Thursday, March 20, 2014

Doing Your Own US Income Tax - Dementia Test for Adults

The USA prides itself on having the most complicated income tax system in the world.  This keeps hundreds of thousands to millions of tax professionals in business and also gives yours truly a chance to solve a difficult brain-teaser every year.  It is kind of a SAT test for adults - if you can do your own US income tax, you still have what it takes intellectually and all those fries you ate as a kid at Woods Friendly Snack Bar have not caused dementia yet.  My income tax involves some tricky cross border stuff so perhaps it is more like an advanced test like MCAT?

I use Turbotax to help with the preparation but even it is not able to handle some of the difficult stuff like the dreaded form 1116.  Form 1116 covers foreign income tax credits, and under the Paperwork Reduction Act, it is officially estimated to take 6 hours to understand and complete this form.  Don't you love it when they name a law the opposite of its purpose?  The "Right to Work" laws are really right-to-fire and the Paperwork Reduction Act generates more paperwork.  Here are some other strange tax laws.
10 Strange But Legitimate Federal Tax Deductions
Efile Online with TurboTax

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