Taxes for the Woefully Self-Employed

I once read the IRS’ summary of taxpayer “Filing Burden.” In it, the IRS helpfully states, “We hear from taxpayers that preparing and filing tax returns are time consuming and expensive.” I found it humorous that they felt the need to tell us: as if we didn’t already know! The IRS estimates it takes a business-owner 22 hours to file their taxes. I’d say that’s pretty accurate.

Usually I don’t have a problem following the instructions, but every so often I find myself down a rabbit hole of publications because in order to enter an amount on Line Z, I need to read the instructions for Form 2000, which require me to fill out Worksheet A.

Some of the terms in Worksheet A confuse me, and a helpful note at the bottom refers me to Pub. 546 for further information. Halfway through Pub. 546 I realize that this doesn’t apply to me at all and it’s actually Pub. 279, with a handy-dandy Worksheet B, that I need to consult. I complete Worksheet B to determine that my total is zero, which I then enter on Worksheet A, which I still need to complete so I can enter an amount on Line Z of Form 2000.

This year was a good example of one such rabbit hole. I was working on my taxes, reading the instructions, and they said, “If such and such applies to you, go to Worksheet A to find out what to put on line 13.” So I dutifully went to that worksheet and began jotting down my answers on a scrap piece of paper while I looked at the questions on my computer screen (because I didn’t want to print it off). In retrospect this was probably a mistake.

These worksheets always start by saying something like “Line 1: Enter the amount from Line 45 of Form X.” So I started by entering all the appropriate amounts from various other forms and schedules.

Easy enough. Then it said, “Add lines 2 and 3.”

Okay. Next, “Enter -0- if this or that is true of you.”

Then, “Subtract line 5 from line 4.
“Subtract line 6 from line 5.
“Enter $67,450 if single.
“Enter the smaller of line 1 or line 9.
“Enter the smaller of line 4 or line 9.
“Subtract line 10 from line 9.
“Enter the smaller of line 1 or line 5.
“Enter the amount from line 11.
“Subtract line 13 from line 12.
“Enter $483,900 if married.
“Enter the smaller of line 1 or line 16.
“Add lines 7 and 11.
“Subtract line 17 from line 16.
“Enter the smaller of line 15 or line 18.
“Multiply line 19 by 15% (0.15).
“Add lines 11 and 19.
“Subtract line 21 from line 12.
“Multiply line 22 by 20% (0.20).

And SO ON. (I promise I didn’t add any lines to that. Really.) (I did change some of the numbers.)

The text seemed to be shrinking smaller and smaller as I frantically added and subtracted and multiplied, keeping a finger on the screen to mark my place. I felt like I had been through the same circle of calculations three times and all my answers seemed similar. At this point I stopped and looked around the room, half expecting Candid Camera to jump out of my closet:

“Surprise! You’re on Candid Camera. We routed your browser to a fake website with a never-ending list of calculations. Most people suspect us after the first ten lines but you kept going to twenty!”

Wouldn’t it be nice if they gave out tax breaks based on the number of hours spent on taxes?

On that note, sometimes I wish the various lines and worksheets had considerate hints attached to them. Some examples I would find particularly sympathetic:

“This worksheet will be worth $200 if you are able to answer all the questions.” Or, “Don’t bother with this one because it only matters if you make more than $100K a year. Or, “You might make five bucks off this one, but it will take you twenty minutes to complete.”

While I complain about these lists of calculations, I understand that they must (mustn’t they?) apply to someone, though not to me. And thanks to all those lovely publications, I know more about depreciation and social security taxes for the self-employed than I ever thought possible. Oh, and about per diem, and calculating the allowable square footage of my studio, and mileage write-offs, and business use of my home, and…

Well, I won’t bore you with the details.

For an article that may actually contain helpful tax information, check out my blog, “A Tax Checklist for Professional Harpists.”