A Taxing Question

A twisted red pencil

Image courtesy FreeDigitalPhotos.net

Writing inspiration is everywhere–and you never know where your writing talents will be useful. As proof, I offer something I just ran across from the H & R Block tax preparation class I took in 2002.

The assignment was to create a squirrelly problem in which other class members had to puzzle out a number of significant tax issues.

Sounds boring, right? Most of my classmates’ responses were pretty dry. I wanted to have some fun, look for the story behind the Form 1040, and at the same time challenge people to notice which details were significant and which weren’t. This is what I came up with:

After eleven years of marriage, Betty finally kicked that sponging loser, Al, out of the family’s rented tract house on June 2. She went to a lawyer the following day. He filed a separation agreement that was signed by the judge and filed with the court clerk on June 25.

Betty has been too busy working paid overtime at her job with Swell Computers to get back to her lawyer about a divorce. Swell paid her $27,329 in 2001. Her only other income was $13.54 in interest from a savings account, and she does not have enough deductions to itemize.

Al’s in no hurry for a divorce. It’s not a community property state. He has to grovel to Betty for the bucks to make his rent every month on the converted garage where he now flops. He figures he has a better chance of guilting her into paying it if she still thinks of him as her spouse. So at year’s end, they’re still legally married.

Al works a part-time, dead-end job with Toilets Is Us Cleaning Service, which paid him $6,003 in 2001, and which is too cheap to spring for health insurance. Al and Little Al–his six-foot-four, sixteen-year-old son from a weekend liaison with a Swedish volleyball player–are still covered by Betty’s generous fringe benefit package at Swell. The biological mother was last heard from on the little tike’s third birthday, when she sent him a postcard from Tokyo.

Because of the rat droppings on the converted garage floor–and because Betty believes Little Al hasn’t been totally polluted by his father’s laziness and lack of aspiration–she urged Al to leave Little Al in her custody until Al gets his act together. Though she never adopted Little Al, she has cared for the lad as if he were her own and continues to do so now, working a split shift so she can be home to fix him an after-school snack–three grilled bologna and cheese sandwiches, a quart of milk, and half a package of Oreos.

Betty’s instincts were good about Little Al. In 2001, he earned $3,953 as a web designer for local small businesses, working after school, on weekends, and during the summer. $1,546 went to his support and $2,407 to his college savings fund.

When Al moved out, his grandfather–Al the Big Cheese, 67 years old and legally blind–sensed that the pickings were about to get slim and left Betty’s to live with his recently widowed niece, Myrtle. His meager disability payments help her keep her rented shotgun shack.

Al the Big Cheese was wrong about Betty. She’s had a soft spot in her heart for him ever since the time he brailed his way into a spousal argument and told his mewling grandson to stuff a sock in it. Betty pays his portion of the utilities at Myrtle’s, in addition to his food, blood pressure medication, weekly jaunts to the race track, and evenings out with the nineteen-year-old who claims to be pregnant to him–more than half the old gentleman’s upkeep.

Now for the questions (drum roll):

  • What is Betty’s correct/most advantageous filing status?
  • Would the added deduction and exemption involved in filing Married, Filing Jointly status outweigh the added tax liability from including Al’s income on the return?
  • Would Betty be too pissed off to do it? Would she file Married, Filing Separately, just to spite Al, and make him file his own 1040?
  • How many dependents can Betty claim?
  • Is she eligible for Earned Income Credit?
  • Extra-point question: If Al has to file separately, can he claim his flesh and blood, Little Al, as his dependent?

I haven’t made a taxable dime on this piece, though it may have helped me get a job the following tax season because the people giving the course ran the local H & R Block office. I did, however, turn a dull dissertation into a mini-melodrama that made my classmates laugh–and think.

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