Happy Tax Day!

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Jay Honeck

Jay Honeck

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Jay Honeck
So, for the 21st consecutive year, I have paid my CPA to compile my year-end business and personal tax returns. As has been true ever since I became ineligible for the 1040-EZ form, the return is many inches thick and I simply sign on the dotted line and pay whatever he says is due, without any real understanding of how or why.

Discussions about the Tax Code always feel like a discussion about electricity, or gravity, in that everyone knows it's there, some people can make it work for them, but no one REALLY understands what's happening at the core. Can anyone here say they actually know and understand the tax code? Even my CPA needs a massive library and a bunch of computer software to compile our corporate return, and he's been "in the biz" for decades.

Oh, and yes, corporations pay taxes. I don't care what CNN says. :cool:

So enjoy what's left of the day (and I hope you appreciated the extra 3 days they gave us), guys. I suspect I'm not the only one here that longs for a simpler tax code.
 
All you need to know about U.S. taxes, is that the only guy I know who owns both a P-51 and a Hawker Sea Fury, is listed as the #3 Tax Attorney in the entire land.
 
Used H&R Block Software for many years... so easy.... just answer questions. Highest income ever this year and got my largest refund ever, too. ;) Only cost me $50.
 
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CPA for me, got my deductions clipped, hit by AMT and hit by Obama's and congress extra tax. Wrote a hefty check, thankful I had the money to do so unlike some of my accountant's other clients who are truly screwed. Oh, and corporations don't pay taxes Bernie and Hillary told me so.
 
When I was in private pilot ground school and any objections came up along the lines of "But that regulation doesn't make sense!" the instructor would say "These are the same people who brought us the tax code." Always ended the discussion.

The tax code could be very simple if it was not used for social and economic engineering. Tax breaks for green industries because we need to stimulate that technology development. Tax breaks for oil industries because we need to stimulate job growth. Extra taxes for retirement because people are not forward looking enough to prepare for their own. Etc. Oh and a sliding scale because those who have more should pay a higher percentage.

Whether or not you agree with any of those, (I do with some and not others myself) it complicates the code. Layers upon layers of various special exceptions (for more or less) because that segment should be treated differently. To the behemoth we have today.

John
 
I filed and paid what I owed and while that was painful, it's not nearly as annoying as all these emails from companies asking what I'm doing with my refund or "post-tax" deals from retailers.

Don't they know that not everyone actually gets a refund? :(
 
Caramon13 said:
I filed and paid what I owed and while that was painful, it's not nearly as annoying as all these emails from companies asking what I'm doing with my refund or "post-tax" deals from retailers.

Don't they know that not everyone actually gets a refund? :(
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How can a form titled "Income Tax Return..." end up showing that you owe taxes? Clearly a government document that has been wrong for decades.
 
Nothing political about this thread!

But...

This thread is a testament that D.C. isn't nearly as effed up as the average American is. When did we quit believing it was our patriotic duty to pay our fair share of taxes and rather we choose to ***** about every penny because we no longer have a sense of community?

The last year I was in business (2011), I signed 16 returns but rather than *****, I simply thanked this great country for affording me the opportunity to have business that prospered, flourished, and needed my signature on those returns.

Taxes are pretty much as low as they've ever been. Government waste is nothing new. What's changed is the selfishness of the average American.

IBTL!
 
Wasn't Cruz going to try to end the IRS?


Just did mine, me plus LLC, fun times.
 
Guessing all of those people before 1913 were unpatriotic
 
timwinters said:
Nothing political about this thread!

But...

This thread is a testament that D.C. isn't nearly as effed up as the average American is. When did we quit believing it was our patriotic duty to pay our fair share of taxes and rather we choose to ***** about every penny because we no longer have a sense of community?

The last year I was in business (2011), I signed 16 returns but rather than *****, I simply thanked this great country for affording me the opportunity to have business that prospered, flourished, and needed my signature on those returns.

Taxes are pretty much as low as they've ever been. Government waste is nothing new. What's changed is the selfishness of the average American.

