If you wish to help support the ongoing costs of running this blog and you haven't purchased anything through Amazon on this site, please consider a small donation to defray basic costs. It isn't free to me to keep this site current. I have to pay for bandwidth, costs of duplicating documents when they exist only in paper form, and keep printer ink around to read lengthy documents, and the time to do the research. Thank you. Marc Feldesman, site owner and publisher.
Oregon PERS Information is Copyright Marc R. Feldesman (c) 2003 - 2018 All Rights Reserved. Posts may not be reprinted without prior consent.

Please don't post your comments more than once. I moderate all comments and a delay between posting and appearing is part of the drill here. I get to all comments in due time. Please don't continually repost the same comment. Only one will be posted. Thank you.

Friday, January 25, 2008

Way Down in the Hole

I love doing my taxes. It always puts me of mind of just how much the government takes from us and how remarkably little we get in return. I'm always feeling I'm way down in the hole. I started preparing my taxes as usual this year as all the little bits of paper start showing up in my mailbox. I've finally decided that all those deductions I've meticulously kept track of over the years - personal exemptions, medical expenses, state income taxes, property taxes, business expenses - aren't worth the paper they're printed on. Once you get into the AMT, where we've been now for about ten years - the government takes those away from you and you no longer get to deduct them. You can list them if you want, but you can watch the TurboTax calculator just stick in place as you start adding them. So I told myself last year that I would just shoebox them all this year and see what happens. We can't avoid listing the state income taxes withheld; they're part of the W-2 and 1099R forms. Thus, the moment they get entered (or downloaded this year), the AMT bell starts going gong, gong, gong. It announces that you've made to AMT territory and most deductions don't matter any more. Welcome to the twilight zone, to the parallel universe known as AMT hell. This is quite liberating actually. Of course I'd like to only have to pay my fair share of taxes, not my share plus the share of about ten other people. On the other hand, my taxes just got a whole less complicated, especially now that we don't have to bother with my wife's business expenses - medical licenses in three states, medical societies, continuing medical education, travel expenses, etc. It was a pain to keep track of all that. No more those. I just bend over and let the government extract what they can.

Speaking of taxes and government, I got my PERS 1099 statements yesterday. Note the plural. I got two tax statements from PERS. I had forgotten that the year between one's 59th and 60th birthday marks a special occasion in tax land. About half way through you turn 59.5 years old. That magic point marks the crossover point where you are no longer subject to the IRS's special hell for taking "early distributions" of retirement income. In PERS-land, this event is marked by getting two 1099 forms. One form has Box 7 marked with a "7", which means "normal distribution" (i.e. you've reached official IRS retirement age and you can withdraw without a penalty). The other 1099 has box 7 marked with a "2), which means that you were subject to "early distribution" rules. It hardly matters when one is taking a PERS pension plus an annuity, but the IRS keeps track of these sorts of things. So now I'm street legal; I am really old enough to retire. If you get two 1099R's from PERS this year, you might have turned 59.5 sometime during the year; otherwise, you may be getting a variable distribution. If you got two for any other reason, it might be that PERS just likes to play with your head. Have fun doing your taxes. I'm having a blast doing mine. The AMT has only cost me $7000 so far this year. If I'm lucky, I can keep it under $10,000. Way down in the hole.

No comments: