A taxing time

time to pay up

Rendering unto Caesar, and George and Arnold

These are the times that tax one's belief in capitalism.

As is my wont, I put off doing my taxes. It's only when I'm sure I will get a refund that I do them ASAP in January. But this year I knew I'd owe some money for California taxes and maybe a few dollars for federal taxes.

Besides, I knew it would be a tedious chore because of my stock trading; every trade has to be entered separately. Not difficult, per se, just tedious. My Microsoft Money will spit out a nice report with all the required dates and amounts, and I use TurboTax to prepare and file the returns. But I had made a lot of trades, and the data entry was going to take a while.

But, it is April, and I decided to just get it over with.

As you go along, TurboTax keeps a running total right up at the top of the screen with how much tax you owe, and this number looked ominous. I reassured myself that it didn't yet know about my deductions and estimated payments. It would be all right, I told myself.

Well, it never did get "all right" — even when I thought I was done it reported a big balance due, including a penalty for not having paid enough estimated tax! Surely there's some mistake!

I printed off the returns and backup worksheets — all 61 pages — convinced that a grievous error would be revealed.

Aha! Look at that! The total from sale of stock is way too big! On second thought, I realized with a shock that it was a reasonable number. Focused only on the net profit (loss) from each sale, I had simply never thought about the total value of the transactions, and I was shocked, simply shocked, at what a huge number it was.

I scoured the pages for the mistake I knew had to be there. Eventually I came to the comparison between 2002 and 2003 returns (TurboTax really is a marvelous program). It revealed what was surely the mistake: my itemized deductions were only a fraction of the previous year's deductions. Whew!

Alas, that, too, turned out to be a dead end. In 2002 I was paying two mortgages and two property taxes, clearly to my tax advantage.

To bring a long story to a close, I am dismayed — and devastated, distraught, and disturbed — to realize that my Trader Paul success of last year means I end up paying just as much taxes as when I was working. Bombay sapphire And the taxes weren't deducted painlessly from a paycheck. No, they are now due and payable on April 15 in a lump sum. A big lump.

I shall have to sell some stock to pay my taxes. Omigawd! Truly a bloody capitalist. And wouldn't you know, the market is in a funk over Alcoa missing Expectations, the disintegrating mess in Iraq, etc. etc. etc.

I must repeat over and over again: I am pleased to pay those taxes, for it means I have been successful.

But I doubt that it will make me feel that much better. I think I'll have a martini.