Warning: This post is not for the faint of heart. Or
for 99.873% of mankind. Nor is it for anyone driving, operating heavy machinery,
or in need of their mental faculties within the next hour.
Last night a young woman came in to get her taxes
done. At first, it seemed simple. Just her, no dependents, two W-2s, no other
income. Then it got more complicated. Seems that for the first six weeks of
2016, she lived and worked in New York, out in Long Island. Then she got a job
over here in Jersey, in her chosen field, so she moved mid-February and began
her new work. So though her federal is not affected and remains a 1040EZ, she
now has to file a New York non-resident return as well as a New Jersey return,
and both prorated for the amount of time she spent living and working in each.
It became a little embarrassing because I couldn’t
find where to establish her residency dates in New York via the software we
use. Plus the fact that a New York return contains two dozen forms doesn’t
help. The clock was ticking and I was, in all honesty, getting a little frazzled
(it was only my second New York return of the season, so I’m far from
comfortable with them). I asked her if I could work on the returns over the
next couple of days since she has until April 18 anyway. She said yes.
This morning I got to thinking about all this as I was
shampooing and shaving in the shower. Doing a tax return is like solving a
jigsaw puzzle. The more complicated the return, the more numerous the pieces
and the more exotic the picture. The more returns you do, the more familiar these
jigsaw puzzles become, and solving them almost becomes second nature. So I
asked myself, how many patterns of returns are there? How many set types of a
return? In the case above, my client had the return type of [Federal 1040EZ +
NJ resident + NY nonresident + zero adjustments / credits / deductions].
At first I guessed 50, but then, recalling the class
on finite math I took in 1989 which covered permutations and combinatorics, I
realized it had to be much more.
Rinsing out conditioner, I mentally made a very rough
list that determines the option for most major variables when doing a tax
return:
Type of Federal return (1040, 1040A, 1040EZ) = 3
NJ resident vs NJ nonresident = 2
NY resident vs NY nonresident or no NY = 3
Has child / child dependent care credits Y/N = 2
Has capital gains/losses Y/N = 2
Has substantial interest income Y/N = 2
Has retirement income Y/N = 2
Has education adjustments/credits Y/N = 2
Has health care penalties/PTC adjustments Y/N = 2
Has other deductions or credits Y/N = 2
Has anything out of the blue Y/N (such as another
State) = 2
Multiplying everything out, we have
3 x 2 x 3 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 =
3^2 x 2^9 =
9 x 512 = 4,608
Or 4,608 different sets/patterns of returns.
But that’s somewhat of an overestimate. In fact, if
you are on a 1040EZ, you most likely do not have all the credits and deductions
and alternative income listed. So if we just calculate the 1040EZ permutations
with the state return(s), if any, and add that to the 1040/1040A option
combined with all the permutations of the credits, deductions, etc., we get
something like:
3 x 2^10 + (1 x 2 x 3) =
3 x 1024 + 6 =
3072 + 6 = 3,078
3,078 different sets of sets/patterns of returns.
Even that overstates the number of sets though,
because some of those credits/deductions/etc. merely involve clicking a YES or
NO button in our software, while others involving inputting a completely new
form or forms. So each would have to be weighted somehow in some way, in terms
of effort needed, as well as typical frequency of occurrence.
Out of fear of driving you comatose, I shall not do
that. But my very inexperienced gut tells me that the result of this further
weighting will yield an approximate number of
150 different sets of sets/patterns of returns.
Me, I’ve only done around 15, or 10% of the jigsaw
puzzles.
Full proficiency expected sometime the beginning of
February 2018.
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