IBTL!
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We all pay our fair share, in and outside of income taxes, crazy stuff but the real patriots of this country were living here before the thievery of the IRS was brought upon us.

The only folks who aren't doing their "fair share" is the government.


The government doesn't afford you any opportunity, the US constitution does that, YOU make opportunity, not the government.


EppyGA said:
Guessing all of those people before 1913 were unpatriotic
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Beat me to it, crazy how much koolaid some folks drink.
 
timwinters said:
When did we quit believing it was our patriotic duty to pay our fair share of taxes and rather we choose to ***** about every penny because we no longer have a sense of community?
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I buy the Federal government a brand new car every year. A nice one. I have never bought one for myself in my life. 45% of households pay no taxes. The federal government takes money from me and my family by threat of deadly force to give to others, including those that are not from my community. I submit that I pay more than my fair share.
 
Cpt_Kirk said:
I paid in for the first time. Bummer..
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Ditto..this year was the first year since I've been doing my taxes that I've actually ended up owing the government ANYTHING. Most years I get a sizable refund..

I blame all the 1099 work I did..but hey at least it let me fly a bit more than I would have been able to otherwise!
 
I always owe federal around $200, I usually get a $100 refund from the state.
 
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.
  • Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).
https://en.wikiquote.org/wiki/Learned_Hand
 
I didn't mention it, but perhaps I should: For the 14th consecutive year, the Number One benificiary of my business, receiving more profit than Mary, me, and all of our employees COMBINED was the local, State, and Federal government.

Ponder that, next time you're in a discussion about small business.
 
Jay Honeck said:
I didn't mention it, but perhaps I should: For the 14th consecutive year, the Number One benificiary of my business, receiving more profit than Mary, me, and all of our employees COMBINED was the local, State, and Federal government.

Ponder that, next time you're in a discussion about small business.
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That's flat disgusting.
 
I could have bought several nice airplanes for what I paid this year! I exercised some options which had grown considerably but were going to expire. Ordinary income on top of my salary and a good bonus. OUCH.

First world problems, I suppose.
 
Jay Honeck said:
I didn't mention it, but perhaps I should: For the 14th consecutive year, the Number One benificiary of my business, receiving more profit than Mary, me, and all of our employees COMBINED was the local, State, and Federal government.

Ponder that, next time you're in a discussion about small business.
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I would love to see the math on that.

You make a couple of claims, but it seems that the veracity of such claims would depend on many structural issues with the corporate entity.

Items like are you paying yourself a salary, is the Corp (S-Corp, LLC, ??) being taxed, or is it pass-through to you as a individual.

Are you claiming the amounts as taxes that your employees are owing (FICA, MED, etc...)

If your claim is true, that the "
Number One benificiary of my business" is government, I would highly suggest you find a good tax accountant and rid yourself of the one who seems not to understand what you are paying him to do.

I have 3 different companies, lots of employees, one company makes a lot of money, one company "breaks even" every year, and one lost money this year (start-up phase). I can assure you, I am the number ONE beneficiary of my capital, labor, and ideas. The government is a long ways behind me, my employees, and partners.

I don't complain about taxes, government regulations, and the weather. Much better use of my time and energy focusing on things that are far more important.
 
Jay Honeck said:
I didn't mention it, but perhaps I should: For the 14th consecutive year, the Number One benificiary of my business, receiving more profit than Mary, me, and all of our employees COMBINED was the local, State, and Federal government.

Ponder that, next time you're in a discussion about small business.
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And yet, the national and state debt keeps growing..I'm sure that makes you feel even better paying those taxes..<sigh>
 
Caramon13 said:
Ditto..this year was the first year since I've been doing my taxes that I've actually ended up owing the government ANYTHING. Most years I get a sizable refund..

I blame all the 1099 work I did..but hey at least it let me fly a bit more than I would have been able to otherwise!
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Just because you got a refund doesn't mean you didn't pay anything in. The question is whether they paid you back more than your employer withheld.
 
JoseCuervo said:
Items like are you paying yourself a salary, is the Corp (S-Corp, LLC, ??) being taxed, or is it pass-through to you as a individual.
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If it's an S-corp, then by definition the income is passed through.
 
