Am I the only person in the world who has never heard of “Tax Literals” before? I am a literal person, but I think that title leaves something to be desired. Here is the chronological breakdown of my tax time saga (a.k.a. Tax Return Lessons 101):
1. I decide to again do my taxes myself this year. Perhaps I am still scarred from my bad experience at H&R Block several years ago, and how they misquoted me the amount that I would pay as a single person with a very easy return.
Form 1040A, 2005 (Photo credit: Wikipedia)
2. I gather my tax forms from the library, do a rough draft of my 1040A form, and get delayed in finding and printing the amount of interest I paid on qualified student loan payments. I speculate about the IRS updating tax codes to be more fair to the tax payer. I think it is 100% unfair that the 1098-E is not furnished by mail to individuals if the lender doesn’t receive interest payments of $600 or more in a year. Plus, why is the Earned Income Credit (EIC) for people who work so vastly different for single people vs. people with children? A single person doing a 1040A for 2012 must make less than $13, 980 (per 1040A, line 22, adjusted gross income or AGI), but a person having one child living with her or him can make an AGI of less than $36, 920. (Note: this is actually just step 1 to pass to see if a person qualifies for the Earned Income Credit). Why the disparity? It seems the American tax code greatly favors people with children over single people on multiple levels.
3. I file online using free fillable forms. They are essentially the electronic version of paper federal tax forms, but they can enable you to get a much faster refund since you electronically file.
4. I dislike how some of the free fillable forms are counterintuitive. You can’t actually add your W-2’s when clicking on the upper tab to add forms, because you must click step 2 to do that. In addition, (from what I can tell), you can’t move to step two by clicking “done with form” at the bottom of your 1040A, you have to click on the top “step 2” to go to step 2. This seems illogical to me, because if you are done with a form, then you should be able to click “done” and move on to the next step. Plus, am I the only one who noticed how when a person types in her information on her W-2’s and uses the tab key, then it will jump numbers and not be perfectly chronological around the 12-20 fields? I don’t like that filling out the W-2 seems to work backwards and out-of-order.
5. I am happy to have my refund submitted electronically to the IRS after time spent surfing FAQs to answer e-file questions using free fillable forms.
English: Speech balloons. Question and Answer. Icon for FAQ or Help. (Photo credit: Wikipedia)
6. What?!!! My refund was rejected? I have e-filed my own taxes for around 5 years, and that has never happened. Here is part of the e-mail to tell me of my refund rejection: “To see a list of the most common reasons for a rejected return go to http://www.irs.gov/uac/Common-Free-File-Fillable-Forms-Problems You will need to fix the issue in your return and e-file again. If you are unable to fix the issue you will have to print the return and file by mail.” (E-mail from email@example.com)
7. Thus begins my search for why my refund was rejected. I realize how”Tax Literals” seem to be at the root of my rejection problem. Essentially, tax literal problems are caused by putting something into the small grey box areas on the tax return that does not belong. A person has to be instructed to place information in those areas. Utilizing the link sent to me in my rejection e-mail about common tax problems, I link to the IRS website and find a helpful link, the FAQ document for Tax Literals. However, I notice this IRONIC line about tax literal information on the official IRS government website. (Note: editing done to bold typographic error).
“In the example above, the rejection was caused by using an incorrect state abbreviation on Form W2-G and yopu would look on that form to correct the information.” (http://www.irs.gov/pub/irs-utl/2012_4f_faqs.pdf) (Free File Fillabe Forms FAQS and Limitations, February 28, 2013).
8. I realize that line 7 (wages, etcetera) was where my mistake was made, so I fix the error and re-submit my tax return.
9. Yay! My return was accepted! Is this the never-ending story, or what? Finally, my tax return saga is over!