Congratulations! You get to pay taxes to the federal government. The upside is that you earned money. The downside is that you just realized how much of it the federal government took.

That realization snuck up on you. Like slowly boiling a frog, the federal government requires that most of your tax liability be paid before it is actually due on tax day. Because of withholding requirements, most Americans never feel the economic loss of taxes because they never see the money. You earned it, but the government took it before you could spend it.

If you were forced to write a check for ten, fifteen or twenty percent of your paycheck, you’d probably freak out. More than likely, you probably would not have set aside enough to pay Uncle Sam. Financial planning, even for a year, is not exactly an American hallmark.

But now you see it.  You see the line at the bottom. At least you think that’s the number. You’ve added almost an entire alphabet of schedules with A, B, C, D, E, H and SE. On top of that, you have forms on items from employing individuals living on Indian reservations to a litany of energy efficiency credits.

Then comes the sinking feeling that you missed something. You probably did. But don’t worry; the federal government appreciates your donation.

That can’t be right though? After all, you’re educated. You understand math and you even get most of that questions right on Jeopardy. The problem is that nowhere in any math class did you have a 16-step word problem within a 40-step word problem that could potentially result in an IRS audit.

As a result, you err on the side of over-withholding and overpayment. First, you give the federal government an interest-free loan, and then you let them keep money that you’re legally entitled to get back. The problem is that you are not sure. You think you’ve filled everything out right, but you don’t want to receive an audit letter. So you play it safe and the Treasury keeps the money you rightfully earned.

Benjamin Franklin famously stated, “In this world, nothing can be said to be certain, except death and taxes.” If Franklin had to fill out a federal tax return today, he probably would have left off the last part about the certainty of taxes.

Our federal tax code is ridiculous and an economic drag on American families and businesses…unless you are in a family of accountants working at accounting firms. In fact, that is the point. You should not need an advanced degree or accounting background to have confidence that you are paying the government what you owe.

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