Taxes!

xpost

anyway, you wind up owing money this way:

if you're married, and you mark "married filing jointly" on your withholding forms at work, they withhold LESS money from your check than they would if you marked "single." this is because the tax system (wrongly, in almost all cases) assumes that if you're married and filing jointly, you're supporting your wife. If both people are working, you have to go through the two-earner, two job worksheet to find out what the difference is b/w what they'll withhold and how much taxes you will actually owe. This is almost always short though for some reason. (note: this is all only true for Federal. State, which is what I owe, doesn't bother to give you a nice worksheet to figure this out. They just say "fuck you", give you no tools to find out how much you owe, and then charge you when you're short. This is called "California is broke and squeezing you for money, bitches.").

If your income fluctuates from month to month because of overtime or bonuses or something, then God help you.

Being married sucks for taxes because of this, and also, this: say you make 70k. Say your spouse make 40k. If you're single, you pay the tax rate for someone making 70k, and your spouse would pay the rate for someone making 40k. But if you're married, you pay the rate for ONE income making 110k. Which is a higher percentage than the others. This means you pay more taxes when you're married than single people making the same money. This is called the marriage penalty and everyone thinks that they got rid of it last year. They did, but only for very low income people. The rest of the country (ie: the middle class) gets fucked.

thankfully i make little enuf that this isn't massive chunks of change we're talking about yet.

grrr.

also how fucked up is mass in that you get taxed MORE (and w/o most deductions, no less!) on out-of-state "investment"!? they only let you take out special in-state deductions for it, insteada the gamut, so my education deduction (which is xo!@%$@#ing huge) does no good.

[on the health insurance tip -- i need to figure out how to make sure the plan is "through" the business or whatever. yeah -- a tax atty could actually have probably saved me $ this year. next time round...]

now, if you fuXors only had money i could make a mint representing yer asses come audit time :-)

that said, yeah if you are self-employed and have business expenses you stand a better chance than if you are just self-employed and have no expenses. also, anything having to do w/ "flow-through entities" (basically, partnerships, limited liability companies, and S corporations) get a closer look (b/c of well-publicized instances of outright fraud wr2 such entities).

Audit-wise: I decided (about sixteen hours ago) that unless you're actively trying to scam the IRS, they're not worth getting paranoid about -- not unless you're dealing with really significant sums of money. Which isn't to say that I don't believe they'll audit you, or that it won't suck. But I started thinking about it, and the worst-case audit scenario I can imagine is that I'm unable to back up a couple small claims, which ... well, if you're in the student/freelance range that I am, the worst this could possibly mean is that you do wind up having to pay that $1500 you shaved off of your bill, plus penalties. Which would suck in countless ways, but it's not exactly life-ruining.

(This will be hilarious in fall when I start the thread that goes "they audited me! oh shit! I have to pay $62,000 in penalties or go to jail! I was wrong, I was wrong, I was wrong!")

not to needlessly scare the shit outta anyone (b/c nabisco is basically correct) -- but (a) the IRS has been underfunded for a while now [thankee dubya!] -- there are abusers and scammers who are quite well-known to the IRS and defrauding the government of MILLIONS of dollars, but they don't go after them simply because they don't have the resources to do so; and (b) the IRS HAS recently been going after small-fry "cheaters" esp wr2 the earned-income credit -- not that there isn't fraud and abuse there, but going after them is a political decision by Treasury [thankee again, dubya].

Actually, Tad, it's funny -- you can practically see in the IRS documentation that they're trying to keep people from claiming the EIC. It took me hours to sort through vague, discouraging documentation to see if the dollar limit applied to adjusted gross income or flat earnings, and every other page seemed to be "DO NOT CLAIM THIS, SERIOUSLY, IT'S NOT FOR YOU, DON'T EVEN DO THE WORKSHEET."

What if that same person, flush from her recent successes, tried the same strategy in VA circa '96 and when a letter was sent to her, her mom sent them a letter back saying she was in Japan, and the taxman was not heard from again?

Overheard five minutes later at a different booth: Do you think I should get my blood pressure checked on tax day?! Haha!

Ahh, corporate humor!

Taxes fucking sucked it this year. Bad witholding = I owes .. uh ... LOT. But for the first time ever, I don't owe the city anything.

I'm annoyed at the paltry tuition deductions they allow, too; a $4000/year cap doesn't come anywhere close to reflecting the cost of higher education; it'd barely cover tuition and fees at a community college! (And lord, if there's anything people should be able to spend money on tax-free, it's education that will theoretically lead to their paying a hell of a lot more taxes in the future.)