In the Mood for Glenn Miller-- and No Taxes
In blissful ignorance, I wrote the other day that, income tax forms being as complicated as they are, I looked forward to retirement, when I could make a simple tax return on my retirement pay and Social Security benefits, and play Glenn Miller records all day.
Alas, from readers who have already entered that dubious state, I learn that there is no such thing as surcease from the incapacitating paper work required of every taxpaying citizen who tries to do his duty to the IRS.
“What a coincidence!” writes Guy H. Raner of Chatsworth. “As I was reading your line about retiring and playing Glenn Miller records, I was retired and playing a tape of Glenn Miller records.
“But don’t think you can escape the tax man by doing that. Last Sunday I spent two hours with my tax accountant, wading through piles of paper and discussing mind-boggling and arcane tax regulations. Perhaps the simplest of these is the percentage of tax I will pay on my Social Security benefits. . . .”
As a teacher, Raner said, he tried to save money for his later years in IRAs and other conservative investments. But after retiring he found himself paying sizable taxes on his IRA withdrawals. Then he was faced with confusing choices of where to invest the money left him by the IRS.
“I put some of it in conservative stocks and mutual funds, and then when tax time came I discovered the totally confusing distinctions between ‘regular,’ ‘capital gains,’ and partially tax-free forms of income, plus the baffling treatment of how to figure my profit or loss in the sale of stock gained through reinvestment programs. . . .”
Raner happened to own a rental property, and he found the tax laws governing rental property beyond his comprehension. “The tax man tells me, for example, that for purposes of depreciation, I must use the legal-financial fiction that the value of the property has not changed since I purchased it 20 years ago.
“And so it goes. I suppose I can take comfort in the fact that I do have a retirement income that keeps me able to continue buying Glenn Miller records, as well as able to support a tax accountant in some degree of affluence.
“As I sit here at my computer, listening to my records, no doubt my tax accountant is pouring through my papers and wondering if he, too, might some day retire and no longer have to worry about income taxes. Unless he goes bankrupt and ends up sleeping under bridges, I doubt if that day will ever come.
“And that goes for you, too, Jack. Sorry about that.”
“If you feel that retirement will simplify your tax returns,” warns Ronald J. Welch, “are you in for a surprise!
“If you have a retirement income, you will have to determine how much is a return of your contributions, and therefore not taxable. If you receive a Social Security check, additional complications will arise.
‘The only thing retirement will do for you is allow you more time to prepare your tax returns.”
We have already examined the simple 1941 Form 1040A filed by Hal Thornton as a young man in Alaska; now Rex Mugar of Camarillo sends me a copy of the first Form 1040 that was used in 1913.
He says, “I thought your readers might like to know how simple things were before two world wars, a Great Depression, sundry ‘police actions,’ inflation, astronomical debt, the emergence of yuppies and so on.”
The original 1040 had one page of eight questions to fill out. Line 7 gave the taxable income on which the normal tax of 1% was to be calculated. Question 8 was for net incomes of $20,000 or more, which called for an additional tax of 1% for incomes of $20,000 to $50,000, and up to 6% for incomes of $500,000 or more.
“But Jack,” says Mugar, “I have to point out that your solution is the biggest joke of all. It’s impossible for you to get away from the hassle by retiring and living on your pension and Social Security benefits.
“I’ve been trying it for 13 years, and . . . must tell you that the hassle goes on. . . . Be a good boy, Jack, by spending the rest of your days writing the column . . . leaving the tax hassle to your gifted and hopefully uncomplaining Mrs. Smith. . . .”
Over to you, Denise.
