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Non profit is a charity. Religious, charitable, scientific, testing for public safety, literary, or educational purposes, and scientific organizations would qualify. Anything that qualifies as a 501(c)3 organization.

A Not for Profit is a company setup to not generate profits. They qualify as tax exempt but not as a charity for tax deductions. Anything other than a 501(c)3 organization. USPS would be a not for profit org.

Additionally, as OpenBSD is Canadian, see the following from the IRS:
Canadian charities. You may be able to deduct contributions to certain Canadian charitable organizations covered under an income tax treaty with Canada.

    To deduct your contribution to a Canadian charity, you generally must have income from sources in Canada. See Publication 597, Information on the United States-Canada Income Tax Treaty, for information on how to figure your deduction. So even if OpenBSD was a Canadian charity, most Americans could not deduct donations. So for an American to be able to make a deduction, an American resident of the OpenBSD Team would need to register OpenBSD as an American charity.

I dunno.. I have a feeling all the taxes they'd miss out on weigh more heavily than any attempt at maintaining perceptions.

Or hey, how about this: let's cut out the middleman.

ATTENTION MARKETERS: I am more than happy to send you a copy of my tax return as part of a special, direct-to-you, promotional offer. Because of market instabilities, the time is right to get onboard this exciting opportunity to buy a copy of my tax return.

Current price estimates are in the $10-$200 range, but I personally guarantee that will be a small amount larger than whatever number happens to go into Box 12 of the 1040EZ form.

Couldn't be simpler. Don't delay! Call before 11:59 pm, April 15th, 2006. Checks, money orders, and Paypal are all accepted.

Like this? http://www.irs.gov/efile/article/0,,id=118986,00.h tml

ok - so the us tax rule .. pro-rates the foreign earned income based on the number of days you were resident in the other country ... so if you're there for 365 days out of the year the deduction is 100% up to
$80,000 ... then you can deduct housing costs too. According to http://www.irs.gov/taxtopics/tc853.html

• The big airlines now charge a $10 or more service fee to book flights by phone or at the counter, because they expect you to do it by Internet (saving them money).
• 64% of Americans research cars on the Internet before buying one
• 68.5 million Americans "e-filed" their tax returns in 2005.

In fact, today riding on the plane I sat next to an old man who uses email to communicate with his kids while on his worldwide travels. The kicker? He doesn't own a computer or know how to use one. He writes his email in longhand, then asks around until he finds somebody to type it in and sent it off, wherever he is. He says this method is faster than mail and more reliable and accessible(!) than getting an international phone connection from remote locations.

Non-profit status does not mean that an organization does not pay taxes. It simply means that the main activity of the organization is classified as tax exempt. Non-profits can earn income from taxable businesses, such as an arts organization running a bookstore that provides income to support shows.

http://www.irs.gov/charities/article/0,,id=96103,0 0.html

Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. An exempt organization that has $1,000 or more gross income from an unrelated business must file Form 990-T, Exempt Organization Business Income Tax Return. The obligation to file Form 990-T is in addition to the obligation to file the annual information return. ......

You may be able to opt out with this:

http://www.irs.gov/pub/irs-pdf/f4029.pdf

Actually, the bigger spending problem is seniors, not the Iraq war or defense spending. Defense is much smaller (at 23% of total government spending even when you include veterans' affairs) than government expenditures on social security, medicare, and other retirement-related programs (which cost 36% of total government spending). My source is the federal government, via a handy pie chart on page 81 of the instructions for IRS tax form 1040.

This problem is only going to get worse as people live longer and have fewer (tax-paying) children.

The obvious solution? We should have fought the Iraq war with senior-soldiers. Social security checks could have been conditional on enlistment.

Regarding the taxes, check this site on the IRS web site to know if the moving expenses are tax deductible:

http://www.irs.gov/individuals/article/0,,id=13212 5,00.html

The IRS has no problems with taxing income even if it came from violating a game company's terms of use. After all as pointed out in another reply, they'll tax illegal income. Basically, if you've ever filled out a 1040 (the US's standard income tax form), you'll see a spot labeled "Other income" or box 21. You put every scrap of income that doesn't fit there. Win $250 million in a lottery? Have a hobby that generates income (eg, selling WoW gold on Ebay)? Run a crack house? It all goes there. In theory, anyway. In practice, nobody admits that they earned $150,000 from selling smack on the streets while the lottery money gets taxed long before you get to touch it or report it as income.

