Tax prep woes ...
- Thread starter ripcord
- Start date
I had paid quarterly’s for my previous consulting business since 2002 - 2023. I knew exactly what taxes I paid them and had to keep a portion for quarterly and end up owing or getting back within $500.
Paying taxes , politics, inflation etc and many things are not in my control so I work with them not around them and stay happy. Been that way since I graduated college.
Think about it. All or nearly all the info you use to prepare your return is also sent to the IRS. They could collate the info and send you a filled in return. If you agree, sign it and return with any tax due. If you don't agree, explain why and substantiate. If theree's a refund they issue it when all parties agree. For many filers no need for TurboTax, tax preparers, etc.
Not my idea. It's how it's done in several countries.
Regarrds,
John
Not my idea. It's how it's done in several countries.
Regarrds,
John
With 87k more agents on the payroll I fear we're going to see a lot more of this. I hope I'm wrong.
How hard would it be to run the numbers and figure for every notice you send out, say, 75% just pay it? Then you make it small relative to income. Say, most people making $60k/yr will just pay $1000, people making $75k will just pay $2000, people over $100k will just pay $4k, etc.
You also program it to avoid those who used CPAs, and strike at self-filers and tax prep software because statistically they're less likely to be truly confident in their numbers -- or maybe that doesn't matter. Don't worry, you (or the AI) will learn that after a couple years of this.
I know some will say no, no, they're not targeting the middle class. Uh huh. Why not? For the cost of a sheet of paper and postage you could bring in several thousand at a success rate of 75-80% -- again, guessing, but don't worry there either, the AI will fine tune it to be 90%+
I know, I know, I'm a conspiracy theorist and everything is wonderful. Just shut up, peasant!
I've wondered, too. It's always felt a bit like a game: you failed to reflect this 1099 that was already reported to us, so we already know about it.
That said, one of my biggest corporate clients does not provide me a 1099. Not sure why exactly, and I'm not going to tell them what they should or shouldn't do. I do report that income. It's all ACH directly to my business account so it would be foolish to deny it -- not that I would anyway.
My favorite is "I'm getting a huge refund this year!"
Congrats; you just gave the IRS a free loan.
In April 2020 I had lots of time. Perhaps you remember. I decided i would file on paper. I ended up owing a bit - paid online, and mailed the thing in.
Two years later I needed a tax transcript so I tried to get one. Their system said I had no record. I panicked. I called and called and after about 2 days I got through. They told me paper returns were years behind. I said "so there just sitting in a pile in the basement", and they said no, they come in, get scanned and we throw them away.
So the work from home IRS crowd wasn't working. I am sure your all shocked.
8 months later I got a bill for underpaying. No idea if it was correct or not. They added 30 months of interest.
Yes! 1099-B entry the past took the most time, I had a little trial balloon acct with Ed Jones and they broke that little piece of change into twelve different investments (!) with multiple short and long gains and rebalanicng - all to earn about 5% after their 1.3% take. Terrible.
I elected to manually entered those cap gains into the table, and it took hours since the auto upload didn't work with EJ that day.
Finally fed up with this pain, last year using Tax Act, I just aggregated and wrote Various - the IRS is getting the 1099-B if they want specifics. It didn't get kicked. Phew!
I found Tax Act was getting more than a bit clunky and frustrating - especially if you jumped around. So, I tried TurboTax online this year as I had a discount from Fidelity Premium Services. A bit more pleasant with some more consoling and hand holding, LOL.
@Donald Save the 1040 form in a file folder on your hardrive as a PDF when elected to PRINT. I have a TAX folder where I drop all the previous tax year sub folders and W-2, Brokerage and IRA documentation to have it instantly on hand.
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It's a day too late, but April 15 was last chance to fund a Roth from TY 2023 earned income. If one spouse doesn't work, but the other does, you can still also fund their own personal acct up to $7500 if over 50 y..o. using the Spousal IRA rules.
