On Tax Day, We Are The 50%
I spent all weekend completing our taxes and filing them. I had started the process six weeks ago and probably spent at least four days' work on them. I'm fully self-employed so the forms can get rather confusing. (A huge thank you to H&R Block for helping me navigate the process with their helpful software.)
Now I know that only half of Americans pay an income tax, so when I read this story about a Gallup Poll, I coughed:
As tax day approaches, Americans are split down the middle on whether they are paying too much in federal taxes, according to a new survey Monday.
About as many Americans believe that federal income tax rates are too high, 46 percent, as those who say it is “about right, 47 percent, reports Gallup. Only 3 percent say that federal income taxes are too low.
You don't say! In all seriousness, the poll also shows that dissatisfaction with tax rates much higher in 2000 and 2001, before the implementation of the first round of Bush tax cuts. Back then, some 60% said taxes were too high.I hope Team Ricochet has finished or is close to finishing filing and that the damage wasn't too rough. I have a friend who had to cash out his retirement to keep his family afloat last year during his unemployment and that's a tax penalty I wouldn't wish on anyone.
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Jan '11
Re: On Tax Day, We Are The 50%
Half the country pays no taxes, and then we read that 47% think their tax rate is just about right.
Well, yeah ... but the fun question is whether they think other people's tax rates are too low ...
Edited on April 16, 2012 at 3:54pmFeb '12
Re: On Tax Day, We Are The 50%
"We are the 50%."
Eh, speak for yourself. I would be happy to actually start paying income taxes (instead of just old and sick people taxes), but that would require actually using my law degree instead of selling shoes for $10/hr.
Dec '10
Re: On Tax Day, We Are The 50%
What if there were no payrole deduction? If people had to cut a check, a bg check every quarter for their taxes they might not be so tolerant.
Nov '11
Re: On Tax Day, We Are The 50%
What hits me is that you spent so much time on your taxes rather than hiring somebody(?) All of your time was more valuable than that. This was a long time ago, and may no longer be true, but suffice it to say that I would not recommend H&R to anyone, either. Several years ago, when we still had TV, I saw a commercial by the IRS talking about their phone number to call for help with your taxes. They then had a disclaimer that they were not responsible for any information given to you. That lead to a few dark days with me contemplating how we are idiots, but I regained my not-natural but trained optimism.
Dec '10
Re: On Tax Day, We Are The 50%
According to Scott Adams (Dilbert), you have a foot fetish.
Re: On Tax Day, We Are The 50%
Well, in my case, almost all of the time I spend would be the same either way. For me, the work is in going through my records to determine what is a business expense and, further, ensuring it qualifies and documenting that justification. The remaining work I actually enjoy -- categorizing everything properly. But I'd have to do the first part either way.
I also find that learning the intricacies of the regulations helps me figure out business expenses that are allowed for future years. Although an accountant would help me with that, too.
What I really need now is an attorney who can advise me about how to organize my business for tax purposes. I realize that I have no idea how to find an attorney ...
Apr '12
Re: On Tax Day, We Are The 50%
I had to cash out my retirement while unemployed in 2010, so, yes, I completely understand the pain of that tax penalty. We're still catching up on investments to compensate.
May '10
Re: On Tax Day, We Are The 50%
My 1040 ran 15 pages this year. With the state and the city returns my taxes look like a small book.
Oct '11
Re: On Tax Day, We Are The 50%
I'm going to have to file an extension. TurboTax is currently showing that we owe $7,000 and I'm just not willing to accept that yet. I'm sure I can find a few more business expenses to get me down into the next lowest tax bracket. Ah.... Back to looking through my bank statements. Actually, Mint.com has a feature, called "it's deductible", or some such, that helps you track tax deductible items. I didn't find out about rt until last week, but maybe I'll use it moving forward.
Oct '11
Re: On Tax Day, We Are The 50%
Re: EJ HillAs a real estate agent I see a lot of tax returns (to pass a co-op or condo application in NYC, buyers have to submit a number of documents for review). 15 pages is not a large tax return. 130 pages is the average for the buyers that I have worked with in the past five years.
May '10
Re: On Tax Day, We Are The 50%
Another thing that whizzes me off about our tax code: When we "underpay" we have to pay penalties plus interest. When we overpay, why is it the government gets an interest free loan at no penalty? This reinforces the notion that the money is theirs first.
