Even though April 15th is the official date to file your Federal income taxes it falls on a Sunday this year. Normally, that would mean that they were due on the next business day. The IRS has decided to give us another day and declared that all Federal Income Tax forms must be filed by April 17th this year. Most people I know will have already filed their taxes as they were due a refund. This year might be a little dicey depending on all the changes that the President wanted to be implemented. After reading through the forms I am still safe from having to file as I have no “Earned Income” from a job and our self-employment income just about zeroed out with what we spent to make our crafts. Sadly, my book income has gone down as well. Maybe next year, right?
Anyway, I have been reading about all this “Flat Tax” stuff where everyone pays the same percentage across the board and doesn’t have to file taxes. Personally, I think that would be a great idea but what percentage would be fair and shouldn’t those in the higher income brackets still pay more? Just doing the math it seems that those making more would still have more accessible income if they paid the same percentage. With all the hundreds of thousands of tax regulations that have already been enacted it would take a clean sweep to every clear it out. Yes, our taxes should be simple and Yes, I think we should pay as we go on earned income and that’s it.
It’s a little bit trickier with Self Employment income. Some months you make lots of money and some months you don’t. Some days you have to buy more materials and some months you have to replace an important piece of equipment. Large equipment costs run into amortization of the costs over years and depreciation. You have to file every quarter and at the end of the year whatever, overages or underages you have accumulated are then paid. But a flat tax rate that is due on each quarter might help businesses too. It is all so crazy. Make sure you hire a good accountant to keep track of all this stuff for you. For me, I just record my receipts on an Excel spreadsheet and keep them in a plastic bag until the end of the year. Then I file them in a box. I also just record my sales and book income on another page of the spreadsheet. At the end of the year, I subtract the expenses from the income and see what I have left.
16th Amendment:(1913) “Article I, Section 8, Clause 1: The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
I know we all believe that the Congress has gone overboard with this section of the Constitution over the years. They have made it so complicated that no normal human could figure it out on their own. They have ensured that we have to surround ourselves with accountants, lawyers and financial advisers that will charge us to keep us informed of new requirements and keep us from going bankrupt. That would be nice for those who can afford it but they need a “Taxes and Regulations for Dummies” so that regular people could figure it out and stay out of trouble. And, I have no trouble providing for the common Defence but what exactly did they really mean about the General Welfare of the United States? That section leaves so much up to interpretation and abuse.
We will leave you with the following: Benjamin Franklin, who wrote in a 1789 letter that “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Ain’t that the truth!?!?
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