I had to do tax forms the other day that melted my brain. These are tax forms that usually people have lawyers help them with. Of course if you are poor you can't afford a fancy tax lawyer to help you with byzantine tax law. So the job was left to me.
If you know the term "Offer in Compromise", you will know how complex things were getting. I spent 4-5 hours on these tax forms the other day. Of course this includes a million copies. Sometimes it feels like all I do is fill out forms. I can barely understand the forms even though I am college educated and am considered as having a decent IQ. I find myself wondering how do people in general get all these forms done when I find them hard to impossible.
The tax rate for the self-employed when it comes to my husband let me just be honest is hellish, even if you are broke. It does not forgive at all. I suppose the system wants to make you have an employer and not too much freedom. He applies for "good" jobs on occasion but they are like Lotto "long shots" and I fear our broken down looking car with it's cracked windshield and his very poor wardrobe already ruin his chances from the get-go. The guy who fired him in 2007 throwing us into poverty forever it seems, I hope God forgives me for this, but I hate that guy. It's that guy's fault our life fell into such a pit, and I do nothing but fill out forms.
The tax law is obviously broken. If your husband is low-income, regardless of whether he was self-employed or not, he should be paying fewer tax than he was charged. In the other hand, billionaires who are self-employed are paying pennies relative to what they earned. As long as Republicans are in the majority in the Congress, poor people will have higher tax burden than wealthy people who are not job creators. They are job out-sourcers and tax evaders. I hate Republicans and traitors in other parties. >:(
ReplyDeleteWe owe the IRS a crap load of money. Some of you would be in shock if I told you how much. If he had a job at this level of income, he wouldn't even owe any taxes. They add taxes and penalties to everything too and it is insane. So richer people can pay off taxes faster with no tax and penalties. Many megacorporations and billionaires are not paying taxes now and using globalism and tax shelters to get out of pay any. Trickle down is a definite lie. I read in the 50s, megacorporations paid a far higher percentage of taxes, now they pay almost none. Something is really wrong. I plan to make appeals. We have nothing they can take. Even our car is too old.
ReplyDeleteHis tax rate when you add state and federal is essentially 20 percent. We need every dime he makes for the basic bills.
ReplyDeleteWe use volunteer tax preparers and every deduction that is possible. EZ forms are NOTHING to me now.
DeleteBe VERY careful with offers in compromise. There are a lot of sharks out there that will pretend they can get your offer in compromise accepted if you pay them - but the reality is that 3/4 offers are rejected and anyone who says they can magically make it happen to you is a fraud. More info from the BBB here: http://www.bbb.org/stlouis/migration/bbb-warnings/2011/02/consumer-fraud-task-force-urges-consumers-to-be-wary-of-firms-promising-to-reduce-tax-debt/ and here http://www.bankrate.com/finance/taxes/tax-scam-s-deal-really-is-too-good-to-be-true-1.aspx
ReplyDeleteThe same payroll taxes would be applied if your husband had an employer - it would just be taken out of his paycheck before he saw the money, and half would be 'paid' by the employer (ie. it's still part of their cost to employ you - it's just not money he ever sees even on a paystub.) It adds up FAST if it's not withheld. I have one client who owes $9000 just from two years of self employment - she had medical bills to pay and couldn't save to pay taxes.
Payroll taxes are especially pernicious in the USA as the very rich don't pay them - they're waived on any earned income over $110,000, and if your money comes from investments rather than earnings, you don't pay at all! It's THE most regressive part of the tax code. Additionally, everyone who says Social Security is 'bankrupt' because of not enough payroll taxes paid in is a liar; all we need to do is make rich people pay the same rate as the rest of us and the system will stay afloat for ever.
I agree with you how the system is written for the rich so even poor like us are getting absolutely squished. Funny how they can escape paying into social security and it boggles my mind. I am not using any agency or tax lawyers, we couldn't afford any of them. I plan to appeal on any rejected offers. I kept it short and simple on the first go around but on second I won't. Thanks for your advice. I think something is really wrong with the system. I did write husband worked at home to help in caretaking of me.
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