Tax surprises

[Monkeyleg]

I was reasonably sure that our personal tax refund would be small, as in a few dollars. I like it that way. Instead, between state and federal refunds, we're getting back about $1000.

Not the way I wanted it, but OK.

For my very small business, though, I was expecting to owe maybe $500. Instead, I owe about $4500. That one came out of left field, as my accountant assured me that there would be little if any tax liability.

It could always be worse, though. Back in 1990, because of my change from sole proprietorship to a C corp, I was hit with a personal tax liability that was $30,000 more than what I had anticipated. That one really hurt.

[BozemanMT]

Holy crap!!!!!!!!!
4500?
what did you do?
you need to buy more stuff, get some losses.
owwwwwwwwwwwwwwwww
that hurts, a lot.

[Brad Johnson]

Yeah, corp taxes can hop up and bite you when you least expect it - usually at the time when you've done some capital improvements or retired some debt and are short on actual cash.

Brad.

[TaxPhd]

Why didn't you bonus out the income so corp. income would be zero?

[Monkeyleg]

"Why didn't you bonus out the income so corp. income would be zero? "

If I could have done that, I would have. If I'd known in advance that was going to be my "contribution" (thanks, William Clinton for that term), I would have adjusted things before the end of the year.

Compared to previous years, $4500 is small change.

My accountant of some 16 years died last year, and his son took over the business. I talked to the son about the corp's tax liability back in August. Apparently we're not speaking the same language that his father and I did.

That will change.

I miss the father, though. Back in 1990, when I got hit with that $30,000 in additional personal taxes, I called some other business owners I knew. A few of them recommended Bob. (The father).

Bob was a bit eccentric, but very creative. He looked over the yet-to-be-filed return, and some other things. When Bob was thinking hard, he always had this look on his face like he was really trying to have a bowel movement.

Anyway, after looking at the papers, he said, "take your wife off the payroll. There. I just saved you $18,000. Now, do I have your business?"

Yep.

[HankB]

Doing my taxes now . . . thanks to some ISO stock options I exercised, I found that I've got some AMT liability. <note to moderators: we NEED the :cuss: and :barf: and smileys from THR!!!>

Did my mother's taxes, too . . . her investments did better this year, so despite making quarterly estimated tax payments, she's still got a couple of thousand dollars' worth of liability. <:cuss: and :barf:  >

I WISH I had a cash source of income the .gov didn't know about . . . 

[Art Eatman]

Yeah, that (bleeping) AMT!  Thanks, Bob Dole, "Mr. Republican", who never saw a tax he didn't like.  I'd set up my whole little financial world quite nicely, and then came the AMT.  It burned me some $4,000 in 1984-sized dollars.  I had to rework my whole deal.

"The power to tax is the power to destroy."

Art

[roo_ster]

This is the first year we as a family used an accountant rather than Turbotax.

The cost will be roughly the same, but the time spent on the whole deal was less.

Anybody in DFW who wants the number, just holler.

[Waitone]

IIRC the AMT will reach out and touch a whole bunch of other people next year if congress don't get busy.

[Monkeyleg]

Well, I just found out that I may be hit with an even bigger tax surprise. Problem is that it's my problem. For all the years I've been doing my own personal and business tax returns, I just didn't see this one coming.

I hope I'm wrong. If I'm not, just poke your head out your window and listen to the scream coming from Milwaukee.

I was going to close by saying that I'm surprised they haven't taxed my dog yet. But then I realized they already did that, too.

[roo_ster]

My BIL is making decent money for the first time in his life, this year.

He has been known to not file tax returns in the past.  He says it is because he s a "nonconformist."  I tell my wife it is becaue he is an idiot & she agrees.

It never bit him in the butt.  I guess the IRS had bigger fish to fry.  I 'spect this year may be his "come to Jesus" year with with bureacrats with the authority to ruin his life.

Aside from the fact that my wife does not want to see him raked over the coals, she is concerned because their father bought them some land way back when...in both my BIL's & my wife's name.

My BIL (who was tossed from both the Army and the Navy) says he'll defend "his land with a bullet."  Right...  I suspect that we may end up sole owners of the land when his certain-as-death run-in with the IRS comes due.  I do not intend to bail his non-conforming *expletive deleted*ss out of trouble, but my wife would like to improve the land...something should could never do with dumb *expletive deleted*ss my BIL on the deed.

