First, apologies for the click bait; a surprise is something unexpected like a hot Fed Ex chick who really is a stripper on your birth day shows up at work. But according to the Internal Revenue Service, the number of non-wage earner filers penalized for underpaying estimated taxes rose nearly 40% between 2010 and 2015; to 10 million from 7.2 million.
This is not a surprise…
A growing number of people who pay taxes quarterly are getting their payments wrong and incurring penalties as a result. These taxpayers often owe estimated taxes because they have income that’s not subject to the same withholding as wages earned by employees. Yeah, it’s called 1099 or schedule C income. You know what the beauty of that is? Unlike a W-2 income where the government jacks your paycheck, business owners and self employed people pay their taxes last after they write everything off! It’s all legal. This is not news and I have an idea, that is, if you want true equanimity in the tax system.
First off, don’t bitch…
The simple part first; anyone can generate a 1099 income and write off expenses, especially, in the gig economy. Secondly, the IRS is useless. Just look at what Eric Smith, an IRS spokesman has to say, “The data suggest that millions of people don’t understand they need to pay quarterly taxes, or at least increase their withholding to avoid penalties.” Um, yeah we do! But we don’t like it or you.
— Chuck Schumer (@SenSchumer) August 9, 2017
Since estimated tax payments are Congress’s way of keeping non-wage earners from having an advantage over wage earners, I ask, “Why?” We create income in many cases and yet while more than 80% of taxpayers have wages that are typically subject to withholding, and most people pay most of their income tax this way, the Feds still can’t stay ahead. Thus the law requires people with other types of income to make quarterly payments based on amounts received during each period.
Ok, here’s the simple, tried and true idea; a 10% flat tax. Write your congressman and ask for two things;
Start Free 7 Day Trial Now: Learn the Real Key to Crypto Trading and Start Printing Money Like a Machine...
1. Any American based company can no longer have off shore shelter accounts, guaranteeing a near zero tax burden. Apple pays .005% and W-2 earners pay 25% with a small “refund” That is over.
2. Any American based company must have 40% of its operations on United States soil. Bethlehem Steel in Los Angeles once employed 2,000 workers. Now, it’s 150 people who “expedite” shipments from China throughout U.S. projects.
The mass exodus of U.S. jobs started in 1961 and has gone unabated through NAFTA. It’s time to bring those jobs, and higher corporate taxes back. Going after the gig economy, raking Airbnb operators and Uber drivers are not going to make up for the $4 trillion in untaxed overseas assets and lack of U.S. jobs…and I don’t mean Burger King…Sleep tight.