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View Full Version : Anyone else feel "F'd in the A" by Uncle Sam?



frankenstein
04-12-2006, 10:17 AM
Ok, so I just finished my taxes last night. Ouch!!!! I am hired as an independent contractor for my sales job. That means I pay no taxes throughout the year. I get my check straight up. Cool, right? Yes, until April rolls around. Even after taking lots of deductions, I end up owing $8000 total between state and federal. That's after writing off all my mileage on my car, a home office, etc, etc, etc. After deductions, my taxable income widdles down to only a little over measly $18,000. Hey deductions are great, except I pay 35%, as I am considered self-employed. ~$6800 in federal tax owed. Include the $1200 I owe the state and BAM!!! $8000 I have to pay!!!! So between federal and state taxes, I owe over 40% of taxable income.

Ouch. 2/3 of that is going directly towards Medicare and Social Security. Isn't that just lovely? I fork over lots of cash to something I am not very confident I will ever see in the future.

And I'm just ecstatic to know that the govt is looking at what I give them and spending far more than that. So, translation for that is that I'll have to pay even more in taxes once we have to actually start paying back the ridiculous debt our politicians are putting us in. Lovely.

Excuse me, I'm going to go throw up my lunch now.

Power-Quest
04-12-2006, 11:27 AM
I am a self employed contractor for 22 years , you have the option to pay taxes quarterly so you don't have to pay such a big chunk at once.

Also who does your taxes , yourself with comp program , or a service?

I usually pay about 15% of my total income , this year i have worked it to a little bit back from the state and i owe 1/8th of what you owe total.

Usually i pay about 2000 to 4000 a year , but i have gotten the short end of the stick for years paying for everyone elses kids to go to school(school tax) even though i don't have children , been working since i was 18 years old.

We need the fair tax.

Are you bieng to honest with the IRS , after all they don't have your best intrist at mind?

To answer your question yes i have been screwed for years , i hope the IRS goes away.

pachovia
04-12-2006, 11:40 AM
Ok, so I just finished my taxes last night. Ouch!!!! I am hired as an independent contractor for my sales job. That means I pay no taxes throughout the year. I get my check straight up. Cool, right? Yes, until April rolls around. Even after taking lots of deductions, I end up owing $8000 total between state and federal. That's after writing off all my mileage on my car, a home office, etc, etc, etc. After deductions, my taxable income widdles down to only a little over measly $18,000. Hey deductions are great, except I pay 35%, as I am considered self-employed. ~$6800 in federal tax owed. Include the $1200 I owe the state and BAM!!! $8000 I have to pay!!!! So between federal and state taxes, I owe over 40% of taxable income.

Ouch. 2/3 of that is going directly towards Medicare and Social Security. Isn't that just lovely? I fork over lots of cash to something I am not very confident I will ever see in the future.

And I'm just ecstatic to know that the govt is looking at what I give them and spending far more than that. So, translation for that is that I'll have to pay even more in taxes once we have to actually start paying back the ridiculous debt our politicians are putting us in. Lovely.

Excuse me, I'm going to go throw up my lunch now.


Make estimated payments it will ease the end of year pain. If your only making 18K and paying 8K in taxes your doing something wrong, hire a professional for a couple hundred to save you thousands, by professional I talking CPA not H&R block.

pachovia
04-12-2006, 11:42 AM
To answer your question yes i have been screwed for years , i hope the IRS goes away.

Me too

mlc82
04-12-2006, 12:25 PM
Now I'm really scared, doing the taxes tonight and am self employed also. My only hope is in the massive amount of stuff I can write off, including all gas and mileage, as I'm damn near broke at the moment from a million other things. Such good timing on my part :(

frankenstein
04-12-2006, 05:49 PM
Make estimated payments it will ease the end of year pain. If your only making 18K and paying 8K in taxes your doing something wrong, hire a professional for a couple hundred to save you thousands, by professional I talking CPA not H&R block.


I make alot more than 18K a year. After all deductions, including standard 10K deduction for my wife and I, home office, mileage on my car, etc, my 'taxable income' came to only 18K. I have done my taxes the last few years using TurboTax and believe me, I take every deduction that is possible while still being honest. My wife is in law school, taking a tax class cirrently, she's been asking me if I took this or that deduction to double check me. And I already took all the random, easy to miss deductions she mentioned. That's why my 'taxable income' is only 1/3 of my gross pay. The point was that being an independent contractor, you are taxed at the same rate as a corporation (35% federal, another 6-7% state) after all deductions are factored in.

I've got the 8K to pay the tax bill no problem, it's just a big shock. I'm cheap about some things, so I've always been decent at saving money. I'm doing estimated payments this year. I'll also be investing about $15-20K before the end of this year, some of which I obviously should put in a tax deductible account (regular IRA on top of the nondeductible Roth IRA).