I would be willing, however, to buy him out of the land.  Heck, my wife is the one who has kept it from being auctioned off on the courthouse steps thus far, as she pays the property taxes on it every year, something numb-nuts my BIL could not be bothered to do.

I swear, some folks are not only dumb & ignorant, but are uneducable.  We'll see how the IRS handles yet another "non-conformist."

[Art Eatman]

jfruser, I think I'd see if your wife can buy out BIL.  IRS can seize an undivided interest as easily as anything else.

I finished doing the final tax return for my mother's estate, yesterday, as well as my own.  The amount owed wasn't onerous, which was a blessing.  Life is now much simpler.

Art

[HankB]

Yeah, that (bleeping) AMT!  Thanks, Bob Dole, "Mr. Republican", who never saw a tax he didn't like. 

My mother is getting bitten since her Social Security is being taxed . . . thank you. "Mr. Republican" Ronald Reagan, who signed a law subjecting 50% of Social Security payments to income tax. Thank you, William "Slick Willie" Clinton, who fixed Reagan's blunder, by increasing the taxability of Social Security benefits to 85%.

Taxing Social Security is really crooked money laundering . . . consider . . . money comes out of the trust fund, through the recipient's hands, and then the .gov takes a slice. Does it go back INTO the SS trust fund? No indeed . . . after being laundered through the accounts of millions of elderly pensioners, the money the .gov takes goes into the general revenue accounts, so they don't even have to PRETEND that these Social Security dollars will be paid back.

As I said, we really need THR's :cuss: smiley.

[Brad Johnson]

jfruser, I think I'd see if your wife can buy out BIL.  IRS can seize an undivided interest as easily as anything else.

Art

Not only that, they can attach any personal property of the interest-holder as well (read: the rest of everything you and your wife own).  Get control of the property, or get out of it.  Your business association with BIL could easily lead to Very Bad Things.

Brad

[grampster]

My company paid me a year's pay to retire early.  (They didn't know I had planned to leave anyway; good thing I kept my mouth shut)  Anyhoo, .gov grabbed about 1/3 of the buyout.  Other than the fact that I think our tax structure is a felony, I'm grateful for the unexpected lump sum that I never expected.

My point is that many folks get these buyouts and they were not planning to retire.  Somehow, having the .gov grab 1/3 of the cash has an immoral overtone.  Person has to take of a family and hope to find another job and the .gov rubs his nose in it, confiscates 1/3 of his dough and redistributes it to other folks that perhaps don't deserve it.  Something wrong there.

Oh, I got my taxes back from the CPA last week.  I owe .gov another $5160.00 on top of the rest of it.  They taxed 80% of my SS to boot.

The dark little genie in the back of my head would like to see another Million Man March;  One in which a million men walk into Congress, grab the .Sen and .Rep critters, tar 'em, feather 'em, put 'em on a rail and dump 'em in the Potomac River.

[Brad Johnson]

They taxed 80% of my SS to boot.

Nothing beats paying tax on a tax you already paid, except maybe a colon resection without anesthetic.

Brad

[Monkeyleg]

Grampster, sounds like .gov is doing a fine job of reaming you.

It's reached the point where I'm loathe to listen to a speech from any politician at any level of government. All they do is announce new programs that will appeal to a part of the electorate they're not polling well with at the moment. I just sit there with my calculator as the politico's spend more of our money.

In the 1950's the average federal income tax on a family of four was five cents on the dollar. That's how my folks raised five boys with my mother staying at home. Today, the number of families with stay-at-home moms is miniscule. And that definitely has a social effect.

So, not only is the government robbing us blind, but it's also contributing to the very same social ills it claims to be trying to cure by spending more.

Of all of the monies that I handle, the only monies that aren't taxed are for the political action committee that I run. Those monies go to candidates for public office. Gee, I wonder why those monies aren't taxed?

[TaxPhd]

In the 1950's the average federal income tax on a family of four was five cents on the dollar. That's how my folks raised five boys with my mother staying at home. Today, the number of families with stay-at-home moms is miniscule. And that definitely has a social effect.

I agree, we are way over taxed,  but to be fair, that is only part of the problem.  A huge problem is young people wanting immediately what it took their parents 30 years to do.  Newly marrieds buying a house with an interest only loan, 80/20 loans on the house with no down.  Financing fancy cars, big screen TV's, luxury vacations, and eating out at expensive restaurants.  Those things are nice, but taking on huge debt to do it is just insane.




Scott