Monday, April 12, 2010

A Taxing Decision


Here in the U.S., the April 15 deadline for sending in Federal and (most) state tax returns is rapidly approaching.

So, guess what I was doing this past weekend? Emily's and my taxes (including A SPLINT's property tax return, too). For the Federal income tax return, I decided to use the Free File Fillable Forms program; you gather your W-2s, 1099s and similar forms and records, create an account (using last year's Adjusted Gross Income to identify yourself) and then sit down, type out each form and schedule and electronically submit the whole kit and kaboodle, all for free. Plus the IRS notifies you within hours if there is a problem with your return. (Your refund or payment can also be electronic, and can also be just as free.)

Among other things, I needed to fill our Schedule C for A SPLINT. The schedule asks for the nature of the business, which of course is life coaching and presenting. It also asks me to input an appropriate code for the business and I selected one that indicates services.

Schedule C includes a section for "Cost of Goods Sold" and asks for inventory figures. Of course, I don't have any inventory, so I just put zeroes on down the line.

It also asks which inventory valuation method I use: basically, do I say the inventory remaining at the end of the year is worth whatever I had originally paid for it, or do I "mark it down to market" and just say it's worth the going price at the time if the price has gone down, or do I use some other method? And if the latter, could I please attach an explanation?

I don't see any space to type in an explanation, or any way to upload a document. But, I figure, the business type explanation - both verbal and code number - plus the zeroes for all the inventory figures should give the IRS enough of a clue that this question doesn't apply to A SPLINT. So I click "Other method," merrily (hah!) finish our return and other schedules and submit the package.

A few hours later, I get the dreaded email: My return has been...


Because it didn't have an accompanying explanation for the alternative inventory method.

Heavens above, what's going on here? Why is the IRS kicking back my return over something that doesn't even matter in my case?

This looks like a clear issue of principle to me: The IRS has no right to make me re-do my return over an issue that makes no sense.

Indeed they don't. On the other hand, if I just jump through their extraneous hoop and select an inventory method (after all, if I have no inventory and the question therefore doesn't matter, neither does my response), they'll accept my return and I can move on to other things.

So, I in effect promised the IRS that in the event my nonexistent inventory declines in value over the year, I'll mark it down to market. I see no point to the obstacle, on the other hand if I can get around it as quickly as clicking another box for an answer which, for that very reason, commits me to nothing anyway...

Expediency 1, Principle 0.

One of the things running a business does for anyone - including an Aspie - is rack up some points for the Expediency team. I just don't have the time anymore for some of the stupid donnybrooks I used to get into.

What do you think?

1 comment:

Tanya @ TeenAutism said...

I use an online tax service for about $20, and it's a big help with all the forms. Glad that you came up with a solution for yours!