"Actually, the whole statement is a mess. $9 billion divided by 20 million people is $450 per person - or, 2.25% of a $20,000 annual income. Last I checked, federal taxes were a lot more than 2.25%. 20%-25% would be a more realistic figure. I think they meant to say 2 million Americans - of course, that wouldn't have made as big an impact."

Are you totally unaware of how the tax system works in the US? It's bracketed according to income levels. Also, those are net incomes, not gross incomes -- so subtract the standard deduction of $5000 for a single person, more for a head of household, plus deductions for dependents. Throw in deductions for lots of other things, and you'll find the average person with a gross income of $20,000 pays far less than 20% in tax.

I happen to think this is perfectly fine, but I just wanted to point out that a quick search online could've helped you figure out that the figure given is pretty accurate.

The IRS is limited in what it can reveal about your tax information. See here for more information. The republican party is under no such restrictions.

Barter doesn't evade taxes, it's covered under the IRS barter section, here: http://www.irs.gov/taxtopics/tc420.html 2 out of 3 sentences correct, not bad. And oh, if you play WoW, check this out: http://www.boingboing.net/2006/01/06/irs_to_tax_yo ur_worl.html, IRS to tax your swords, armor and other magical items.

For the record, $40,000 ain't poor.

The ONLY three reasons to have a "professional" do your taxes are (1) you're getting a sizable refund and want a RAL, (2) You're of below-average ability when it comes to numbers, and need someone else to do them, (3) you're a homeowner, a business owner, or make enough to hit the A.M.T.

For all the rest of us, H&R block is a scam. If you passed high school, you can pay your taxes. If you have kids or go to school, there are a small handful of tax credits you care about --> most non-homeowners with kids will ONLY get a tax refund if they file for the EITC, and it's one form that's easy to file.

And, just in case you get stuck or don't know what you're doing, the IRS and all fifty states have toll-free tax assistance lines. You can even ask "are there any credits or deductions I could take?" and they may run down the list for you.

IRS line: 1-800-829-1040 for individuals.
NYS line: 1-800-225-5829 for individuals.

Oh, and it's easy to pay 500% for a RAL. All you need is a refund of less than $10 -- and it's all too easy to wind up with that. In fact, if you did your W-4 and kin right, that SHOULD be what you get.

I usually get my refund back in less than 2 weeks, this year I got it in less than 5 days, which is the fastest I've ever seen it come back.

E-file batches are processed on Thursday. If your e-file is accepted in the Thursday batch you should get your direct deposit by the next Friday. There's a table in this publication.

If you're spending $200 on $50 software (or free, if your AGI is less than 50k) then I don't want fiscal advice from you!

With the help of large banking institutions like BankOne, mom and pop accounting businesses can offer RALs and other financial products as an added service to their tax prep customers. In the wrong hands this can become part of the shady underbelly of the tax world and ranks up there with your local check cashing institution, rent-to-own store, and pawn shop (sometimes all at the same address).

Many of these programs are targeted at people who live paycheck-to-paycheck and don't have the education or experience to discern a good deal from a really bad one.

As nerds, geeks, and know-it-alls, I think we can help the situation by offering assistance to those in need. Help someone in need set up a bank account, do their own 1040-EZ, and understand that a properly file refund can usually be direct deposited in less than a month. The IRS and others sponsor programs to help connect smart people like you to those who need help doing their taxes.

See IRC tax topic 420 - Bartering Income
http://www.irs.gov/taxtopics/tc420.html

They have tons of compliance officers on this, since many business do in fact do a majority of their business by barter.

you are obviously not an expert...

When you make more money and are bumped into a higher tax bracket, you only pay the higher tax rate on the difference between your income and the top level lower tax rate.

Check out the IRS's own site for that info:
http://www.irs.gov/formspubs/article/0,,id=150856, 00.html

I've been waiting for this FOREVER. Another alternative for Linux is Moneydance, a java app that apparently spoofs Windows quicken online banking on Macs (or Linux)..

It would be nice for someone to do a mini-review or comparison of the different FOSS or FOSS-friendly financial packages, because frankly, I'm ready to leave Intuit.

