Strange tax thoughts...

[jhreed]

Can any of you very astute gentle persons help me to figure out my conundrum. I'm trying to figure out what the "true" tax is when I pay through out the year until it's fully paid. It seems to me that the government is collecting interest on half-the-amount for the entire year but I only get credit for the stated amount. Where does this "interest" go? (This is what happens to a 70 year old man who has lot's of time to think about "strange" paradoxes.)

 

[SlowlySinking]

Re: Strange tax thoughts...

Hi Jim, maybe you're right, too much spare time, you may need a hobby; maybe try a different pair-of-docks. Sorry, I just couldn't resist. On a serious note, assuming you mean payroll deductions the true tax seems to be what you paid plus the interest you lose by not having the money in your bank account all year long paying YOU interest. Banks do the same thing with your money, they pay you, say 2% and charge you or someone whatever interest rate to borrow the same money, the difference keeps the doors open, at least the banks pays interest to you, unfortunately the government taxes the interest, ya never win. Well, that's not totally true, one contractor on Long Island was arrested yesterday, seems he had a contract to build a new school building, he charged the school district the prevailing union labor rates but paid the workers (immigrants, etc) about 1/3. The difference, which he pocketed, was just under a million. He almost won. Read all about it at; http://www.newsday.com/news/local/longisland/ny-lifraud0109,0,1423579. story?coll=ny%2Dlinews%2Dheadlines

 

[mellowyellow]

Re: Strange tax thoughts...

you can change your withholding deductions and<br />lower the amount taken out of each check. if you<br />break even at years end, perfect! if you don't<br />have enough deducted there is a small penalty.<br />a good accountant should be able to tell you 4<br />sure.<br />eg. if you are claiming 1 deduction, fill out a new w-4 and up it to 2? maybe 3?<br />ask a pro, wouldn't want to see you pay even more.<br />good luck,<br />M.Y.

 

[OBJ]

Re: Strange tax thoughts...

Hi Jim....<br /><br />I'm still trying to figure out what "conundrum" means.<br /><br />Claim 0 dependents and let the government pay you at the end of the year, if ya' can.<br /><br />OBJim

 

[mattttt25]

Re: Strange tax thoughts...

claiming 0 is fine if you want to ensure you get the check back at the end of the year. but i think that's exactly what you're complaining about. the government gets to use much of your money for most of the year, when it could be earning you interest. you can claim 1 or 2 and keep your money through the year, or you can actually stop tax withdrawl in april/may/june timeframe. in other words, you claim 0, let your taxes be withdrawn from jan to whenever, and when you hit the magic date of paying what you owe for the entire year, you stop paying taxes. you must first be able to figure this out, and your investment manager/accountant should be able to easily do this. you must also be able to turn the tax withdrawl off, which is done through your employer. its all legal, just most people don't want the hassle of doing it. good luck-

 

[DJ]

Re: Strange tax thoughts...

jim,<br /><br />Getting a refund at the end of the year is a free loan to the goverenment. No thanks, not for me.<br /><br />I've got mine worked out to where I can judge my effectual rate. I usually owe $2-300.00 at remittance time (Apr.15).<br />If you get too much back, they'll (IRS) audit you, if you have to pay too much,-audit. It's a balancing act.<br /><br />Any planner can help you out with withholding rates.

 

[FLATHEAD]

Re: Strange tax thoughts...

Slowly Sinking<br /> The same thing happened at one of our school projects. But the contractor in this case paid the workers the prevailing wage by paycheck than had the workers cash them and kick back 50% to him. Aparently he threatened their jobs if they would not do it.He almost got away with it to but things got slow and guys got laid off so they figured what did they have to lose and got themselfs a lawer. He paid all money owed to the workers plus fines plus jail time.

 

[Bart Sr.]

Re: Strange tax thoughts...

DJOHNS....Right on about the free loan!!!The wife and I usually end up paying 100 to 150 dollars at remittance time and it really keeps the hassles to a minimum.THANKFULLY AND RESPECTFULLY>>BART SR.

 

[KeltonKrew]

Re: Strange tax thoughts...

I usually get about $500 back. I would rather have that than owe. Interest on $500 is not that much to worry about. I know come April, I will not have to dig into my accounts to pay. I will get some money back and that is my bonus for the year!

 

[OBJ]

Re: Strange tax thoughts...

I'm with keltonkrew on this one...<br /><br />I bet that 98% of the guys on this forum work there butts off every year to keep their families under a solid roof, store boughts on the table and of course keeping the "dug out" floating. The government takes a pretty good chunk of change from our checks every payday along with state, local taxes, SS, health plans and on and on. I get what I can, back. Let them audit me. I got nothin to hide.<br /><br />OBJim

 

[DJ]

Re: Strange tax thoughts...

OutboardJim,<br /><br />There is nothing wrong with getting a few bucks back. I hear people brag about getting thousands back. I wish they'd lend it to me for a year.<br /><br />It doesn't matter if you have anything to hide or not. If you give 50 identical tax returns to 50 IRS auditors, you'll get fifty different answers. It's been proven. Might I add that very few of them will be in the taxpayers favor.<br /><br />I just do not like to turn on red lights and put up red flags.

 

[OBJ]

Re: Strange tax thoughts...

My relatives tell me that if they had my money they'd burn theirs. I look at them and say "yeh, then we'd both be broke". I hear what your saying djohns. Just burns my patut that an honest guy can't seem to get a break from a government that most of us have worked for, ie. military time and pay their taxes and don't try to cheat our "honest" lawmakers out of their just due. I don't get thousands back but just a little tickles my inards. <br /><br />Damn Jim....you really opened a can of worms on this thread!!<br /><br />PS to djohns....that guy is still trying to get his controls apart!<br /><br />OBJim

 

[Skinnywater]

Re: Strange tax thoughts...

Sure would be nice to have the simplest most fairest tax of all. Do away with income taxes for a national sales tax. Make it with no loop holes and strickly fair for everybody. This would ensure everyone paid their fair share.

 

[DJ]

Re: Strange tax thoughts...

Outboardjim,<br /><br />I thought Joe Reeves explanation was as good as they get.