I mentioned my big $8K bill to a few people today and some suggested buying a house (write off the interest of the mortgage loan) instead of pissing it away on rent. We'll see.

Yes, fairtax would be nice. I'd still get all my pay like normal and have to just pay a consumption tax. And then there's the prebate!!! The current tax system wreaks too much of a socialist type of system. Plus, it's way, way, way more complex than it needs to be. How many hundreds of pages is the current tax code?

I am very pro-fairtax. Unfortunately I don't have faith that it will ever become a reality- at least not in the foreseeable future. The reason I think this is that too many people will become misinformed and only hear part of the plan, thinking it's evil because they only know part of the whole plan. Plus, there are too many people with vested interest in keeping the tax code complicated. Many CPAs and lawyers would be out of jobs, as would tax advice services from financial advisors, etc.

frankenstein
04-12-2006, 05:53 PM
Now I'm really scared, doing the taxes tonight and am self employed also. My only hope is in the massive amount of stuff I can write off, including all gas and mileage, as I'm damn near broke at the moment from a million other things. Such good timing on my part :(

I hope you've got a little saved up or you can write off maaad stuff. Like I said, my taxable income (all deductions factored in) came out to 18K. 35% of that leftover amount goes to federal. So even if after all deductions, your taxable income comes to just 10K, you'll still owe $3500 to federal. Good luck bro.


Also, I knew I'd be paying a big bill, but I didn't expect it to be this high. Again, good luck.

CitadelArmyJAG
04-12-2006, 05:53 PM
Its time for the FAIRTAX!!!!!!!!!!!

mlc82
04-12-2006, 07:15 PM
I hope you've got a little saved up or you can write off maaad stuff. Like I said, my taxable income (all deductions factored in) came out to 18K. 35% of that leftover amount goes to federal. So even if after all deductions, your taxable income comes to just 10K, you'll still owe $3500 to federal. Good luck bro.


Also, I knew I'd be paying a big bill, but I didn't expect it to be this high. Again, good luck.

I actually just got saved by a huge amount of write offs. Mine went from in the thousands to owing $127, not kidding. Wrote off mileage (apparently can't write off gas if writing off "standard" mileage), wrote off my pc, my monitor, all supplements (I'm a freelance personal trainer- these are technically "business supplies" :D), I was ready to cry looking at the initial amount.

novax
04-12-2006, 07:24 PM
The current tax system sucks balls. It is just another way to redistribute wealth.

Diesel66
04-12-2006, 07:35 PM
Its time for the FAIRTAX!!!!!!!!!!!
The most false name ever. Hey guys we are going to raise your tax rate from 0 or negative to 20%. And then get this, we are going to label it the FAIR tax.

~41% of Americans pay zero or negative income tax.

novax
04-12-2006, 07:36 PM
The most false name ever. Hey guys we are going to raise your tax rate from 0 or negative to 20%. And then get this, we are going to label it the FAIR tax.

~41% of Americans pay zero or negative income tax.


link?

Dr Triceps
04-12-2006, 07:38 PM
You must have goofed...35% with those earnings is goofy. Did Goofy do your taxes?

Jeremy1
04-12-2006, 08:05 PM
I believe that the best way for economic prosperity and financial freedom is a government returned to it's authorized size under article I Section 8 and the re-enactment of the "direct tax provision" as intended by our founders by repealing the XVI ammendment. If you want to read a little bit about it check these two posts.

http://forum.bodybuilding.com/showpost.php?p=9435681&postcount=28

http://forum.bodybuilding.com/showpost.php?p=9448378&postcount=44

PhoenixBuff
04-12-2006, 09:08 PM
A friend of mine own's his own Insurance business and he pays taxes quarterly. Dude makes a small fortune and I don't blame him, the hit he would take around tax time in one payment would be astronomical.

Diesel66
04-12-2006, 09:51 PM
link?
http://www.taxfoundation.org/news/show/1410.html


http://www.rushlimbaugh.com/home/menu/top_50__of_wage_earners_pay_96_09__of_income_taxes .guest.html
Remember that the top10% of income earners is around $92k. Two middle class jobs and you are easily there.

WickedMind
04-12-2006, 10:32 PM
Yeah I'm an independent contractor and I had to pay taxes out the ass. I feel at the moment like I'm losing money by working.

US_Ranger
04-12-2006, 10:39 PM
I lose 40-45 percent of my paycheck to taxes. Talk about getting raped by the government.......

However, it has taught me valuable lessons of itemizing and claiming just about everything as a write off for work.

Melkor
04-12-2006, 10:39 PM
Social security taxes are 7.65% of your paycheck, and you'll never see that money again. Isn't socialism awesome?

mlc82
04-13-2006, 12:56 PM
I lose 40-45 percent of my paycheck to taxes. Talk about getting raped by the government.......

However, it has taught me valuable lessons of itemizing and claiming just about everything as a write off for work.

