As usual, I waited until the last minute to complete my taxes this year. I had good intentions of getting a head start, but the farthest I ever got before this weekend was labeling a folder “2005 Taxes”. I even had high hopes of getting an accountant, but then waffled on that, thinking that my taxes would be simple enough this year that I could just use H&R Block’s online tools again.
I can’t remember the last time (if ever) that I’ve had a tax refund. Most of my working life has been non-W2, so it’s rare that I’ve had the company I work for deduct taxes from my paycheck. And even though for the last few years the majority of my income has been W2, we’ve had the situation where my wife’s company didn’t withdraw enough from her paycheck and our side work has bumped up our earnings enough that we had to pay extra.
Even though I knew I’d have to pay again this year, I’m still recovering from the blow of my tax bill. I suppose one could construct an equation relating one’s estimated and actual tax liability to arrive at a result expressing the number of days that a tax payer will be angry at the government. I think it’s safe to say that my result would be towards the right side of the bell curve.
I think it’s also safe to say that the bell curve would end nicely right around 6 months from now, when everyone gets nice and cheery again (OK, maybe just complacent) about the government, right in time for election season. If elections were held April 16th I would wager no politician would see a 2nd term, and the Libertarians would see a 2000% boost in power.
Sure, I could end this yearly ritual of anger and depression by just paying my quarterly estimated taxes, but that’s always been a lot harder than it sounds. I’ve never had self-employment income that was evenly distributed from quarter to quarter, so I have a hard time forking out something like $5K in Q1 when in Q2 I’d like nothing more than to pay off that $5K credit card bill. Sure, there’s always that small thing called an underpayment interest penalty, but I like to fool myself in thinking that it offsets the financial advantage I have in holding on to the money longer. Notice how the IRS doesn’t give you an overpayment interest credit?
5 responses so far ↓
1 Ian // Apr 20, 2006 at 8:42 am
I’ve learned that the trick is to stay mad all year round, that way you don’t notice it so much come April.
I pay estimated too, it’s tough, but I put aside 30% of every income check to be safe, and it works. Whqat gets you is the extra 15.3% for Social Security.
If only they would pass the Fair Tax… http://usgovinfo.about.com/cs/taxes/a/aafairtax.htm
And here’s a fun “Are you a libertarian” Quiz:
http://www.self-gov.org/quiz.html
2 ade // Apr 20, 2006 at 11:55 am
The Fair Tax is a great idea. I’m sure there are negatives I haven’t thought of, but it just makes a lot of sense to me. Especially considering how low our savings rate is in the U.S., it doesn’t make sense to penalize someone for money they have just sitting in the bank. I imagine it would also save a ton of money in governement spending on the IRS, and also drastically cut down on cheating. As long as the revenues balance out, I don’t see who gets hurt except the accountants.
That’s a great quiz. My results today are probably a little skewed, but here it is: http://www.theadvocates.org/quiz-score/draw.php?p=6&e=6
3 Ian // Apr 21, 2006 at 8:25 am
I can’t find it, but I read somewhere that the FairTax was invented when some one asked some geniouses at MIT or some place to come up with the best workable ideal tax code possible. I actually want to read the book, even though I might find it boring (I normally read sci-fi.)
Neal Boortz (the author of the FairTax book) is on our radio every day starting at noon on AM 1430, he’s much more entertaining than a stuffy book and sometimes answers questions about it on air.
4 Ian // Apr 21, 2006 at 8:25 am
There’s nothing smarter than mispelling the word “genius”
5 ade // Apr 21, 2006 at 9:57 am
What about misspelling “misspelling”?
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