Tuesday, February 17, 2004

Uncle Sam gets blood from a stone

So I put my income tax return in the mail today. I wouldn't actually mind paying so much to live in a free country, but I resent paying that kind of money out so I can get busted for not wearing a seat belt, for pete's squeak. C'mon, is there anybody out there, really, who actually thinks not wearing a seat belt should be an offense? a crime? WTF?

Anyway, I figured, hey, as long as I'm doing my own return I may well do the returns for my imaginary friends while I'm at it.

I have three imaginary friends, Betty, Jack, and Jill. Betty is single but Jack and Jill are married to each other. They each make $50,000 a year. None of them have a lot of stuff to itemize for deductions.

So Betty had a standard deduction of $4750.00, and 1 exemption @ $3,050. These brought her taxable income down to $42,200. According to the tax table, Uncle Sam gets $7,316.00 from Betty.

Jack & Jill, married filing separately with standard deductions only, each have the exact same deductions, taxable income and taxes due as Betty - Uncle Sam gets $7,316 apiece from Jack & Jill ($14,632 collectively).

To make sure Jack & Jill didn't pay more than they have to, I also figured it for them married filing jointly. In this case, their income was $100,000.00, standard deduction was $9,500, and they had 2 exemptions at $3050 each (total $6,100). These deductions and exemptions brought their joint taxable income down to $84,400, putting Uncle Sam's slice at $14,714. This is $82 higher than if they'd filed separately, or $41 higher apiece.

So far I am failing to see any marriage penalty.

BTW, Uncle Sam's friendly advice regarding Line 3 of form 1040 (see page 20 Package 1040-1, 20031040 Forms and Instructions) says "If you are married and file a separate return, you will usually pay mor tax than if you use another filing status that you qualify for." How coy, the way they don't specify what this other filing status may be. For Jack & Jill, however, filing separately seems to be the way to go.

Anyway, just to take good care of my imaginary friends, I thought I'd better do Jack & Jill's return with itemized deductions as well. Frankly, this was the point at which I burst into tears. I probably could have handled it if I'd started with 'married, filing jointly with itemized deductions,' but I started with married, filing separately. Line 36b did me in.

The instructions on form 1040, line 36b, say:

"If you are married filing separately and your spouse itemizes deductions, or you were a dual-status alien, see page 34 and check here."

Page 34, 20031040, says:

"If you checked the box on line 36b, your standard deduction is zero."

That didn't seem right, so I went back to the Spouse line, 6b:

"Check the box on line 6b if you file either (a) a joint return or (b) a separate return and your spouse had no income and is not filing a return. However, do not check box if your spouse can be claimed on another person's return." (page 21, 20031040).

OK, one person shouldn't be deducted on two returns; fair enough. But that poor one person ought to be deductible somewhere! Maybe what the instructions for 36b should say:

"If you are married filing separately and your spouse itemizes deductions and claims you as an exemption or dependent, or you were a dual-status alien, see page 34 and check here."

I'm too tired to figure this out right now - but I do know why 'spouse' rhymes with 'souse.' It's because whoever invented the English language knew those who are espoused would have to get soused to deal with the IRS.

If you figure it out, let me know.


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