Oh, and speaking of which--y'all know that you can file your taxes for free, right? Or at least 70% of Americans can. Down from 100% last year, but still something.

W

Sorry, but *that's* backwards. Take a look at http://www.irs.gov/pub/irs-soi/03in05tr.xls , line 123. It shows that, for 2003, the top 5% of wage earners (those earning $130,080 or more) paid 54% of all income taxes and had an average tax rate of 20.74%.

When I say rich, I mean rich, not top earners. These are the people who already have money and yes, they do pay less money in taxes. Also, if you look at top earners (not the rich), taxation peakes between 120 and 150k, then goes down a bit. Basically, rich people pay proportionally less. Remember: the top 1% of wealthy people pay 50% of all taxes, but own 80% of all property.

Sorry, but *that's* backwards. Take a look at http://www.irs.gov/pub/irs-soi/03in05tr.xls , line 123. It shows that, for 2003, the top 5% of wage earners (those earning $130,080 or more) paid 54% of all income taxes and had an average tax rate of 20.74%. The top 50% paid 96.5% of income taxes, meaning that the bottom 50% kicked in 3.5%.

Now, this is only income tax (other taxes like FICA are not progressive) but I'm hard pressed to see how "rich" people are taxed less in any respect (and I put that in quotes because you'd be amazed who the government considers rich!) The "rich" are taxed equally or more, both in terms of absolute dollars and in terms of percentage, on *everything*. The fact that there are now tax breaks on dividends doesn't negate this. If you'd like to prove me wrong, simply find me any tax that someone making $30K a year has to pay and someone making $100K a year doesn't.

I'm well aware that many people get money from means other than wages, but it still doesn't change the result that the "rich" pay more taxes. That's the whole point behind a progressive taxation system. You may want to argue that the "rich" should pick up more of the burden than they are -- and you can strike up a reasonable debate there -- but you cannot truthfully claim that the rich pay less taxes than the poor.

While it is true that a donation of appreciated property allows you to pass built-in gains to someone else, you no longer have any control over the income from selling the appreciated property. If I donate $10,000 in stock, that I bought for $1,000, to a nonprofit, I get a $10,000 deduction and the $9,000 of built-in gain is not taxable to the charity if it sells the stock. However, I lose $10,000 of value. The most I can hope to save in taxes is $4,000 offset income tax + $1,350 in avoided capital gains tax. You'll notice that it still doesn't offset the $10,000 of value I gave up.

This IRS publication gives a decent example of how contributions of appreciated property work.

Again, using charitable donations to reduce your taxes will *not* give you a higher net income, because you will never get a tax benefit greater than the market value of the donation. BUT, if you are a giving person, it's really nice not to have to pay taxes on the money you give away.

The IRS has http://www.irs.gov/taxtopics/tc409.html rules for capital gains, as well as http://www.irs.gov/taxtopics/tc404.html dividends.

Dividends are taxed as ordinary income. Capital gains are (now) taxed at a maximum (federal) rate of 28% for short term gains. Long term gains at 15%. Of course you have to pay state taxes on these things too, and some localities have personal property tax, where you have to pay an additional tax for just owning stock.

The IRS has http://www.irs.gov/taxtopics/tc409.html rules for capital gains, as well as http://www.irs.gov/taxtopics/tc404.html dividends.

Dividends are taxed as ordinary income. Capital gains are (now) taxed at a maximum (federal) rate of 28% for short term gains. Long term gains at 15%. Of course you have to pay state taxes on these things too, and some localities have personal property tax, where you have to pay an additional tax for just owning stock.

I believe that Capital Gains Tax is higher than Income Tax (at least from personal experience). I'd be willing to believe "Good Faith" based on that

Capital gains tax rates are higher than income tax.

And you're higher than a kite!

From the IRS (http://www.irs.gov/taxtopics/tc409.html):
"You may have to report capital gains and losses on Form 1040, Schedule D (PDF) . If you have a net capital gain, that gain may be taxed at a lower tax rate. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. The highest tax rate on a net capital gain is generally 15% (or 5%, if it would otherwise be taxed at 15% or less). There are 3 exceptions:

The taxable part of a gain from qualified small business stock is taxed at a maximum 28% rate.
Net capital gain from selling collectibles such as coins or art is taxed at a maximum 28% rate.
The part of any net capital gain from selling Section 1250 real property that is due to recapture of straight-line depreciation is taxed at a maximum 25% rate. "

The important part is that your long term capital gains are pegged based on your tax bracket. If you would normally pay more than 15% in taxes, your capital gains are 15%. If you would pay less, you pay only 5%. Short term capital gains are just figured as normal income and taxed as below.