That's the way to do it, and remember that ANYTHING you use even once for your business should be a-ok to write off. Computer, computer parts (monitor, etc) car, gas, mileage, car repairs, etc. If they're going to rape us on gas and taxes, we might as well do our damndest to rape them right back!

frankenstein
04-13-2006, 06:34 PM
You must have goofed...35% with those earnings is goofy. Did Goofy do your taxes?


I paid 0 in income taxes throughout the year. After all deductions (i took everyone availabe without lying and I don't own my home, which would have been a huge deduction) I ended up owing about $6800 to federal and $1200 to state. $8000 total, which is less than 15% of my net income, but is a much higher percentage of my 'taxable income.' You guys really don't understand this terminology and the huge differences in terms do you?

Net income- what you make before any taxes are taken out.
Taxable income- the number after subtracting a standard deduction ($10K for married couples), deducting business expenses, mortgage interest, regular IRA gains, etc.

Your taxable income is much lower than your net income. My taxable income (after all deductions and credits) was a measely $18.5K, much lower than what I really made throughtout the year. As a contractor though, one is taxed as being self-employed. Translation- you get taxed the same rate as a corporation from your 'taxable income.' 35%.

It's my fault for paying 0 in taxes throughout the year. It's just more visible to see in one lump sum.

So, no I didn't screw up my taxes. I took all deductions possible without lying.

Dr Triceps
04-13-2006, 06:38 PM
I paid 0 in income taxes throughout the year. After all deductions (i took everyone availabe without lying and I don't own my home, which would have been a huge deduction) I ended up owing about $6800 to federal and $1200 to state. $8000 total, which is less than 15% of my net income, but is a much higher percentage of my 'taxable income.' You guys really don't understand this terminology and the huge differences in terms do you?

Net income- what you make before any taxes are taken out.
Taxable income- the number after subtracting a standard deduction ($10K for married couples), deducting business expenses, mortgage interest, regular IRA gains, etc.

Your taxable income is much lower than your net income. My taxable income (after all deductions and credits) was a measely $18.5K, much lower than what I really made throughtout the year. As a contractor though, one is taxed as being self-employed. Translation- you get taxed the same rate as a corporation from your 'taxable income.' 35%.

It's my fault for paying 0 in taxes throughout the year. It's just more visible to see in one lump sum.
00lying.

I know the terminology and there are ways around it, legally. Get a good tax man. I'll refer you to a good one if you like...

frankenstein
04-13-2006, 06:45 PM
Social security taxes are 7.65% of your paycheck, and you'll never see that money again. Isn't socialism awesome?


That's if you are an employee. Your employer has to pay the other 7.35%. Most people aren't aware of that until they have to be. If you are self-employed (or independent contractor) you are both the employee and the employer, so you pay 14.7% of your 'taxable income' to Social Security.


And BTW everyone:

A fully one-third of your gas prices are taxes. If you are paying $2.85 per gallon (avg price I saw while driving today) about $.90-$1.00 of that is taxes, depending on your state and county.

And:

Our budget deficits every year are stated without figuring all the billions that are "borrowed" from Social Security. If the budget deficit for this year ends up being $550 billion, that is the number after billions and billions are taken from Social Security to finance the budget. The true 2006 budget deficit (pre- stealing from SS) would probably be closer to $700 billion if I'm not mistaken.

I'm going to demand that with the dollars the govt is stealing from me that they at least send me some lube, so I can be prepared when they next tell me to reach for my ankles. Oh wait, next time I fill up my gas tank that will be happening. I'll need lots of lube.

mlc82
04-13-2006, 06:50 PM
That's if you are an employee. Your employer has to pay the other 7.35%. Most people aren't aware of that until they have to be. If you are self-employed (or independent contractor) you are both the employee and the employer, so you pay 14.7% of your 'taxable income' to Social Security.


And BTW everyone:

A fully one-third of your gas prices are taxes. If you are paying $2.85 per gallon (avg price I saw while driving today) about $.90-$1.00 of that is taxes, depending on your state and county.

And:

Our budget deficits every year are stated without figuring all the billions that are "borrowed" from Social Security. If the budget deficit for this year ends up being $550 billion, that is the number after billions and billions are taken from Social Security to finance the budget. The true 2006 budget deficit (pre- stealing from SS) would probably be closer to $700 billion if I'm not mistaken.

I'm going to demand that with the dollars the govt is stealing from me that they at least send me some lube, so I can be prepared when they next tell me to reach for my ankles. Oh wait, next time I fill up my gas tank that will be happening. I'll need lots of lube.

I need to get ass raped at the gas station pretty soon also... Remember when it shot up to $3 or more per gallon right after the Hurricane and everyone was pissed? Now it's slowly creeped back up to a ridiculous high price and no one seems to notice. Oh well, I'm sure the oil companies have the American Peoples' best interests at heart (extreme sarcasm, don't know how to make the rolling eyes smiley).