Wednesday, January 16, 2008

Taxes, Taxes and More Taxes....

Everyone, guess what time it is... Tax Season is quickly approaching (or maybe its already started). Either way, I hate this time of year. I am usually happy if I get close to break even, but generally I have to pay.

I had an interesting conversation at work the other day on that subject. One guy said, its stupid that I have to actually pay a tax when I file. He maxes out his taxes and gets a "huge" refund every year. Now I personally think that is insane. Think about what you are doing if that's your strategy. If you get a refund every year, that means in effect you loaned the government your money and paid additional money to file a form to get back what you over paid...Interest free. If any of you are giving out interest free loans, I'll gladly take one.

Have you ever heard that saying, that you have to work until May 10 (can't remember exact date) to actually pay all of your taxes in the year... Sound upserd? Well it actually isn't. I believe you probably work longer than May to pay your tax bill. The US actually has one of the lowest tax rates in the world. Despite that, do you know how many different taxes you pay... Allow me to help illustrate. Below is a listing of some of the taxes out there... Maybe you've seen these before, maybe you haven't....

Accounts Receivable Tax, Building Permit Tax, CDL License Tax, Cigarette Tax. Corporate Income Tax, Dog License Tax, Federal Income Tax, Federal Unemployment Tax (FUTA), Fishing License Tax, Food License Tax, Fuel Perm it Tax, Gasoline Tax, Hunting License Tax, Inheritance Tax, Inventory Tax, IRS Interest Charges (tax on top of tax.. one of my favorites), IRS Penalties (tax on top of tax),Liquor Tax, Luxury Tax, Marriage License Tax, Medicare Tax, Property Tax, Real Estate Tax, Service charge taxes, Social Security Tax, Road Usage Tax (Truckers), Sales Taxes, Recreational Vehicle Tax, School Tax, State Income Tax, State Unemployment Tax (SUTA), Telephone Federal Excise Tax, Telephone Federal Universal Service Fee Tax, Telephone Federal, State and Local Surcharge Tax, Telephone Minimum Usage Surcharge Tax, Telephone Recurring and Non-recurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, Utility Tax, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft Registration Tax, Well Permit Tax, Workers Compensation Tax.... How can we forget Tolls, The State Lottery (Voluntary tax, or some call it the stupid tax), Cable tax, Tire Tax...

Depressed yet...I am. So, maxing out your taxes and getting that "big refund" every April is not a good idea. Consider it fools gold, if you are not a saver, then maybe its a good thing. But overall, you save in the long run by owing a check at tax filing, not getting a refund. Here is what is upserd, there is a billion dollar tax industry that exists to get you a refund. Think about the revenues of H&R Block, Turbo Tax, Quicken / Intuit, Jackson-Hewitt, and the thousands of accounting firms out there. Happy Filing!

10 comments:

Janell said...

You are SO right, Joe. I'm as apalled as anyone with the tax list. So many of them are imbedded, so that we will pay them without paying attention. That's why I'm in favor of the Fair Tax; that list would be history.
Go to www.fairtax.org !!

Janell said...

FYI: I think you mean 'absurd' and not 'upserd.' Don't feel bad, though; brilyunt people ar alwayz bad spellerz.
(Maybe Jamie Dawn can make a new meaning for upserd.)

Sue said...

Maybe 'upserd' is just "absurd" only worse. I just paid my 4th quarter estimate to the IRS. That really depresses me. When taxes are taken out of your paycheck, you don't miss what you don't get. When you have to pay quarterly it feels more like it is coming out of your pocket. That is upserd.
Sue

Mary Connealy said...

I wonder how bad it will be when we get Nationalized Health Care?

We'll be working until September to pay all our taxes.

My tax guy...who is a genius by the way, used to work for the IRS... says he expects to see the end of the IRS in his lifetime.

That would really simplify all our lives wouldn't it?

The Fair Tax sounds fair but honestly how long'll it STAY Fair, Washington always finds a way to mess things up.

Mary Connealy said...

Oh, I know what else.
I read somewhere that most of us, paying that long list of taxes Joe had, pay around 45 % of our income in taxes.
Guess how much a woman makes compared to a man. About 45%.
What that means is the whole income from a wife's work is going to TAXES.
All the day care and social ills that come from children growing up so unsupervised stem from paying such high taxes.

LaDawn said...

Here in the UK we call that day Tax Freedom day. We do have nationalised Health Care. In 2007 tax freedom day was 2 June. It took us 152 days from 1 Jan to get free. them's the facts.

Good post, Joe!

Joe B said...

I don't generally use spell check when posting. I just go with the Fonetic spelling... thanks for the correction!

Ralph said...

I'm with you. We try and break even every year. For a number of years we had it down we either had to pay or received a refund but it never exceeded $50 either way. That was perfect. Lately the laws and deductions keep changing and it gets harder and harder to know what to do to break even.
Ralph

Mary Connealy said...

Oh, and I didn't mean a woman makes 45% what a man makes, I mean the household income is made 45% by the woman and 55% by the man.

Joe B said...

Thanks for the correction Mary. I wasn't sure I agreed with the original comment. I thought you've been listening to LA and Steph and got into the feminism thing.

He he..