My Two Percent Worth

I’ve never aspired to be among the fabled “one percent” — our nation’s richest people. Thus I was surprised to learn, as the tax deadline looms, that I’m among the lesser known “two percent.” Seventy percent of tax payers qualify for Free File, a program that provides free tax preparation assistance and software. Only two percent of us take advantage of it. On average, says the IRS, taxpayers spend $261 annually for tax preparation services from companies like H&R Block or Turbotax or accounting firms.

Free File is (incredibly) provided by H&R Block, Turbotax, TaxAct — in all, 13 companies whose best interest is served by keeping our tax system as complicated as possible. Don’t look for Free File on their web sites. It’s a well-kept secret, accessible through the IRS site. It’s not like the limited free services offered from the companies’ web sites for people who are filing a 1040EZ or “simple” return. Free File users can earn up to $64,000, including investment earnings that require additional reporting forms, and they can itemize deductions. To learn why it’s such a hush-hush offering, listen to an entertaining podcast, “Out With the Old,” from On the Media. (Skip the first 12 minutes, then hang on for the full 16-minute interview, including a lively exchange with an apologist for the tax preparation industry.)

I stumbled onto Free File while trying to figure out which tax prep software to buy. I’d decided to try doing my own taxes again after giving up a couple years ago. Despite hiring someone to relieve me of tax-time frustration and stomach tension, I received a notice from the IRS last year that I owed more than $16,000 for 2014. I’d made a reporting error, which my accountant didn’t catch. I consulted a different accountant, who spotted the error within seconds and assured me that what I owed was nowhere near $16 K. She was right, and I learned that dealing with the IRS is not so scary. It requires only patience, a virtue I need to cultivate anyway.

While I chafe at the complexity and blatant inequities in our tax system, I am not, in principle, anti-tax. Taxes are the dues we pay to belong to an exclusive club. Membership in Club U.S.A. is limited to five percent of the world’s population. The many privileges I’ve enjoyed during my seven-plus decades of membership include personal safety and security, 13 years of tuition-free education, and freedom of movement (as long as I stay off airplanes).

I frequently don’t agree with how the club leadership spends my dues, but I have the right to speak up about that. And I have the power to change it — at the ballot box. So I had to smile when I hit “send” on my Free File return.

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If you’ve finished your taxes, you might enjoy this speech by journalist T.R. Reid, author of “A Fine Mess: A Global Quest for a Simpler, Fairer, and More Efficient Tax System.” Could it be true that other countries know how to do this better?

If you’re still fretting over your tax return, you might find this meditation on mindful filing helpful.

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