And here are the tax schedules (http://www.irs.gov/formspubs/article/0,,id=133517 ,00.html):
"If taxable income is over-- But not over-- The tax is:
$0 $7,300 10% of the amount over $0
$7,300 $29,700 $730 plus 15% of the amount over 7,300
$29,700 $71,950 $4,090.00 plus 25% of the amount over 29,700
$71,950 $150,150 $14,652.50 plus 28% of the amount over 71,950
$150,150 $326,450 $36,548.50 plus 33% of the amount over 150,150
$326,450 no limit $94,727.50 plus 35% of the amount over 326,450 "

So, if you earn $1 billion from the sale of stock held over one year, with only $1 dollar in actual income, you pay ($1 billion * 5%) $50 million (since the tax rate on $1 is 10%, which is less than 15%). If, however, you earned a $1 million salary, then cashed out $1 billion in stock, you'd pay ($1 billion * 15% = $150 million) + ($94,727.50 + (1 million - 326,450)*35% = $330,470) = $150,330,470.

By paying themselves $1 per year, they saved themselves over $100 million. Yeah, it was completely altruistic. Altruistic like a fox!

Capital gains tax rates are higher than income tax.

And you're higher than a kite!

From the IRS (http://www.irs.gov/taxtopics/tc409.html):
"You may have to report capital gains and losses on Form 1040, Schedule D (PDF) . If you have a net capital gain, that gain may be taxed at a lower tax rate. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. The highest tax rate on a net capital gain is generally 15% (or 5%, if it would otherwise be taxed at 15% or less). There are 3 exceptions:

The taxable part of a gain from qualified small business stock is taxed at a maximum 28% rate.
Net capital gain from selling collectibles such as coins or art is taxed at a maximum 28% rate.
The part of any net capital gain from selling Section 1250 real property that is due to recapture of straight-line depreciation is taxed at a maximum 25% rate. "

The important part is that your long term capital gains are pegged based on your tax bracket. If you would normally pay more than 15% in taxes, your capital gains are 15%. If you would pay less, you pay only 5%. Short term capital gains are just figured as normal income and taxed as below.

And here are the tax schedules (http://www.irs.gov/formspubs/article/0,,id=133517 ,00.html):
"If taxable income is over-- But not over-- The tax is:
$0 $7,300 10% of the amount over $0
$7,300 $29,700 $730 plus 15% of the amount over 7,300
$29,700 $71,950 $4,090.00 plus 25% of the amount over 29,700
$71,950 $150,150 $14,652.50 plus 28% of the amount over 71,950
$150,150 $326,450 $36,548.50 plus 33% of the amount over 150,150
$326,450 no limit $94,727.50 plus 35% of the amount over 326,450 "

So, if you earn $1 billion from the sale of stock held over one year, with only $1 dollar in actual income, you pay ($1 billion * 5%) $50 million (since the tax rate on $1 is 10%, which is less than 15%). If, however, you earned a $1 million salary, then cashed out $1 billion in stock, you'd pay ($1 billion * 15% = $150 million) + ($94,727.50 + (1 million - 326,450)*35% = $330,470) = $150,330,470.

By paying themselves $1 per year, they saved themselves over $100 million. Yeah, it was completely altruistic. Altruistic like a fox!

The Internet, like the road system, should be open to everyone for the same rates.
I guess you didn't get the memo

IRS says it's got to be an activity carried on for the purpose of making a profit, not just a hobby that happens to generate income (even if it's a net profit)

Actually, the IRS allows you to deduct hobby expenses to the extent that they offset income. IRS Publication 529 says:

You can generally deduct hobby expenses, but only up to the amount of hobby income. A hobby is not a business because it is not carried on to make a profit. See Not-for-Profit Activities in chapter 1 of Publication 535.

Do not go to H&R Block on this one. Go talk to an accountant -- it'll cost you $300 which you can then turn around and deduct. You probably are a sole proprietorship -- but if you have doubts, talk to an accountant. Do you live in the US? If not, take the money and run -- from your own government.

