[net.taxes] Rounding or exact -- which is better?

wmartin@brl-vgr.ARPA (Will Martin ) (03/12/84)

I have always figured my returns out to the exact cent. The couple years
we had a CPA do ours, due to having a business during that time, I
noted that he figured using the option (described in the instructions)
of rounding to the even dollar amount.  Has anyone seen any published
figures which show which method will average out best for the taxpayer?

Using the percentage computation basis, it could only save at most a dollar
each return, but better a dollar kept in my pocket than sent to the taxman...

Using the Tax Tables, though, it can be of more importance, it seems.
This year, a few cents made a big difference; I came out only a
few cents under a cut-off point in the Tax Tables, which saves $11
or so.  Rounding would have put me in the next range.

Will Martin

jaw@ames-lm.UUCP (James A. Woods) (03/15/84)

#	Behaviorism is the art of pulling habits out of rats.  -- O'Neill

(ignore outside of US -- or can 'readnews' followups restrict distribution?)

     Certain nonlinearities in the income averaging method will sometimes make
a $4 difference (a line in Schedule G which multiplies by 4) with rounding.
Just have your computer do the form both ways ... it's hit or miss.

	-- James A. Woods  {hplabs,dual,hao,research}!ames-lm!jaw