, .21, .23, .25, up to a maximum of .35 depending on how much you earn.  Then you have to list the smaller of your salary, your spouse's salary, or the credit, and that is what you can take as a tax break there are 3 pages of forms and worksheets necessary to calculate all this.   Then you can take a child/dependent credit.  There is a whole 4 pages of worksheets you have to do to get this credit.  After this credit is worked out, you can take an ADDITIONAL child credit.

This is calculated by
1. start with 1,00
2 enter amount from line 51
3enter amount from line 32
4 subtract 3,000 from line 4a and multiply THAT by .15
5. enter the smaller of line 3 or 6, put on line 13, then put that on line 65
(this is the easiest of the calculations with the fewest number of steps, so the only one I can be bothered to write down). 

Everything is like that.  there was a worksheet for every line, and every line, and my tax form has 77 lines ( some with a's and b's).  No wonder people do this as a full time job.  One return can take an entire working day to do!

Basically, the government's tax tables charge the people about 12% of their income per year.  But this is over and above the 10% they take out every paycheck for medicare, social security, and CASDI. THe state also gets its cut, from each check AND end of the year. 


I asked my husband why in Japan I never did taxes.  He said it's because the city office (who knows EVERYTHING about you in a very big brother way) already knows all your particulars, so they calculate it for you and take it from your salary and you never even see it.  Most companies know this, so they pay a little extra to employees so the salary they quote you (say, 4 million yen a  year) actually IS the salary you bring home, because you were paid more and that extra was taken out before you saw it.

Imagine, getting paid what you were actually quoted.  I once had a teacher at my school that was shocked at how small her paycheck was and thought I had made some mistake.  I calculated her salary with her, and she said "Wait, you quoted me a salary BEFORE taxes?"  In the US, honey, that's what we do.  We tell you you are going to earn 20.00 an hour, but in reality, you will only be bringing home about 16 of that, and then at the end of the year, you will get taxed on 12% of that, even though you live in the #2 most expensive area in the US, and 16.00 is minimum wage there. 

In Hong Kong, I received a short questionnaire two months ago.  It just asked me who my dependents were, how much I made, if I own property, and about 10 other questions.  It took me about 10 minutes to read over and fill out.  I mailed it back to the government and I will be getting a bill someday.  It's basically 16% of your income, less credit breaks for dependents, but they sort it all out for you and just send a bill.  If you are curious, you can use an online calculator that has all the formulas loaded on it, enter your details, and it tells you what bill you can expect to receive, in case you want to prepare in advance.

Since it's so straightforward and transparent, people usually know what they are in for and put money away every month in special bank accounts especially designed to hold tax money, which pays interest, so at the end of the year, they get a small bump due to the interest.  NO 25 pages of forms.  No tedious calculations. No entering this line on that line and reading 500 pages of explanations how to do the forms.  A short questionnaire, an online calculator, and a bill.  Much less scary big brother than Japan and much less gut-wrenching than the US.   I hate hate hate doing US taxes.

It's all a bunch of crap, too, because most of it is designed to help people find a way to pay less than they "owe"; if you are willing to take the time (or pay someone to take the time), there are all sorts of loopholes and special worksheets to help you not have to pay your fair share.

For example, this year, I got a credit for moving out of the country AND I got a credit for my overseas living expenses; not just the cost of rent, mind you, but all utility bills can be included too. For HK residents, this is a whopping $114,000 credit ( more than people living in Tokyo). I'm happy to take it since it's there for me, but I feel weaselly, because what the hell?  I never got a credit for living expenses while living in the US, but why do overseas Americans get such tax breaks?  Oh, because the diplomats and military folks live overseas.  Can't make THEM pay taxes.  Why can't Americans get a credit for living expenses if they actually live and work in the US?  Why do Californians and New Yorkers get taxed the same as those living in Arkansas with 1/2 the cost of living?   It all total crap designed to help special interests.  I may be benefiting from them this year, but it still pisses me off as a tax paying American that people who don't even live and work in the US get these special considerations, while the people who do live in the US don't get them. It should make you all mad too.  The US is just crazy, crazy, and it's never going to end until the corruption is rooted out, and that won't happen as long as we allow lobbying to be legal.

That's my rant of the day.  Hope it makes you mad too.  As I've said about so many other things, it doesn't have to be that way.