A couple years ago, as a small business owner, I ordered from the IRS a free (as in beer) CD. I think it was entitled "Small Business Essentials" or something like that. The IRS provided Acrobat Approval on that CD so that it was possible to save the fill-in tax forms. It also allowed saving an incomplete form and continuing later, something not easily compatible with various "print to PDF" methods. If they still offer something similar, it can probably be ordered here.

I realize that might not meet all your requirements, but it did work for me at the time, and it has worked for me every year since.

OK. I looked it up. See S.1932 `SEC. 159. (Does anybody know how to link to THOMAS?) It looks like there will be a two-per-household limit. So they don't really seem to have the poorest of the poor in mind with this law anyway. Of course, the upper class (and technophiles) will probably already have their TV sets converted to digital anyway by the time 2009 comes around. Besides, it's probably not worth a silver-spooners time to file for a measly $40.

No matter what they decide, I have a real problem with the government telling the press what formats they can and cannot use. I know they've done it for ... well forever, but I still don't like it. If they are allowed to tell TV stations they can't use analog, what's to keep them from telling newspapers that they can't use paper anymore? I know it sounds far fetched now, but what about in 50 years? I understand that it's ostensibly for the public good, but not using paper would also be for the public good.

Another thing that bothers me is that this will probably end up being a windfall for the DAC manufacturers. Now that they know people will get a $40 voucher, they can put an extra $40 in their pricing. As long as there is plenty of competition, this may not happen, but it's certainly easy to see that situation. I'd like to say the invisible hand of free market would reduce prices, but with the government forcing acceptance of the technology, all invisible hand theories are out the window.

Based on your authority alone I'm supposed to deny the facts as presented by the IRS in an objective manner?

I provided an actual numerical example with a link to the appropriate tax table.

You provided a link to a collection of spreadsheets. You made a statement to the effect that the goverment would send our $12K 'taxpayer' a 'bill in Febuary'.

Our 'taxpayer' owes no taxes, and the goverment will not ever 'send him a bill'. The goverment doesn't 'send out bills' for taxes.

The fact is that I understanded the amount of the refund that our $12K 'taxpayer' would receive, because I left out the child tax credit to keep things simple and I used the 2004 tax rates. The Bush tax cuts give this 'taxpayer' and even better break in 2005.

The bottom line is that I gave accurate numbers, and you didn't give a single number, just your incorrect opinion.

Here is what you can do if you would like to learn a little about the U.S. tax system:

Let's assume that you are single and have two children who are related to you and live with you all year. Assume you have an income earned by working for an employer of $12,000 during. You don't own a home, you have no other income, deductions, or adjustments to income. You followed my advice and told your payroll to not withhold taxes during 2005.

Your filing status is called 'head of household' because you have children, but don't have a spouse living in your home.

Now I know that math is hard, but follow me here:

Tet an IRS form 1040 ( http://www.irs.gov/pub/irs-pdf/f1040a.pdf ). Check the 'head of household' filing status in block 4. Put the number '2' into box 6d, for your two dependants.

Write the figure $12000 into box 7, 'wages, salaries, and tips'.

Write the figure $12000 into box 21, 'adjusted gross income'

On line 27, write the figure $7300. This is the standard deduction for HOH filers.

Here is the part that may be difficult for you.

Subtract $7300 from $12000, and put the result of $4700 into block 27. This is your taxable income.

Now look up in your tax tables ( http://www.savewealth.com/taxes/rates/headofhouseh old/ ) the tax you must pay and place the number zero next to the word tax in box 28.

If you want you can stop now, since you owe no taxes you are not required to file.

But wait, there's more!!!

Consult IRS Publication 596 ( http://www.irs.gov/pub/irs-pdf/p596.pdf )to calculate your Earned Income Tax Credit. You will wind up looking at page 48 where you will find that you are entitled to an Earned Income Tax Credit of $4,400.

Recall that tax rate is calculated as (tax paid) / (income);

So your tax rate is -4400 / 12000 = -36.67%

I will leave to the students the question of how large this 'taxpayers' child tax credit will be.

Those are the firm, accurate numbers.

Now go write a letter to President Bush and thank him.

Based on your authority alone I'm supposed to deny the facts as presented by the IRS in an objective manner?