Jul '11
Re: On Tax Day, We Are The 50%
We converted our Ira to a Roth Ira. This means it's all taxable income. Painful. I sure hope Michelle enjoys that Martha's Vineyard lobster again this summer.
May '10
Re: On Tax Day, We Are The 50%
In order to e-file this year, I have to type in my state Adjusted Gross Income from last year. Well, I entered the number verbatim off last year's form 540, but the state rejected it, claiming it doesn't match their records. They screwed up, but of course, the burden for their error falls on me.
Edit: I just talked to a nice person from the Franchise Tax Board on the phone and he was very helpful. He pointed out that it was caused by something I did in a previous tax year. I retract my invective. Maybe there is hope for this place after all.
Edited on April 16, 2012 at 5:41pmFeb '12
Re: On Tax Day, We Are The 50%
Foxman
According to Scott Adams (Dilbert), you have a foot fetish. · 58 minutes ago
Actually, his comment in The Dilbert Principle is that the foot fetish provides a non-monetary compensation in addition to the wages. :D
Trivia: the part of the brain that processes nerve signals from the feet is next to the part that processes signals from the genitals, which may be why foot fetishism is one of the oldest documented sexual fetishes. (The first evidence for it is Persian art from 600 AD.)
Actually, I do love a lot about my job, as I do comfort shoes. Watching someone walk into the store almost in tears and walking out smiling in their new pair of shoes is a wonderful feeling. I just wish I had taken the money I borrowed to go to college and used it to open my own shop.
Mar '12
Re: On Tax Day, We Are The 50%
Mollie,
You might look into incorporating an LLC for your work. That's my project this year. It costs about $100, you can file to create the paperwork yourself. Follow the steps here: http://www.citmedialaw.org/legal-guide/forming-llc-virginia.
Essentially that allows you to be taxed as a small business rather than self-employed, and there are generally better tax rates for small businesses. I'll let you know how it works out once I learn the ropes (a friend is walking me through it).
Joy
Mar '11
Re: On Tax Day, We Are The 50%
Amy Schley
Trivia: the part of the brain that processes nerve signals from the feet is next to the part that processes signals from the genitals,
As Prof Rahe once commented, you learn something new every day @Ricochet ;-)
Amy: if it's any consolation, my daughter has a law degree (in the UK) and has had various low-paying jobs ever since. She is maybe only now getting onto the lower rungs of the law ladder - it takes a lotta perseverance.
It would help if we had a President (in the US) who believes in Capitalism.
Re: On Tax Day, We Are The 50%
ThePullmanns: Mollie,
You might look into incorporating an LLC for your work. That's my project this year. It costs about $100, you can file to create the paperwork yourself. Follow the steps here: http://www.citmedialaw.org/legal-guide/forming-llc-virginia.
Essentially that allows you to be taxed as a small business rather than self-employed, and there are generally better tax rates for small businesses. I'll let you know how it works out once I learn the ropes (a friend is walking me through it).
Joy · 13 minutes ago
Thanks! I'll check it out.
Jan '12
Re: On Tax Day, We Are The 50%
I was going to make the same point, Foxman. My wife and I moved to a small hobby farm last year and are now both self-employed. Actually cutting checks to the United States Government from our bank account is one of the most painful things I've ever had to do. I've got to think we conservatives would have a lot easier time making the arguments in the public square if there were no automatic withholding.
Does anyone know when withholding started anyways? What a coup that was for government expansion!
Aug '10
Re: On Tax Day, We Are The 50%
We have a tiered, progressive system. Some folks pay nothing. Some pay only payroll taxes. Some pay payroll taxes and income taxes. Some pay payroll taxes, income taxes, and the Alternative Minimum Tax. And yet we still hear from Obama, Buffett, et al that the "wealthy" need to pay their "fair share". However, no one will define "fair share". Because "fair share" really means "more", plain and simple. There's nothing "fair" about it.
Edited on April 17, 2012 at 7:42amJun '11
Re: On Tax Day, We Are The 50%
Wikipedia says withholding started during WWII. E.B. White wrote at the time that he thought it a very bad idea, as it implied that the average American was incompetent or dishonest or both. He also thought it unhealthy to have a chunk of your earnings that you never actually get your hands on. He was right.
Self employed people get to taste that money before they send it off; I bet they almost never vote Democrat. Which is why Democrats don't give a hoot about them.