IRS rant

[trof]

It's a Catch 22.
We live on a small pension and S/S, which we have to supplement by taking money out of my dwindling IRA each year. Usually about $10,000. In addition to paying taxes on the pension, any money taken out of the IRA is taxed.

Last year, to pay for uninsured/uninsurable Ivan damage we had to take out three times that much. A bulkhead/retaining wall partially collapsed. 19 big downed oak trees had to be cut up and removed. The rootballs had to be removed. The upended rootballs ripped up parts of the asphalt driveway. The pier and dock suffered major damage. You can't GET insurance on any of this.

(OK, you're thinking "This rich bastard has a pier and dock?" We bought here over 12 years ago when prices were less than a quarter of what they are now. And I was working then, and pulling down a pretty decent salary. We is retired po' folks now. I have a full understanding of what it means to try and live on a "fixed income". Mine needs fixin'.;-))

OK, we can at least write off some of the expense as "casualty losses", but...
You first have to deduct $100 from your losses. OK, no big deal. We're talking thousands in losses.
BUT THEN, you have to deduct 10% of your adjusted gross income from your losses. The remainder you can write off.

So we have to pull 200% more out of the IRA to pay for the losses, and then deduct 10% of THAT "income" from the losses we can write off. It's ain't fair. It just ain't fair.

AND...the IRS says if you're in a residentially declared disaster area (like me) they MAY waive all late fees and interest on your return for a year. MAY.

I wrote my worthless repuke congressman to ask for help in getting the IRS to do this. There was no way I could file an accurate return last April. I hadn't been able to get estimates for most of the uninsured repairs by then, so I had no way of giving an accurate estimate of casualty losses. I STILL haven't been able to get estimates for some of it. Waiting lists for contractors are still long, almost a year after the event. And now Hurricane Dennis has sucked up a lot of those in the nearby Florida panhandle.

He helpfully replied that I could file for a 4 month extension. Well I KNOW that. But you still have to estimate what your tax will be, and pay any balance you think you might owe, or you get hit with penalties and interest. I hadn't a clue. Thank you very much Jo Bonner (R) AL.

And here's the topper. The icing on the cake. Because I had soooo much "income" from the IRA? Now I gotta pay tax on most of the S/S.
KAY-RAPP!

So here I am, trying to guesstimate what all this crap is going to cost and get some kind of numbers down and send the forms in by August 15th, and I'M. JUST. PISSED!

Thank you very much for letting me vent.
;-)

[Cathyclysmic]

1. My mom ran into the 'too much' income catch-22

she turns 65 this year..and now she does qualify for all the assitance. Because she has spent her investments for the last 5 years paying hospital bills and buying meds...sucks.

There has to be something we can do for our seniors. I know your typical freepers and 20-somethings want the money for themselves because they think they have it figured out. Well, they don't. Working at a bank for the last few years showed me how bleak it is for these poor seniors. Even the ones with pensions and who invested 'wisely'.

Good luck!

[trof]

2. Thanks Cathy, and welcome to DU.

It really is unfair.
Oh, my company went bankrupt, so my "pension" now comes from the Pension Benefit Guarantee Corp. (PBGC)
They are currently a few billion dollars in the red.

[Cathyclysmic]

4. thanks

[GoddessOfGuinness]

3. Stories like yours really piss me off...

Taking care of taxes shouldn't be a game of My Loophole's Better than Yours.

I'm sorry Trof...:hug::beer::hug:

[trof]

5. Friends say "Jeez, just hire somebody to do your taxes.

It's only a few bucks."

And I say I'll be damned if I'll succumb to hiring a professional to figure out how much I have to pay.
Doing your taxes should be MUCH simpler than that.
The computer programs help a lot.
But still, it shuldn't be that complicated.
:-(

[GoddessOfGuinness]

6. It should be...

I'm in the midst of my own mess, so I can relate to what you're saying.

It seems like the wealthiest hire professionals not only to do their taxes; but to advise them in how to invest so that they can take advantage of all the loopholes that Dumbyass has set up for his buddies. After all, it's deductible....

[WCGreen]

7. I'm a tax accoutant. PM Me

[trof]

8. Thank you. Done.

[ikojo]

9. I understand....but it should make everyone

feel better knowing there are corporations that while they make a good profit, they pay no taxes...

http://www.aflcio.org/corporatewatch/ns09222004.cfm

[gizmo1979]

10. I feel your pain.

mine was a simple problem,incorrect ssn for child they said I owed 1900 bucks.phoned and got it straightened out,they sent me a bill for 3800 bucks plus interest.Still don't have it all worked out.

[Gormy Cuss]

11. Wow. Your other thread of the day, that 900K offer...

Take it and get yourself out of this mess.

It's nice to know you can count on your MOC to give you sound advice (not.) I don't suppose moving to that golf community is far enough away to get a different Congress critter, is it?

[trof]

12. It has definitely affected our thinking.

No, same congressman.
:-(

[DS1]

13. Could you claim a hardship and make your IRA deductions exempt?

?