Tax Terms – A Humorous Take To Get You Through Tax Season

Like the four seasons, ever new year brings us a time of reporting and filing taxes. If you listen very closely around the first week of April, you can hear millions of people grinding their teeth in frustration as they attempt to complete this annual task. Half the battle with taxes is understanding the verbiage being used. In this article, we take a somewhat humorous look at some of the common terms you need to know to get through the tax preparation process without going mad.

Adjusted Gross Income – The income that you take in is your gross income. The adjusted gross income is that number minus all the expenses and adjustments you can possibly apply and have the nerve to take after claiming your invisible childhood friend as a dependent.

The Code – The Code refers to the internal revenue code. It is a dark and evil manuscript in which the government lays down the rules of how it will tax your money. The code is so poorly written that some 40,000 pages of regulations are issued interpreting what it says and how it will be used in the real world. The Code is such a beast that it was read to prisoners at Guantanamo as a form of torture. You will experience it when instructions on an IRS form refers to it. You’ll know because your eyes will twitch and you will get an immediate headache.

Tax Credit – This is the Holy Grail of the The Code. A tax credit is a dollar for dollar deduction from the amount you are supposed to write a check to Uncle Sam for. Currently, most tax credits can be found grazing in the part of The Code where housing and green energy clauses are found.

Who would’ve know replacing windows could be so lucrative? That assumes you still own your home.

Tax Deduction – The tax deduction is the great escape of many taxpayers. This is where the gray areas can be found. You cannot deduct breast implants on your tax return, but an adult actress was able to according to a tax court because it was a business expense. With deductions, it all depends on your perspective. One would be how you feel about claiming it while sitting at a desk in your home. The IRS tends to look at it more from the perspective of how you would look hanging upside down in a prison cell.

Taxpayer Rights – You must be joking! No really! You have none. The idea of the government extending you taxpayer rights is somewhat like lions giving water buffalo safe passage across their territory. It isn’t going to end up well and there is probably going to be a lot of blood in the water – not the lion’s!

I would love to tell you there is a simple, stress free way to do your taxes. Alas, that would make me a liar.