Taxes are done, and now you know

For the 43rd year in a row, I've done my taxes. I haven't filed them yet, but the heavy lifting is done. I feel a sense of relief.

For most of those 43 years, I did taxes with a pencil and a calculator, reading the forms and looking up the explanations for the obtuse language of governmental dialect. I remember being surprised the first time I filled out the full 1040 form, instead of the 1040-EZ that I had used in previous years, that the "long form" wasn't so hard.

About a half-dozen years ago, I switched from pencil and paper to over-the-counter tax software. The first time, I grew anxious not seeing the simple progression of filling in the little boxes with income and deductions, seeing how each new entry changed things. But I've resigned myself now to using software that prompts me for each new entry and does all the calculating automatically. Being able to filed electronically instead of waiting for the refund check to show up in the mail is an added bonus. 

It amazes me how many people I know who have reasonably simple returns, like mine, are intimidated out of doing their own taxes, even with the hand-holding provided by tax software. They pay accounts or tax-return professionals hundreds of dollars to do their work for them. Filing basic income tax returns is time-consuming and sometimes exasperating, but it's not arithmetically challenging. The paper returns ask basic questions and require you to fill in a lot of blanks, but it's not rocket science. Tax software (available for around $50) simplifies the process by allowing you to keyboard the entries, producing neat and complete returns.

No one enjoys paying taxes, but this exercise does provide a good review of the previous year's earnings and charitable donations. Did your charitable gifts reach 10% of gross annual income? How much interest did you pay on your mortgage? On property taxes? On child care expenses? On retirement savings? Did your federal income tax exceed your payroll tax (Social Security plus Medicare — FICA)? What did state taxes cost you?

When you're done with the 1040, you know what kind of fiscal year you've had.