PPC1052 said:
Just because you got a refund doesn't mean you didn't pay anything in. The question is whether they paid you back more than your employer withheld.
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I know, I'm not implying it was anyone's fault other than mine. I even said as much regarding the 1099 work. Shame I have to withhold half of what I earn for contract work just to cover my taxes for the year. Highway robbery actually..
 
Caramon13 said:
I know, I'm not implying it was anyone's fault other than mine.
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I would submit that "fault" isn't the right term. Why should you give the government an interest free loan by over paying taxes sooner than you have to? You should plan NOT to get a refund. Anything else is you giving the government free credit.
 
There are several taxation myths that must be tossed before one can accurately assess tax burden:

Myth #1: Tax entities are different, and matter.

I make no distinction between local, state, and federal tax entities. These are artificial constructs, invented to disguise the true burden of taxes. I view them as one monolithic group, which, in fact, they are.

Myth #2: Businesses only "collect tax for the State".

This is the ultimate koolaid, a brilliant ploy to soften the blow and make the burden of paying business taxes more palatable.

Example: The "payroll withholding" tax is the ultimate sham, in which the government tells us that your employer is merely "withholding" taxes from their employees paychecks. Thus, the myth that you are making (for example) $10/hour is maintained.

In real life, you are being paid $7.50/hour, and your employer is paying a $2.50/hour "employee tax" -- the most regressive, anti-employment tax ever devised.

Every kid I've ever hired has instantly seen through this sham, the moment they received their first paycheck and divided it by the hours they worked. Yet, for reasons unknown, by the time they reach voting age they have completely bought into the mythology.

Second example: "Sales Tax". The myth is that the store is merely collecting this tax for the government. In real life, the business is simply paying it out of their revenues, which they have had to jack up in order to pay it.

Want proof? Just watch what happens to a business owner who doesn't pay that tax.

Third example: Hotel/Motel tax. At 13% of gross, it is one of the most burdensome taxes ever devised, equal to a 91% tax on profit. Few other businesses in history have survived a tax rate of that magnitude.

Want proof? When the Feds placed a 20% tax on every movie theater ticket sold, back in the 1940s, thousands of theaters failed. That tax ultimately went away, but not until the 1950s.

These are the main reasons I have advised both of my children to NOT become entrepreneurs. We have never had a problem winning in the marketplace, but the tax burden is so high as to make it questionably worthwhile. The monthly paperwork and processes alone are enough to drive you batty.

As a business owner since 1988, it's frustrating to see how effectively the government has taught and maintained these myths -- but, of course, their very existence depends on them.

BTW: Thanks for not making this discussion political. I think we are doing pretty well at assessing the process without starting down the pointless path of blame. Suffice it to say that taxes in America transcend politics and parties, and no single party has all the answers..
 
Jay Honeck said:
There are several taxation myths that must be tossed before one can accurately assess tax burden:

Myth #1: Tax entities are different, and matter.

I make no distinction between local, state, and federal tax entities. These are artificial constructs, invented to disguise the true burden of taxes. I view them as one monolithic group, which, in fact, they are.
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Not exactly true, but since the 17th amendment, I can understand where you are coming from.
 
Now that I'm retired,I pay every year due to the piddly amount of social security I get. I'm ready for a flat tax. Feeling the Bern,and his 13 % tax rate.
 
Well good news I had a large refund due me this year, about $75K federal!! Of course, I had sent estimated taxes on top of my withholding of $150K, so I still paid a lot of federal taxes including the AMT! I could have gotten the refund and started making quarterly payments amounting to $75K today, but chose to leave it for the feds to babysit the money until next year. ;)
For those who got a refund, you still likely paid taxes, just more than you should have, unless you're a single mom with a couple kids, then you probably "got back" more than you paid in by a large margin!
 
bnt83 said:
How can a form titled "Income Tax Return..." end up showing that you owe taxes? Clearly a government document that has been wrong for decades.
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We're returning, to visit, those taxes from the prior year, and we're returning documentation to the IRS that confirms we were taxed properly, by law.
 
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