You know, this is a particularly beautiful time of year. Not because of the weather, but because it's the tax season. This is the time of year when just about every working person in America can sit down to do the income tax forms…and become part of something bigger. As University of California Prof. Brian Murphy recently put it, "Through taxation the government drafts us into the service of society."
Of course, it is true that Americans work considerably more "in the service of society" than did medieval serfs. But that was different. Think of it this way: when each of us works from January 1 through about June 6 each year Just to pay taxes, it's more like "everyone working for everyone else." It's so beautiful.
Of course, we can't all wear uniforms yet, as servants of society, but it is extraordinary that we've come so far in such a short time. Why, without the withholding tax that allows government to take our money little by little over the year, present levels of taxation would have long since caused violent rebellion. Well, people never have known what's good for them; that's why we have government and taxes, to make sure that our wealth will be spent correctly.
But enough of such philosophizing. The time is here when we can actually count the good that each of us is doing for society (Form 1040, line 54). So for your benefit (yes, I too love to serve!), I have listed a few pointers on how to better pay your income tax and thus do more for society.
First of all, don't expect any unfair breaks resulting from the so-called "tax reform" passed in 1978. What tax reductions there are actually begin in 1979, so we won't see them until early 1980 when we do our 1979 tax forms. That's so the government doesn't lose too much money, and so our democratic leaders who are running for office at that time (especially the presidential types) can point to the big tax cut they passed in 1978, which we'll just then be noticing.
Luckily, however, society won't be hurt at all by the few tax cuts that were passed. The government's take will be higher in 1979 than it was in 1978, higher in 1980 than it was in 1979, and so forth. We are able to benefit this way because government can cause inflation and thus push people into higher tax brackets, so a larger portion of their income can be taken. Also, Social Security taxes will be skyrocketing, starting in 1979—so thank goodness none of us will have to worry about old age!
• When you sit down to actually do your tax return, be sure to use the handy sticker the IRS provides, which comes with the tax forms and booklet in the mail. The sticker can be put directly on the front of the 1040 where your name goes; it has your name, address, and some numbers. No one knows what information those numbers reveal, but we do know that they help the IRS in processing your return and doing its job. So be sure to use the sticker so the IRS can be more efficient in taking society's fair share away from you.
• If you wait to send in your return until the last week before the deadline (which is April 16 this year), it will be one of millions upon millions of last-minute returns flooding the IRS offices. Chances of returns slipping through unexamined at that time are greatly increased. So be sure to send in your return early so that the tax authorities will have more time to check it and other people's returns.
• Criminal tax-fraud prosecutions are generally the result of taxpayers hiding or not reporting all of their "gross income." On the other hand, excess deductions with just about any kind of cockamamie rationale are only thrown out, with the extra tax and a little interest assessed. If in doubt, be sure not to take a deduction. Make the IRS's job easier; give them more than they may be entitled to. Besides, it's hard for them to catch you: your chances of being audited at all are around one in 25, and even slimmer for getting checked on any particular item.
• Understand that "taxpayers make mistakes." It's a sad fact, but the IRS manual is correct when it says that an agent can find some mistake in 99 percent of the tax returns checked. Even sadder, taxpayers often make mistakes that save them money, especially in the areas of deductions (although mere arithmetic errors will easily be picked up by the computer). If you happen to run into such an area of confusion and ambiguity, be sure to interpret it so the IRS gets the most money. After all, if the mistake is not obvious on its face, the IRS is going to have to expend valuable time and effort and money tracking it down, if it ever gets caught at all. And then, even if it is caught, all that can be done for an honest mistake is correct it and charge a six percent "penalty" on the recovered amount for being such a dummy. So be smart, help out the IRS, don't make mistakes.
• If you take the handy "credit for contributions to candidates for public office" (Form 1040, line 38), be sure it's because you gave to a Democrat or Republican. They put the provision in to help their campaigns, so they should be allowed to benefit from it. And don't give such money to Libertarian or tax-protester candidates; that defeats the very purpose of the credit. You can get it if you gave the money during 1978: a $25 credit if you gave $50 and are filing single, a $50 credit if you're filing jointly and gave $100.
• Many tax experts suggest that if you have a very high deduction in some area, you should attach an explanation to the tax return for the IRS so that the large deduction doesn't trigger a worthless audit. If you have solid proof but don't help them with an explanation, they won't be able to function as smoothly, efficiently, and profitably as they would otherwise. An audit where you have good evidence for the expense will simply cause the IRS to waste time asking you questions about a legitimate deduction. So help them out: every hour spent fruitlessly with you is an hour they could be questioning someone else, someone who perhaps could be squeezed a little more.
And we certainly wouldn't want the IRS, or our government, to be inconvenienced, would we?
This article originally appeared in print under the headline "Taxes: How to Pay Taxes".