It's always good to start that 5 year clock ticking on a ROTH if you don't have not created one.
If you are no longer working with earned wages - no can do.
- ARCO
Some words of wisdom. Regardless of what your read or hear there's no incentive to fix the tax code. The incentives revolve around the process of working to fix the code.I just submitted our 2023 income taxes and I have to say I feel kind of traumatized. Between my wife's disorganized record keeping for her side business and those Byzantine IRS rules, I'm feeling traumatized.
Did I mention I'm feeling traumatized?
Adjusted for inflation and IAW the the 1913 Revenue Act, you would pay a flat 1% on your first 88K, and additional 1% from 88K to 440K then an additional 1% up to 1.1Mil. Even the top rate was 7% and you have to make 11Mil for that.
Where it is now is disgusting.
Where it is now is disgusting.
I am a certified public accountant specializing in income taxation, so I think I know a little about this.
To file an extension, you must reasonably estimate how much tax you will owe. You should send that much in, but you are not required to do so. No one should have failed to file an extension yesterday because they did not have the money to send in with the extension.
Failing to file an extension when you owe means a 5% penalty for each month, or part of a month, the return is late, up to 25%. Filing an extension but failing to pay mean about a 14% APR interest and penalty (currently 6% penalty and 8% interest) on the unpaid balance until paid. That comes to 1.17% monthly interest and penalty compared to 5% penalty.
Getting tax advice from mechanics, airline pilots, engineers, etc. is about as smart as getting mechanical advice from a CPA.
Interesting! I've never been in this position, but sure enough most everyone says you are required to send the estimated amount.......thanks.
Hermann
Site Donor 2023
Will probably never see a refund again. My adjusted gross income in 2022 was $131.
In 2023 it was $4400. Did not owe anything as I am Poor.
In 2023 it was $4400. Did not owe anything as I am Poor.
Don't sell yourself short, wealth tax is coming.Will probably never see a refund again. My adjusted gross income in 2022 was $131.
In 2023 it was $4400. Did not owe anything as I am Poor.
If they owe you money why wouldn't you file ASAP?
If you do not owe anything, or have a refund coming, you will not be penalized no matter how late you file*. However, what if you miscalculate and wind up owing? Therefore, I file extensions for clients even when I am sure a refund is coming.
If you go three years past the tax return due date before filing, the IRS will NOT give you your refund. I know it is not fair, but it is the law.
*Note, this does not apply to partnerships, Sub-S corporations and exempt organizations.
Less chance of audit as the usual quota will have already been done and they are gearing up for the next tax year.
...unless, there are glaring errors or out of line deductions being claimed that their computer models will catch.
Thank you - math is hard for so many people. Total tax divided by gross...that's really what matters (to me at least) w/r to % tax I pay and it's MUCH lower than folks go on about. I also like to do another excersise...I combine them all...payroll/social sec/med, state, local, property, sales, gas, anything that is a tax/gov fee and do the same (of course there is a bit of quick estimating going on with some of those)....again, much lower than many think and honestly, we pay much lower taxes overall in the U.S. vs. many other first world/developed countries simply b/c we also have less services (public health etc. etc.). I had a guy that worked for me that told me he didn't want a bonus b/c they taxed it too much....we had to do some math on the white board. He made about $50K/year but swore he was paying 40% in taxes...haha
I too pay quarterly taxes and so know exactly what I pay and I too have a similar attitude. I have my opinions, I debate my opinions from time-to-time, but ultimately I see what limited control I have over taxes, politics, inflation, etc and I don't get too bent out of shape about them. Do I try and minimize my taxes and do I wish my taxes dollars were more effectively used for the greater good? Sure, absolutely, but I don't lose sleep over it at night because these are ultimately out of my control other than my vote, which I always cast every election. Life is too short to lose sleep over things that are out of your control.
People seem to have a really hard time understanding graduated/progressive taxation and the difference between marginal and effective tax rates.
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