This time of the year is a very taxing one here in
Chirish-land and throughout the US as across the country, the good folk of
America race to meet the April 15 IRS deadline and file their income tax
IRS stands for Inland Revenue Service but other popular
alternatives are Infernal Revenue Service and Income Removal Service. No doubt Chicago’s most notorious resident Al
Capone would have had his own version after finally being caught, not for his illegal gangland
operations, but for failing to file his taxes.
Along with learning how to navigate health insurance options,
understanding tax requirements has to be one of the biggest challenges to
living this side of the Atlantic. There is one basic rule we quickly learned –
if in doubt, pay it out. Unpaid taxes are a thing to be feared here, attracting
penalties like Al Capone’s enemies attracted bullets.
In the UK, we file our taxes and wait for Her Majesty’s Revenue
and Customs Service to send us a polite letter if it needs more money. Here,
even when you file your tax return on time in April, if you haven’t actually paid
enough taxes between January to December, you are already liable for penalties.
So not only do you have to calculate how many noughts you owe but also how many
more you owe for being naughty. And perish the thought if you still underestimate
because that’s when the penalties really start.
It doesn’t help that you generally have to file a federal
return and a state return. And if you are living in certain big cities such as
New York, they are also due their own significant chunk of your earnings. Working
out who gets what is enough to make anyone ready to be submit themselves to the Intelligence Retrieval Service.
The good news is that for most people, the fear of falling
short leads them to pay too much tax throughout
the financial year so they end up actually receiving a refund. Last year this averaged
around $2,800, which sounds great except, as some have pointed out, it also
means they essentially were giving Uncle Sam an interest-free loan. A loan, which for the 2012 tax year totalled
just under $310 billion, according to statistics from the IRS (this time
standing for Interest Rates are for Suckers?).
Refunds are helped by deductibles, an encyclopedia of tax allowances
and deductions which could easily be described as Imaginative Reporting of
Spending. Had a rough year at the bingo halls? Never mind, the tax man allows
you to deduct your total losses up to any amount you won. If your doctor signs
off on it for specific medical reasons, wigs, weight loss expenses, clarinet lessons and even swimming pools can
be used to stop you going bust. And talking of bust, there is even the famous
case of a professional exotic dancer who managed to persuade the tax courts
that her breast implants were a work expense and therefore deductible.
There are also other ways of getting something back. Several
restaurant chains have special “Tax Day” offers to help you fill up while you
fill out your forms. From McDonalds where you can grab a second Big Mac for
just a cent, to the Hard Rock Cafe, where if you grab the mike between noon and
2pm, you can “sing for your supper” (I know, I told you people eat early in Chicago
And it’s not just food handouts. Over at Office Depot, they
appreciate the necessary cathartic process required after tax filing so they’re
giving customers the chance to shred up to 5 lbs of paper for free. I however prefer
the therapeutic service being offered in our local wine bar which is picking up
the tax amount on all food and drink tomorrow. That’s my kind of IRS – Imbibing