I provided an actual numerical example with a link to the appropriate tax table.

You provided a link to a collection of spreadsheets. You made a statement to the effect that the goverment would send our $12K 'taxpayer' a 'bill in Febuary'.

Our 'taxpayer' owes no taxes, and the goverment will not ever 'send him a bill'. The goverment doesn't 'send out bills' for taxes.

The fact is that I understanded the amount of the refund that our $12K 'taxpayer' would receive, because I left out the child tax credit to keep things simple and I used the 2004 tax rates. The Bush tax cuts give this 'taxpayer' and even better break in 2005.

The bottom line is that I gave accurate numbers, and you didn't give a single number, just your incorrect opinion.

Here is what you can do if you would like to learn a little about the U.S. tax system:

Let's assume that you are single and have two children who are related to you and live with you all year. Assume you have an income earned by working for an employer of $12,000 during. You don't own a home, you have no other income, deductions, or adjustments to income. You followed my advice and told your payroll to not withhold taxes during 2005.

Your filing status is called 'head of household' because you have children, but don't have a spouse living in your home.

Now I know that math is hard, but follow me here:

Tet an IRS form 1040 ( http://www.irs.gov/pub/irs-pdf/f1040a.pdf ). Check the 'head of household' filing status in block 4. Put the number '2' into box 6d, for your two dependants.

Write the figure $12000 into box 7, 'wages, salaries, and tips'.

Write the figure $12000 into box 21, 'adjusted gross income'

On line 27, write the figure $7300. This is the standard deduction for HOH filers.

Here is the part that may be difficult for you.

Subtract $7300 from $12000, and put the result of $4700 into block 27. This is your taxable income.

Now look up in your tax tables ( http://www.savewealth.com/taxes/rates/headofhouseh old/ ) the tax you must pay and place the number zero next to the word tax in box 28.

If you want you can stop now, since you owe no taxes you are not required to file.

But wait, there's more!!!

Consult IRS Publication 596 ( http://www.irs.gov/pub/irs-pdf/p596.pdf )to calculate your Earned Income Tax Credit. You will wind up looking at page 48 where you will find that you are entitled to an Earned Income Tax Credit of $4,400.

Recall that tax rate is calculated as (tax paid) / (income);

So your tax rate is -4400 / 12000 = -36.67%

I will leave to the students the question of how large this 'taxpayers' child tax credit will be.

Those are the firm, accurate numbers.

Now go write a letter to President Bush and thank him.

You posted a broken link. See this:

Individual Income and Tax Data 2003

and look into column C, under 30,000.

Near the bottom see: Total Tax Liability $40.4M
Just above see: Excess earned income credit (refundable): $34.2M

See footnotes 2c and 2d: ... includes both the refundable and non-refundable portions. The non-refundable portion could reduce income tax and certain related taxes to zero; credit amounts in excess of tax, or amounts when there was no tax liability at all, were refundable.

Do realize that there is no EIC refund unless tax liability has been reduced to zero.

So, 68.5M returns filed in 2003 with AGI less than $30K
They paid, assuming 100%, $40.4M, on average a tax rate of $590 per return.
However, out of that 68.5M returns filed, there were 18.5M that got EIC refunds amounting to $34.2M

Go ahead, revise your position.

I'm not making this up:
1. http://www.irs.gov/taxstats/indtaxstats/article/0, ,id=96981,00.html
2. Download All Returns: Adjusted Gross Income, Exemptions, Deductions, and Tax Items for 2003.
3. Table 1.1 Table 1.1--2003, Individual Income Tax Returns, Selected Income and Tax Items, by Size and Accumulated Size of Adjusted Gross Income--Continued
4. Look at "Income Tax After Credits" and what you'll discover is people paying taxes with AGI's at or below 20,000. Lots of them too!

Again, your opinion does not stand up to simple tests. Please examine the data taken from real people submitting real tax returns and reevaluate your position.

Since a person with two kids and a $12,000/year income pays no income tax, all he has to do is ask his payroll clerk to adjust his W-4 so that no income tax is withheld. So no 'float' for the goverment.

And when the employee does this, he gets a bill for the taxes owed to the gov't right around February that's due April 15 of the next year. Your post suggests you don't have any experience in the matter whatsoever.

