Category Archives: Taxed Again

65 Cents Lost

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I found 65 cents on the road this morning. Since that’s a nickle more than I made in an hour on my first job, I was aghast.

Marlboro Reds
This poor, abandoned pack of smokes fell out of someone’s pocket to be run over by at least one small truck.

I always hated it when the pack fell out of my shirt pocket but I hated it even more when it was my Zippo lighter and I was on the boat. If you find a 40-year old Zippo in the grassy bottom at the bend of the Chester River at Devils Reach off what used to be a corn field, it’s mine. It will probably still work.

Regular readers may recall that I quit smoking for my birthday in 1976, in large part because it had gotten so expensive. I smoked Between the Acts, a little cigarette-shaped nicotine delivery device (NDD) made with cigar tobacco. It was a convenient package because one could smoke an entire “cigar” during a short intermission. I liked the taste and the fact that they cost only 35 cents per pack because cigars weren’t subject to the same taxes as cigarettes.

Minimum wage was $2.30/hour in 1976 except for farm workers. Farmers reached parity with nonfarm workers in 1977 but anyone “working for tips” such as restaurant staff and theater ushers remain uncovered by minimum wage laws.

Marlboros (we didn’t have to call them “Reds” in 1976), jumped to $5/carton that year on state taxes and the state legislature planned to add the taxes to cigars like mine.

Minimum wage smokers then had to work about two-and-a-half hours, after deductions for Social Security and a dime of income tax, to buy a whole carton of cigs.

I called the local drug store this morning. That single pack of Marlboros cost $6.03 plus state and local sales taxes for a total price of $6.48 here today. Embedded in the price (and therefore doubly taxed) is $1.339 per pack in excise taxes. In 2013, the same pack of smokes cost $6.00 here in Florida, down 5% from $6.29 in 2012. Last summer, Florida prices came back up 5% to $6.30. We won’t even talk about New York where that same pack would cost you $12.85 or more.

All told, that’s $65 per carton here today.

Every year, the Awl “checks the prices of cigarettes in all fifty legally recognized states of this fair Union.” Founded in 2009, the Awl publishes “the curios and oddities” of the Internet.

The 2015 minimum wage in Florida is $8.05 per hour, with a minimum of at least $5.03 per hour for tipped employees. Plus tips.

Minimum wage smokers today need to work about ten hours or a quarter of a work week, after an 89 cent deduction for Social Security and Medicare and another half a buck of income tax, to buy a carton of cigs.

So I have to wonder, How does anyone afford to smoke, let alone to lose, cigarettes?

 

“Taxes? We Don’t Pay No Steenkin’ Taxes”

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Especially not today!

The Internal Revenue Service filed a tax lien in the Forsyth County Hall of Justice. That’s not too too unusual.

The IRS automatically has the lien as soon as it notifies a taxpayer of back taxes owed. If the taxpayer neglects or refuses to pay the debt on time, the IRS then files a Notice of Federal Tax Lien to alert creditors that the government has a legal right to all of that taxpayer’s property. All of it.

Robert De Niro was hit with an IRS lien for $6.4 million. Martin Scorsese for $2.85 million. Al Pacino for $188,000. Melissa Harris-Perry for about $70,000. These were for delinquent taxes.

Ms. Harris-Perry hosts MSNBC’s Melissa Harris-Perry weekend morning show. She holds an endowed Presidential Chair in the Department of Politics and International Affairs at her alma mater, Wake Forest. In case you haven’t heard Ms. Harris-Perry on the air, here are a few quotes:

“American tourism will ruin Cuba.”
“The term ‘ObamaCare’ is racist.”
“Rich people don’t pay their fair share of taxes.”
We “plan to pay off [our outstanding] tax debt as quickly as possible.”

The Winston-Salem Journal reports that Ms. Harris-Perry said that she and her husband plan to pay off the rest of the tax debt as quickly as possible.

Oddly there were about 38,900 results in a Google news search for Ms. Harris-Perry. MSNBC is not listed in the search results as covering the story. Not once.

Odd?

She’s not the first MSNBC in dutch with the IRS. MSNBC darling the “Rev.” Al Sharpton also has more than $4.5 million in current state and federal tax liens. Of course, Mr. Sharpton doesn’t pay anyone. Not travel agencies, not hotels, and especially not landlords. Seems like Mr. De Niro, Mr. Scorsese, Mr. Pacino, and Ms. Harris-Perry are more like Mr. Sharpton than we realized.

 

So, Rufus, Have You Started Yet?

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April 15. Wednesday. Midnight. 60.0 hours from right now.

7% of people receiving a tax refund will “fritter the money away” on a shopping spree or vacation according to a new Bankrate.com poll.

“Cuz pleasure is bad. It’s so … frittery,” Liz Arden said.

Exactly. Our Victorian more, except most (well-to-do) Victorians seemed to want more.

A new-to-me camera is not frittering.

