Tuesday, March 23, 2004

Death By Taxes

I went today to a tax preparation service and had them do my taxes. Fortunately for me it was free; I had gotten a coupon for a free tax return in my box at the charter school.

I usually do my own taxes; they are surprisingly easy. The 1040A is no harder than the FAFSA (financial aid form for college) and if you are just an average family with no special circumstances and don't itemize deductions, everything is really a piece of cake. But last year, I sold the only investment I've ever had-- a few shares of stock my grandfather gave me when I was 10 years old. They weren't worth much-- about $500-- but we needed the money at the time. The company in which I had stock was being bought out by a larger company and I had to transfer the shares anyway, so since I had the opportunity to sell it at that time without any broker fees, I took the opportunity and sold the stock. Now I don't know anything whatsoever about stock, except the basic idea of how the stock market works. When I went to do my taxes, though, the manual said I'd have to file a 1040 and a Schedule D because I had capital gains or something.

Now, I've got an advanced degree in mathematics, but I have to admit this Schedule D had me stymied. I'd have had more success trying to prove Goldbach's Conjecture. I read the manual over and over and over, and basically it said "The stuff on this form you were sent by the company goes here, here, and here. Unless, of course, you have some obscure thing going on, which of course you would have no way of knowing whether you had it until you get audited. If you have this obscure thing going on, you should do X, Y, and Z. But be careful, because there are exceptions to this-- sometimes things that are this obscure thing are not really this obscure thing and belong on THAT line instead... but again, you have no way of knowing yourself..."

All this for some $30 of "capital gains"...

If taxes are so damn complicated that people who figure out complicated things for a living can't figure out how to do their own damn taxes because they do something so simple as sell some old stock, something is seriously wrong.