8 thoughts on “Income Taxes”

  1. I sympathize.

    Step #1 — find out if all the banks are successfully downloading to the current release of Quicken this year. Wait for business hours to address the several failures. Make a note to not wait for a weekend to find out.

    Step #2 — wrestle the spouse for his check register

    Step #3 — schedule a postponement with the tax accountant

    Step #4 — swear (again) never to stop doing it monthly throughout the year

    Step #5 — laugh at the eternal springing of hope

    • Is this just Federal Tax or does it also cover state taxes? Also, are the complications a reflection of the general complexity of the US tax rules or something special to people in your or PG’s position?

      I ask as a curious foreigner expecting to complete my and my wife’s annual returns in a couple of hours on an early April afternoon and remembering the days when we were poor enough that we didn’t even have to bother with returns (as everything was covered by deductions at source).

      • I’ll jump in with an ill-informed response, M.

        For income taxes in general, if you’re employed on an hourly basis or receive a check from your employer twice a month, it may not be that difficult.

        However, if you’re self-employed with a variable income stream and necessary business expenses you want to deduct from your income, things start becoming more complicated. If you have income from investments, there’s another layer of complexity. If you receive income from sources in more than one nation, things can become very hinky.

        State income taxes vary from non-existent to simple to calculate once you get your federal return finished to just as complicated as federal income taxes or maybe a bit more complicated.

        Here’s a link to a website that discusses state income taxes on a state-by-state basis – https://taxfoundation.org/center/state-tax-policy/

        This

        • Another question to reveal my ignorance of the USA (despite my younger son living in West Virginia where we regularly used to visit pre Covid). Is it actually usual for workers to be paid by check (UK: cheque) or to be paid twice a month? And if so why, and how do they cope if this is because they don’t have bank accounts?

          The idea just seems weird to me, and probably even more so to anyone from western continental Europe. I’m a little bit of a luddite when it comes to financial transactions (I still refuse to trust the security on phones for payments) but I last wrote a cheque three years ago (and one more in 2019, but both were for rather odd reasons).

          On the tax return question, I can see that being self employed will complicate things – especially when it comes to expense claims – but being retired we do not have those problems. About the only claim I have to make is for “gift aided” charitable donations, and that just requires me keeping a note of what I’ve paid. We do have a lot of investments floating around but including them in the returns is easy (though I guess that this just means that I’m better than you and Karen at recording our income as and when it arrives during the year).

          • Payroll practices vary.
            Weekly, biweekly, twice a month, monthly, even daily.
            Likewise check, cash, or direct deposit.
            Stock options, profit sharing, and bonuses also are common.
            Size of firm, type of company, type of employee all factor in.

            With over 32 million businesses in the US there is room for all sorts of diferent practices.

      • What he (PV) said…

        Employer payments — piece of cake.

        Anything self-employed — godawful. Business expenses require a certain amount of discipline to record properly (and defensibly against potential audit).

        State is dependent on Federal BUT…. sometimes it has different deadlines, and it complicates self-employed filing. Again, not an issue for ordinary (employee) filings.

    • Step #4 hit home for me, K.

      I always plan to do everything monthly, but the last day of the month comes and goes with other “more important” tasks and I end up with a giant pile when I receive a nice email from my accountant telling me my paperwork is overdue. She never asks why I need such an email every single year, but I can read her mind, “Nice enough guy, but hopeless with numbers.”

      • I’ll tell ya, before chemo 3 years ago I was much better organized. Good news — dropped so much weight that I’ve never been healthier in my life. Bad news — still clawing back from the better organized times. I can feel the neurons turning over for a nap, some days.

Comments are closed.