Rufus just bought a Fishman Aura Spectrum DI which has cool samples of jumbos, dreadnaughts, OMs, 12 string guitars and more to blend with the output of his guitar.

“I’m very excited to get this (used, of course, about 1/2 the price of new),” he said. “It’s an everyday necessity.”

I agree, but neither of us exactly needs more stuff.

The real news is that only 7% of “recession weary Americans” are frittering. A whopping 84% of Americans receiving refunds intend to pay down debt, save or invest their “windfall,” or use it for everyday necessities, according to that poll.

“Taxes ought not be so difficult or expensive to figure out and pay.”

SWMBO and I don’t make a lot of money. In fact, now that we are on what is laughably called a “fixed income,” we really don’t make a lot of money. Still, we live in different states from each other and have a couple of separate very small businesses so Uncle Sam and the great state of Vermont have trained me to dread April.

I do my own taxes.

I used to be able to do it with a calculator and some scratch paper.

After a while, it just got easier to do them with a spreadsheet on the computer.

After a while, all the rules changes made it too tough to do with a spreadsheet on the computer so we switched to Tax software. I’ve experimented with most of the major programs and settled on TubboTax™ as the least bad of the bunch.

Here’s this year’s tale of woe:

February 20:
I loaded and started work in Tubbo. Irritating program; I tried opening the files from prior years with it so I could fart around with some Vermont demands but no joy.

Then I started in on this year’s. No joy there, either. For example, I bought a new, under-$200 printer that has to be depreciated. Tubbo wouldn’t let me close the asset entry worksheet because I apparently made a mistake in my SDA elections. I don’t even know what a “Special Depreciation Allowance” is, let alone why I have to elect it on a sub-$200 piece of office equipment. All I know is that I checked exactly the same boxes on the printer this one replaced.

The help was of little, well, help.

Time passed. I entered stuff.

I’m a Florida resident. I have no remaining connection to Vermont except a spouse who is a Vermont resident. I live here. She lives there. We file “Married-Separate” because we have separate households.

Vermont sent her a letter demanding my returns for the last three years. I’m a Florida resident. I have no Vermont income. None. Vermont says we need to file “Married-Joint” because we’re not, well, separated.

March 7:
“I haven’t started my taxes yet,” Rufus said.

Form 1040I started the joint return with Anne as the primary filer, then did a dope slap because I live in Florida.

Converted the self/spouse thing. I think. Tubbo has no way to switch the primary filer on a joint return. I don’t know why Tubbo has no way to switch filers. It’s a database. It’s a check mark. It should be trivial. Tubbo has no way to switch filers.

I thought I had gotten Tubbo to recognize everything. That turned out to be not quite correct.

My friend Fanny Guay bought an ObamaCare policy. She filled out the HealthCare.gov questionnaire which asked for last year’s income and got a $529 monthly “discount” that brought her premium down to $34/month. Cool, huh?

She had no idea that the “discount” was in reality a Monthly Advance Payment of the Premium Tax Credit.

She filled out her 1040 online and was blown away when the IRS wanted $3,800 of that Advance Payment of the Premium Tax Credit back. See, last year Ms. Guay and her older hubby hadn’t taken a large IRA distribution. This year, they did. Her income changed and that changed the premium.

Ms. Guay got screwed.

March 23:
“I haven’t started mine yet,” Rufus said.

SWMBO’s Vermont return uses a “recomputed” 1040. Tubbo shows me as not over 65 as of 12/31/14 (I was). It included a Federal Schedule K-1 (neither of us got one). It gave us a $2,485 self-employed health insurance deduction (that doesn’t appear on any other Form 1040). And it created a Vermont Credit for tax paid to another state. Alabama. (We really really don’t even drive through Alabama.)

April 4:
“I haven’t started mine yet,” Rufus said.

I spent the day on picayunia. I still don’t know how to fix Tubbo’s belief that I’m not 65. I overrode their selection. And, since I paid a few bucks as a 15% foreign tax to Canada, I reckon I should file Form 1165 to maybe get a credit for it. Nupe. Not according to Tubbo.

I sent SWMBO a review copy of her Vermont return using a 70 cent Great Spangled Fritillary.

April 5:
“I should start my taxes,” Rufus said.

I spent even more time convincing Tubbo to use the same numbers in the recomputed copy as the Joint copy of same exact tax file.

April 11:
“I, um, haven’t started mine yet,” Rufus said.

E-filing was as screwed up as the rest of Tubbo. I started with [Click here to e-file] that evening and didn’t finish until 12:10 a.m.

At the end of the process, Intuit asked if I’d like to rate my experience.

[OH BOY!OH BOY!OH BOY!]

The link took me to intuit.com and the page never loaded. It said LOADING… but that was it. No progress meter. Nothing on the progress bar. No new page showing. Nothing. LOADING…

In between, they decided to send my refund to some broker instead of the bank, thought SWMBO’s PIN was mine and vice versa, and reversed our addresses. Maybe. Or they think “Swmbo K Harper” is “Dick” and “Richard B Harper” is “Swmbo.”

