The taxman cometh (4/15/2010)

[bbjohn]

I was on unemployment for a big part of last year. I worked when I could, but because unemployment pays so little, I could not have them take out any taxes, for I needed every cent.

Now, I owe over 500 buck to both the state and the feds. And since I'm not working, I just don't have it. Oh well.

I've been in this same position myself. I found I owed money, and I didn't have the cash to pay it by April 15. From what I've found, the IRS will help you set up a payment plan, but expect to pay some penalties and interest.

The last two years, my employer hasn't deducted enough, so I wound up owing money. This year, I had to take it out of my IRA (ouch). Knowing the accounting department is comprised primarily of idiots, I'll try to set some of my paycheck aside every two weeks. You would think that, if they're not going to deduct enough, they would at least let me know so I can plan accordingly.

Big Bad John

[Duncan Edwards]

The last two years, my employer hasn't deducted enough, so I wound up owing money. This year, I had to take it out of my IRA (ouch).

You are the one who decides how much is withheld for that. Not your employer. Personally I like the idea of just keeping my money instead of giving it interest free to the government to hold. If you don't want to get caught at the end of the year owing money then just raise your withholding. Talk to somebody in payroll and I'm sure they'll tell you all about it.

[Nessie]

We've done that in the past, but New York has a nasty habit of looting "dedicated funds" and spending the money where they see fit.

Hmmm.

Could perhaps do some research. My critical habitat thing, far as I know, is good, but the state has an identical means of funding for veterans.

Did they? Take some money for the vets and spend it questionably?

Yeah.

And they got caught. It made the news. That's why I know about it!

Nessie

[jack c]

Nessie - I can somewhat relate to the scenario of money back because of significantly less total income during the year. No bonus, no merit raises, etc. I am still working, so I have no major complaints compared to many people. But fat city it is not. I sure am glad that from now on only those making $250,000 or more are going to get soaked so that my taxes can go down - NOT! There is no such thing as a free lunch. Take NASA and convert it to medical insurance - maybe OK. But Social Security and Medicare are about to blow up and no one, Democrat or Republican, is bothering to notice. Maybe it is time for a Libertarian president - unlikely, but perhaps needed.

[Mynock]

I don't blame the politicians so much as I blame the current tax system. 47% of the population of the US, after all is said and done and all refunds are issued, pays no federal income tax. In fact, a good percentage of the population actually gets back MORE then what they put in. That, my friends, is a big pile of bullshit.

[nachtjaeger]

The problem there is the "refundable credit." If your credits add up to more than your tax liability (whether you're a single parent or General Electric) you get the difference back in cash. Thanks to the New York corporate franchise tax, my tiny startup business paid more corporate taxes than GE did- they got $1.1 Billion back on their US taxes this year. Let's scrap the Earned Income Tax Credit, the Making Work Pay Credit, and the Child Tax Credit, and just not withhold taxes on any income below the poverty line. And business tax credits should never be refundable.

Here's a modest proposal: Give every citizen one vote- plus one more for every $1,000 they pay in taxes. That would dilute the political power of both the top and the bottom of the income scale.

I don't blame the politicians so much as I blame the current tax system. 47% of the population of the US, after all is said and done and all refunds are issued, pays no federal income tax. In fact, a good percentage of the population actually gets back MORE then what they put in. That, my friends, is a big pile of bullshit.

[Mynock]

I would go one step further and just institute a flat tax. Everyone pays an equal percentage of their earnings, no credits, no refunds, no BS. The current tax system basically punishes success--the harder you work and the more you make, the greater the amount you owe the tax man every April.