I'm not making this up:
1. http://www.irs.gov/taxstats/indtaxstats/article/0, ,id=96981,00.html
2. Download All Returns: Adjusted Gross Income, Exemptions, Deductions, and Tax Items for 2003.
3. Table 1.1 Table 1.1--2003, Individual Income Tax Returns, Selected Income and Tax Items, by Size and Accumulated Size of Adjusted Gross Income--Continued
4. Look at "Income Tax After Credits" and what you'll discover is people paying taxes with AGI's at or below 20,000. Lots of them too!

Again, your opinion does not stand up to simple tests. Please examine the data taken from real people submitting real tax returns and reevaluate your position.

Missing my point entirely:

Let's look at the facts:
2.1 percent of all individuals reporting income taxes in 2003 are at or below $20,000. (about 1.8 million people)
http://www.irs.gov/taxstats/indtaxstats/article/0, ,id=96981,00.html

So, you are suggesting there's some kind of whooshing sound with all 1.8 million people rushing to become welfare millionaire's as a result of the tax credit?

In the US income tax is also "voluntary." That just means the burden of assessing and filing falls on you, but you're still forced to pay.

The guy turned around and sued the company to be recognized as an employee because he wanted the benifits.

Yes. He was arguing that he was a Common Law Employee, that is, he didn't control when and where he worked, which tools he used to perform his work, etc.

For a clearer description of this, please read the Internal Revenue Service publication Independent Contractors vs. Employees

Or you could fill out the 1040 and other forms using Adobe Acrobat based forms that the IRS provides. 1040 - http://www.irs.gov/pub/irs-pdf/f1040.pdf

It's not too tricky at all, you were just not clear in your definition of "haves." Leftists generally refer to two classes, rich and poor, in their worldview.

For example, we always hear the battlecry of the left: "The rich don't pay their fair share!" This is in direct contradiction to the facts unless you consider "rich" to mean "not poor."

Fact: Above average wage-earners pay 96% of all income tax. The top 25% pays 84% of all income tax. The top 1% pays more than one third of all income tax at 34%. (Source: IRS 2003 Figures: http://www.irs.gov/pub/irs-soi/03in05tr.xls)

Returning to the main topic, yes I am guilty of lumping you in with my perception of the average leftist, and for that I withdraw my comments, except to add that it would have been helpful if you had been less ambiguous in your definitions. I will also add that the current facts do not support your hypothesis of middle-class to lower-class monetary flux. The government takes the most money from the top earners, so the tax system would have to change dramatically to support your theory. Either that or the definition of middle class would have to change.

According to Wikipedia, the (middle) middle class are those who make up to $75,000 but aren't considered "working poor," so for the sake of this argument we'll call the middle class those who make above the median income but below $75,000. Extrapolating from the IRS data, people in this class range pay approximately 14% of all income tax. So, there is really no tax on the middle class at all, at least not in the US.

The reason leftist redistribution of wealth never works is because you cannot demotivate those who are capable of driving societal advancement. Why should one work 80 hours per week to run a corporation, sacrifice family and personal life, and generally be a slave to the shareholders, unless there is a significant reward attached? Leftists love to present the notion that it's easy to be rich. Let me tell you, running the affairs of a large corporation is not easy by any strech of the imagination. It is hard to manage a corporation that employs 100,000 people, and the risks are huge. The CEO holds the livelihoods of all of those people and their families in their hands, and to a less direct extent, the financial wellbeing of society at large. That requires a lot of talent and generates a lot of stress.

But the money still has to be earned, which means you pay for everyone else's health care expenses in higher-priced goods. So, in essence, the US has nationalized health care anyway - you're just being taxed by the corporations and not the Government. Well, perhaps. Tax write-offs also have to be financed by someone, which means some of your income tax is actually going to pay your corporation for their contribution for your benefits.

Inflated prices, inflated taxes and reduced wages - all so that you can claim the company is paying the lion's share of the insurance. Someone's getting ripped off, royally.

And no law is retroactive (or rather: no law should be retroactive)

Tax laws are frequently retroactive. And so far, the supreme court has upheld such ex post facto tax laws.

For example, tax rates being made retoractive in 2003:
http://www.irs.gov/newsroom/article/0,,id=109817,0 0.html

Here's a juicy one from 1993, retroactively applying a law back TWENTY YEARS into the past:
http://thomas.loc.gov/cgi-bin/query/z?r103:E06MY3- 263:

Plenty of other abuses are out there if you do some research.

