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January 25, 2014

Prepare for the Taxman: Get paperwork ready to send to the IRS

“Let me tell you how it will be …”

George Harrison, “Taxman,” 1966

Taxes, taxes. Many Americans really hate them. 

In fact, as most U.S. middle-school students are taught, one of the reasons the colonies revolted against the British Crown and created a new nation was their resentment of Britain’s perceived burdensome taxation of the colonists. And yet taxes remain with us, to fund the country’s functioning — its interstate highways, its schools, its defense.

George Harrison, an Englishman and highly compensated Beatle who found himself subject to his country’s 95 percent supertax, penned “Taxman” in a fit of pique. His song, which opens the album “Revolver,” is played on radio and TV on the days before Tax Day — April 15, because, as Harrison himself said, “There’s always a taxman.”

While taxes remain a constant of an organized society’s common life, tax laws change.

For instance, according to Donald Benson, a certified public accountant who has practiced in Oneonta for more than 30 years, several tax cuts for high-income people expired this year, and there are “major changes for (those who earned) $250,000 or more. Tax brackets are higher and many deductions (have been) phased out,” Benson said.

“The tax laws are more complex than ever before,” said Benson. It pays, sometimes literally, to review carefully IRS literature on the IRS Form 1040, more commonly known as the federal individual income tax return, and in some cases, to consult a tax professional before filing.

“Many people do their own returns erroneously,” Benson said. “It’s worth thinking about going to a pro.”

One of the most important documents a tax filer must have to complete his or her — or their, in case of married people filing jointly — return is IRS Form W-2 “Wage and Tax Statement.” W-2 includes information about the taxpayer’s employer, the total income paid, and the amount of federal and state income taxes withheld during the tax year. Social Security benefits recipients receive Form W-2 also. Note that a Form W-2 should be issued by each employer of a tax filer during the tax year, so that if the tax filer worked for three different employers during the year, he or he should expect three Forms W-2.

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