US tax madness
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- scarabin_net0
i can't see any designer making a $1000 salary for the entire year
- Greedo0
You get to deduct expenses. We all have expenses. I pay tax on my salary, and probably way more than you, regardless of 'how much i spend to make it'. The fact remains that you cleared $1000 in profit, which the government, like it or not, is entitled to a share thereof.
If you don't like this, find a way to declare a loss, come up with more deductions, invest in real estate, get married, have kids, whatever it takes. But that's the system.
- TheBlueOne0
If you made $31,000 dollars on the year you'd be paying taxes on that, not the $1,000...I'm still lost on what your accountant is doing as per your initial description...
From that 31,000 you'd deduct all (or most) the direct business costs...so...and wouldn't you bill your clients directly for costs related to their projects anyway??
- i understand that, but no matter how u name it it's still a simple math: You made A; you spend B, you end up with $1000.pr2
- max_prophet0
sounds like you need to rethink your business.
- ismith0
I'm still fuzzy on how your work-related expenses could possibly be just $1000 short of your total income...
- TheBlueOne0
pr2 it sounds like you're making some kind of Chewbacca defense to the IRS here...sense, this makes none...
- i can't comprehend you don't understand simple math and basic logic... cause that's all there is to itpr2
- ismith0
By the way, if you don't mind me asking, what did you do for your portfolio to get into Cooper Union? I believe I had a thread about this but it turned into a little bromance session...
- ukit0
Uh...if I'm reading this right the situation could be much worse than you think. You need to pay taxes on everything you made, not just the $1000 left over after you have spent the money you made. The government doesn't give a shit what you spend on rent, food, and software. Maybe I am misunderstanding you here...
- thats true if your an employee only and not freelanceseed
- TheFatBaron0
Yeah dude. That $1000 is profit/savings, not income. Or do you think I can choose to not pay taxes on the $2k that I pay on my house each month?
- pr20
Ok, it loks like there is a general confussion here. I started this thread to show in simple numbers that the tax system makes no sense.
So using BlueOne's example: I made 31k and spend 30k on my business, so i walk away with 1k. That 1k is definitely not enough to pay for my food, house etc -- well though luck, BUT the gov't still wants a piece of that action (!!!). So the gov't doesn't care if you don't have enough to feed yourself, they still make up some silly formula that says that you owe them money.
- every meal was for your buisness, evry drop of gasoline, every bag of rice, every bar of soap?capsize
- If every thing was then i would be happy dancing around with 1k leftover in my pocket, but it wasn't... That's my point!!!!!pr2
- no, how do you spend money on living expenses with only $1k let over? are you deducting everything you spend?arthur
- capsize0
you went to cooper union and paid how much tuition?
- ukit0
OK - so you are actually spending it ALL on your production costs. Well listen, I agree taxes are a bitch, but it seems the problem is more with your rates and your business model. I mean, if you only pocket $1000 in a whole year, how can you survive, taxes or no? I'm assuming you have a second job?
- hahacanuck
- Thank you...I'm not the only one not getting this at all...TheBlueOne
- i like how it's not the pig picture you guys care about but only if i'm OK or not on the 1k.year.pr2
- hahaha TBO, no one is...7point34
- we're trying to see the big picture, but it's fuzzy.arthur
- fyoucher10
anything over $600 the feds require you to file for and pay taxes. expect to pay like nine-gees ($9,000.00) in taxes if you made 33k....around 33% more or less. good luck. top ramen yo!
- pr20
Dude, you are missing the point. I survive OK, but the underlying way of calculating the taxes is all fucked up, it's just it wasn't until now with a clear example where i came to this realization.
- What is it exactly that you don't agree with? Having an income tax in general? Or just how much it is?ismith
- how many times do i have to repeat it? that the gov't wants me to live on $1000/year!pr2
- or rather they want their money no mater what and if you have enough to live on -- they don't give a shit.pr2
- max_prophet0
The US doesn't have a tax-free personal allowance?
- max_prophet0
How can you survive ok on $1000 per year unless you are claiming false expenses or are you surviving on savings/trust fund?
- 5th amendment....pr2
- but that's besides the point herepr2
- 5th amendment? WTF? Are you dealing drugs?TheBlueOne
- you don't provide the information the other side will never ind outpr2
- ah, the truth!arthur
- Greedo0
I think you're missing the point. Find $400 in deductions right quick and you're not paying any taxes.
- TheBlueOne0
Is all your work freelance, or do you work for someone and get a paycheck? Or both?
- freelancepr2
- And you're not incorporated in any way?TheBlueOne
- now i;m thinking about it.pr2
- TheBlueOne0
If you're working freelance, then you get taxed on what you claim you made for the year, minus deductions and any 401k contibutions, etc...I don't understand this "extra $1,000" thing. You're not paying a capital gains tax here...
- TheBlueOne0
I mean, you did work for x number of clients in the year and made say $30,000 in sales. That income puts you in a particular tax bracket and you pay taxes based on a % depending on that number.
Now if you're saying, in the course of the year you outlayed $30,000 to produce $31,000 worth of work then you are doing something very horribly wrong...
- Or his accountant made a big mistake, which is what I'd hope for at this point...ismith
- he's a blagger, that's all.max_prophet