And, natch, IRS rejected the return.

F1040-526-02 – If you’re Married Filing Jointly and you’ve entered an e-filing PIN, you must enter your spouse’s date of birth or, if deceased, your spouse’s date of death.
F1040-525-02 – The Primary Taxpayer Date of Birth or Date of Death is missing. Please review your return and make the necessary corrections.

Both our dates of birth are plainly in the return, right there on the Info Worksheet.

I finally figured out that Tubbo does not store the nicknames in any accessible form. They go in about six steps down during the step-by-step “interview.” I had to run the interview again to change that. It seems to have fixed the birth date glitch.

One might expect something as important as a birth date to be tied to the same field as the Social Security number.

The Tubbo help system had no knowledge of how to change a nickname. The Tubbo help system had no knowledge of how to swap primary filer. The Tubbo help system had no help.

!@#$%^Tubbo. The !@#$%^Comcast of tax returns.

It would have been easier to print and mail. A lot easier. SWMBO mailed hers today.

!@#$%^Tubbo.

Anyway, I found the nickname source on my own, corrected that and a couple of otter glitches, and refiled. Success to the extent that the IRS accepted the return. I wish I had some idea of what is in the data stream.

What’s the bottom line?

“I, um, haven’t started mine yet,” Rufus said.

A flat tax would solve this. We’d never need !@#$%^Tubbo again.

In 1980, I spent about 16 hours putting together a 9-page tax return. In 2015, I spent about 80 hours putting together an 18-page tax return. And I have no idea of what is in the data stream @#$%^Tubbo sent to the IRS.

60 hours to go. Have you started yet?

April 24 is Tax Freedom Day this year, a day later than 2014 and four days later than 2013.
Yeppers, the economy is booming.

 

Individual Income

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Vermont might not tax income received by a non-resident of Vermont. Except when they do. From Vermont’s “Find more information…” pages.

Non-Resident Income From Web or Internet Activities
“Income received by a non-resident of Vermont is not taxed by Vermont when the income results from activity necessary to create or maintain a world wide web page or internet site for the non-resident…

“Income received by a non-resident through a partnership, limited liability company or trust also is not taxed by Vermont if the entity’s activities in Vermont are limited to the above activities and no other activity of the entity creates nexus with Vermont.”[emphasis added]

I’m really wishing that the Vermont Tax Department didn’t feel the need to tell us that a non-resident’s non-Vermont income is not taxed by Vermont under these conditions because it reminds me that the Vermont Tax Department figures it can and will tax a non-resident’s non-Vermont income under those conditions.

 

Grubergate

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Yesterday’s Burlington Free Press editorial says, “First get Vermont Health Connect right.”

Editorial Page Editor Aki Soga is right that the “relaunch of the Vermont Health Connect online insurance exchange is a crucial test for Gov. Shumlin’s efforts to bring a single-payer health care system to Vermont.”

It is a crucial system test but not the right test.

Let’s recall how we got here.

Dollar Sign• 1994: Then-Gov. Howard Dean tried unsuccessfully to institute a single-payer system with then-Sen Peter Shumlin’s support.
• 2009: “If you like your plan you can keep…” Uh huh.
• 2010: Candidate Shumlin outlined his plans for a single payer health care system in 2010.
• 2012: Gov. Shumlin hired CGI Group (the same Canadian ne-er-do-well company that crafted the extraordinary healthcare.gov debacle) to do it on a smaller scale in Vermont. Vermont paid CGI about $67 million.
• 2014: Gov. Shumlin rehired Obamacare architect Jonathan (“stupidity of the American voter”) Gruber for an extra $400,000 in July to study how Vermont could squeeze an extra $2 billion out of taxpayers to fund the statewide single-payer health-care system. (Mr. Gruber also drafted much of the original single-payer system proposal in 2010.) Sadly, Mr. Gruber has never known when to shut up.
• 2014: Gov. Shumlin hired some third graders who failed arithmetic to run Health Connect billing.

I haven’t had insurance under Health Connect/Obamacare for many months. I think the third graders have stopped billing me for it although the arrearage they “calculated” for insurance I haven’t had was in the thousands of dollars.

That could have been the chosen Gruber method: bill people who don’t even have coverage for insurance premiums they don’t owe. It will take only 333,333 Vermonters paying in an average of $6,000 to come up with that $2 billion.

It is a crucial system test but not the right test.

The right test answers these three simple questions:

Does the system cover me?
Does the system improve medical results?
Does the system reduce health care costs?

That’s a system that Vermont’s liberal economists are incapable of planning (“all we need is to find $2 billion in new ‘revenue'”) and Vermont’s liberal politicians are incapable of implementing (“all we need is to find $2 billion in new ‘revenue'”).

It’s too bad Vermonters have to suffer through Grubergate with the rest of the nation, but when Vermont’s political left wants to sleep with the big dogs, they are bound to get fleas.