The Joy of Doing Taxes

This weekend I finally bit the bullet and worked on my taxes which are due by the 15th April.

For those who are not from the USA, everyone there has to complete a complex tax form every year and to have it submitted to the IRS by the 15th April. If not, there are dire consequences.

Even though I moved back to the UK at the end of July 2009, I am obliged to file my tax return, which as a US Citizen must include any foreign earnings as well. I wrote a previous article a few weeks ago entitled March Means Tax Preparation Time in which I described some of the complexities of the tax system and my mortal fear of having to fill out the annual tax forms.

Well I procrastinated for several weeks, but finally over the weekend I got my paperwork together and decided on Sunday to work on the necessary forms.

I had done some research on the main tax form, the 1040 last week, and downloaded it ready to be completed. I also had done the same with the 2555 form, which is necessary for reporting foreign earnings, and I had downloaded the instructions for both of these as well.

Everyone in the USA is required to complete a form 1040, but there are various versions depending on this and that and it's oh so confusing, even just trying to find the right one to download.

Even though the standard form 1040 is only 3 pages long, the PDF of instructions is actually 175 pages long! Can you believe that! The form 2555 is another 2 pages long and fortunately the instruction PDF is only 12 pages, but what a lot of gobbledygook and legal claptrap! Talk about confused.

I tell you, trying to sort out what I should put in each box is rather like the old game of "if John has 10 marbles and gives some to Mary, she then has twice as many as June, who has 1 less than Betty did before she gave a piece of cake to David, who is wearing a red shirt today because he gave his yellow one to John in exchange for 6 marbles. What is the color of the middle marble in a line?".

It took me over 4 hours of puzzling over these forms, getting so far with one, then having to transcribe figures to the other, work out complex formulas since I hadn't spent the whole year in the USA or the UK. Enter the value on line 15 into line 23. If the sum of lines 24-29 is less than the number you first started with, take away the lesser of ....

Now I am 55 years old and I suffer with a mild (sometimes a little more than mild) form of attention deficit disorder, plus an increasingly worsening short term memory loss, so trying to remember enough to be able to figure out what they are wanting me to put on these forms is nigh on impossible.

For ages I got a figure wrong, because the wording was confusing, and I had to keep both forms open, as well as the instructions for each form, several other PDF's, an Excel spreadsheet with some calculations, and switching between all of these tabs was driving me crazy.

By the time it got go 8:30pm I was going frantic, and eventually had to call a halt because my eyes were stinging, and my head was spinning as well. I spent most of today with a raging migraine, probably as a result of the stress, but hopefully if I don't get too stuck tonight, I will be able to have everything ready to put in the post tomorrow.

This whole practice is so awful, and I am sure that I haven't claimed everything that I could, but I had the option of trying to complete the forms myself, and risking overpaying my tax, or getting someone in the USA to help me, and paying $250 or more, which would probably offset any money that I would have got back in any case.

Although I will still need to file a tax return next year, since I am a US Citizen, it ought to be a much easier task, well I hope so, since if you spend more than 330 days out of the country in a 12 month period, your foreign earnings up to a limit far above what I am earning are exempt from taxes.

Wish me luck on completing these tonight, but expect me to remain fairly brain dead for the next few days while I recover.

PS: I feel better for having a rant :)