Random Thoughts Thread

[PretentiousHipster]

Yea pretty much everyone does. I'm sure that's an international thing. Some employees are contractors (gig economy, some accountants and maybe a few lawyers) and are not on payroll. The former tend to make the mistake of not saving up nor paying for taxes periodically, and they end up having to pay a few thousand for tax season.

They tend to form their own corporations to make the process easier. Sometimes they set up a payroll to handle all this, sometimes they just take dividends out. Of course with that you have to pay both personal and corporate tax, but they usually save money still.

[RCBH928]

Excuse my naive questions, we don't have taxes here I just assumed the gov. takes the tax from the payroll (in US) but then I hear about people "filing their taxes" and hiring accountants and use TurboTax/Quicken to do so and I am wondering what are they doing if the gov. took their tax already.

[Nemoide]

Tax law in the US is extremely stupid. Employers report what you make and automatically deduct taxes to both Federal and State governments. But then you still have to file your taxes, which is a fairly cumbersome process that most folks don't really understand so a lot of people use TurboTax. After filing, sometimes they tell you that you owe extra money (which happened to me a lot when I worked multiple jobs) but a lot of people get a refund from overpaying via their employer.

I typically start with TurboTax which advertises itself as being free but then reach a point where they tell me "oh, it looks like you made $11 in interest from a savings account this year, that requires TurboTax Premium which costs an extra $79.99 in order to file your taxes"
I'm going to actually try to do my taxes totally by myself the old fashioned way this year. But I might give up and be stuck with TurboTax again...
If there wasn't a pandemic going on, I'd try to meet with an AARP tax aide, who provide filing assistance to middle- and lower-income folks. But I'm still isolating myself as much as possible and don't plan on changing this behavior until I've gotten the covid vaccine.

[MrPopo]

Excuse my naive questions, we don't have taxes here I just assumed the gov. takes the tax from the payroll (in US) but then I hear about people "filing their taxes" and hiring accountants and use TurboTax/Quicken to do so and I am wondering what are they doing if the gov. took their tax already.

There's a variety of taxes that come out of your paycheck. There's federal income tax, possibly state income tax, and payroll taxes (social security and Medicare, you pay half and your employer pays half). Your income taxes are a progressive tax; income is divided into ranges, like 0-$20k, $20k-40k, etc (not real numbers), and each range is taxed at a different rate. So the first bucket you don't pay taxes on, the next bucket you pay 10% on every dollar earned, the bucket after that is 15% on every dollar (again, not real numbers). So your employer taxes your paycheck assuming you make that much for every pay period for an entire year. If that isn't the case then the taxes taken out will be wrong. There are also a variety of tax credits and deductions available. For example, if you make a charitable contribution then that reduces your tax burden for the year. Filing your taxes is basically you doing a reconciliation of the money you made vs. the money you paid and all your credits/deductions and figure out if you over or under paid. Then you and the government settle up.

[marurun]

Filing your taxes is basically you doing a reconciliation of the money you made vs. the money you paid and all your credits/deductions and figure out if you over or under paid. Then you and the government settle up.

The problem is that for most taxpayers the government already knows the score, but you are required to do all the footwork to come to the same conclusion they did and then file all that paperwork with them so they can confirm that you did in fact dot all your 'i's and cross all your 't's. And while the US tax code can be maddeningly complex for some filers, it is usually the interaction of federal, state, and local taxes that really makes the mess, and because tax preparation companies pay tons of money to DC lobbyists, the federal and state governments have resisted allowing their taxing agencies to simply square up your stuff themselves and just automatically send you a refund or a bill.

[RCBH928]

There's a variety of taxes that come out of your paycheck. There's federal income tax, possibly state income tax, and payroll taxes (social security and Medicare, you pay half and your employer pays half). Your income taxes are a progressive tax; income is divided into ranges, like 0-$20k, $20k-40k, etc (not real numbers), and each range is taxed at a different rate. So the first bucket you don't pay taxes on, the next bucket you pay 10% on every dollar earned, the bucket after that is 15% on every dollar (again, not real numbers). So your employer taxes your paycheck assuming you make that much for every pay period for an entire year. If that isn't the case then the taxes taken out will be wrong. There are also a variety of tax credits and deductions available. For example, if you make a charitable contribution then that reduces your tax burden for the year. Filing your taxes is basically you doing a reconciliation of the money you made vs. the money you paid and all your credits/deductions and figure out if you over or under paid. Then you and the government settle up.

This sounds too complex for the average joe who sometimes look at an electronic device and think "Which button turns this thing on?" I have buttons in my car that I don't know what they do . Things should be more simpler imo, but its not my problem!

[RCBH928]

Any one flying to the moon with $GME?

[RCBH928]

I am not sure if its intentional, but the bad photoshop work on memes on the internet really adds to the comic effect of it

[PretentiousHipster]

I'm going to whistleblow against my company on Monday. This should be interesting and nerve-wracking.

[RCBH928]

use securedrop !