If you can see no other reason to support the Fair Tax, abolition of the IRS should be plenty of reason enough.

Red Flayer, you are so misinformeed. So too are the mods who modded you up.
Lets recap eh?

Top 5% of wage earners pay 54.36% in taxes.
Top 10% of wage earners pay 65.84% in taxes.
Top 50% of wage earners pay 96.54% in taxes.

And for proof, check out the excel file from the IRS website. This data is collected from 1985 through 2003. Do the math. http://www.irs.gov/pub/irs-soi/03in05tr.xls

Honestly, the economic ignorance that is abound just pisses me off. Its bad enough science and engineering are plummeting in America. But if we slack off in Econ 101, we are in some serious shit!

And you probably dont make use of your IRA deduction.

I make low six figures and this was my problem, until I spoke with a professional.

Let's see what advice the professional gave...

Step one, start contributing to your ira, if you dont have an IRA you are giving money away. Between you and your wife (oh wait this is slash dot) you can take 1,500 direcly off the bottom line of your taxes.

Fair enough, although you have only deferred your taxes until you are, presumably, at a lower tax bracket having retired. On the other hand, you are trusting the government to not change the rules on when you can withdraw that money and at what rate. Also, the tax savings is that you deposit the money pre-tax, not that you get to take the full amount off your total tax bill. As a result, your tax savings is more like $375 which is nice but not that big of a deal when your total taxes are about $30,000.

Next, go buy a house, find the largest house you can afford, then get the next one up. Put it on an interest only loan. IIRC, then you can write your entire house payment off (if your house is big and nice enough). This one is good for about 15k off the bottom line of your tax bill. (if you are in the low 6 figure like i am, more and you can write more off)

With this strategy, as soon as you lose your job as a result of an economic slow-down and can't make the payments, you lose your home. Since you had an interest-only loan you have no line of credit in your equity that you might have floated on. Finally, the interest only reduces your taxable income and does not come off the bottom line of your overall tax bill.

Finally, start a small business(make and sell crafts at the local craft fair). Take a room in your new nice big house, and call it your office. Keep track of every penny you spend on your business, and take a loss for the first three years. This should put you down to ZERO taxes (even a credit for next year!!!) for the next few years.

A small business operated out of your house is the number one way to get yourself audited. It's not impossible to do but you had better be able to prove all your expenses and that you didn't use the space for anything else at all for the entire year.

By the way, losing money in a bad business doesn't get you any further ahead than losing money to the taxman. And, once again, the losses merely reduce your taxable income and do not come off the bottom line of what you owe. Losing $100 in a business only takes perhaps $25 off your tax bill. Unless you lose the money on something you wanted anyway (which is a good way to get penalized when you are audited) you are better off not having the business.

You are waisting your money if you make more than about 80k and pay more than 5-10% in taxes. (hint, you should only be paying property taxes, any more than that, and your house isn't big enough)

I don't think you are right on much of any of this. If your tax professional is telling you that the things you have listed in your post are coming off the bottom line of you tax bill and are not merely adjustments to your taxable income, I suggest you read the relevant tax code yourself at http://www.irs.gov/ and then get a new tax advisor because, ultimately, you are the one who is going to be responsible.

Go back and closely study tax revenues from 2000, 2001, 2002, 2003, 2004 - I believe you are mistaken there

Individual Income tax revenues from the IRS data,

1999 - $1,002,185,765
2000 - $1,137,077,702 Increase
2001 - $1,178,209,880 Increase
2002 - $1,037,733,908 Decrease
2003 - $987,208,878 Decrease
2004 - $990,248,760 Increase

you are simply parroting back the pseudo-stuff you've read in the media

No, what I am saying is mainstream economic science. I suggest you read what Federal Reserve Chairman Bernanke said about the Great Depression, or here where he says about the Fed's behavior leading to the Depression "You're right, we did it. We're very sorry." This is someone who holds a Ph.D. in economics from MIT, was a visiting professor of economics at MIT, an associate professor of economics at Stanford, and a professor and department chair of economics at Princeton, a Fed Governor, and now the Fed Chairman.

Yeah, I love that GnuCash game, but that end boss sure is a bitch. ;)