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Let me tell you how it will be
There's one for you nineteen for me
'Cause I'm the taxman
Yeah I'm the taxman

This is very true. However, it was finally realized by our esteemed lawmakers and the limits are going up starting this year.

401K: Only sponsored by an employer. Thus the original problem

I don't see how this is a problem. After all, people are going to be employed in between bouts of unemployment. ;-) Throwing money like mad into a 401(k) while you are employed will make retirement that much more comfortable.

If your employer doesn't offer this, maybe you should find one that does. Remember that your compensation is salary + benefits not just salary. By failing to provide a decent tax-advantaged benefit, that company is going to (rightfully) lose out on savvy employees who insist on benefits like this.

But it doesn't surprise me. Some companies are slimy like that. Heck, it happened a couple of years ago to my wife.
Fortunately for us, the IRS has pretty stringent rules on who is and is not a contractor. If it's called into question, there's 20 Guidelines which the IRS uses to determine if a person is self-employed or an employee.

If you think you're an employee, but your employer dodges their own taxes by handing you a 1099, you can petition the IRS to look into it. Check out Form SS-8.

Not if its employment compensation and you are an employee,
in which case you go fill out one of these
and then watch the irs do a little shafting on your employer.

However if you read this little gem:
Holding the employer liable for the tax that was not withheld does not relieve you from the liability for your share of social security and Medicare taxes.

IT seems that the IRS will probably ignore the company since there is no money to squeez out of them, and the employees will get the shaft...

Thanks, Uncle Sam...

~Sean

However if you read this little gem:
Holding the employer liable for the tax that was not withheld does not relieve you from the liability for your share of social security and Medicare taxes.

IT seems that the IRS will probably ignore the company since there is no money to squeez out of them, and the employees will get the shaft...

Thanks, Uncle Sam...

~Sean

This is a 1040. US citizens fill one out every year and send it in to the Internal Revenue Service (our friendly government tax people) on April 15. Check here for the complete list of fun-to-fill-out IRS forms. US law says the IRS doesn't actually have to have your 1040 in their grubby little hands on April 15, just that when they DO get it, it had better be in an envelope postmarked April 15. This rule leads to all kinds of crazy stuff happening on April 15, with postal people dressing up in monkey suits and standing by specially designated drop points until midnight....

This is a 1040. US citizens fill one out every year and send it in to the Internal Revenue Service (our friendly government tax people) on April 15. Check here for the complete list of fun-to-fill-out IRS forms. US law says the IRS doesn't actually have to have your 1040 in their grubby little hands on April 15, just that when they DO get it, it had better be in an envelope postmarked April 15. This rule leads to all kinds of crazy stuff happening on April 15, with postal people dressing up in monkey suits and standing by specially designated drop points until midnight....

Use the addresses in http://www.irs.gov/where_file/index.html. Or call 1-800-829-0433.
And, I guess, the usual 'info' and 'abuse' or 'fraud' at irs dot gov addresses should help as well...

Incorporating has it's benefits, but also it's drawbacks (paperwork!! scheduled taxes throughtout the year, etc).

You should seriously look into an LLC. Depending on the state that you are in, it may give you exact/similar liability protection similar to what incorporating would give you.

And LLC income/expenses are easy to do - just add your income from your LLC to your taxes, and deduct the expenses. Turbotax handles it all real nice, but it's not hard to do if you keep your receipts and documentation.

You could try contacting your state bar association and see if they have any pamphlets/information about corporations/llc's. Also, contact your secretary of state. Some have Small Business Development Centers that will give you a starting pack to find out what you'd need to do to from a corp or LLC, and what VENDORS LICENSES you will need to obtain. Some will even give you free counseling on your options and such.

Also, there's http://www.sbaonline.sba.gov/ and irs.gov

Good luck. I just went through this a few months ago forming my own company.

LLC stands for limited liability company, not corporation. This seems to be a pretty common symantic error. A corporation is limited in liability by definition. You are correct on the tax ramifications however. Lots of good LLC taxation info can be found here.

Here is the IRS's "IRS e-file For Tax Professionals, Software Developers and Transmitters" page.
and here is the "IRS e-file Technical Publications" page which has the e-file file layout spec.

Here is the IRS's "IRS e-file For Tax Professionals, Software Developers and Transmitters" page.
and here is the "IRS e-file Technical Publications" page which has the e-file file layout spec.

Still, he claims to make $1300/day. (His claim for lost wages for 1 day). I wonder if he reports this income to the IRS?

You should notify the IRS and say that, if Bernie isn't reporting at least $260,000/year (assuming he works 200 days), then he's hiding income. They have a handy form to report it, or a toll-free hotline .

• The House of Representatives
  
• Thomas at the Library of Congress
  
• The US Postal Service
  
• The Securities and Exchange Commission
  
• The Federal Trade Commission
  
• (FWIW: i.e. not much) The Internal Revenue Service This is one of the poorer examples, but at least you can download forms in PDF.
  
• The White House
  
• The US Dept of Justice Not as useful as the others...
  

As far as receipts go, you don't need one if your donation is worth less than $200. However, I am sure plenty of organizations would still be willing to give you a receipt, either way. How do you handle it? You find someone interested in your donation (a 501(c)3) and then you simply ASK for your receipt upon exchange. :)

As always, check with your tax lawyer, accountant, CPA, or whatever.. also, the IRS actually has a very good website with all the information you need, in fairly plain english, a database to look up organizations, and a fairly good telephone information hotline to call for specific questions.

In addition to this, my nonprofit (as listed in the URL in the headers..) is in need of one or two good systems for our offices, and also looking for laptop or PDA systems, as our work takes us around the region. We are located in Philadelphia, PA. We will accept parts, and non-standard equipment, we also work in conjunction with a number of local computer recycling organizations. CARP:Creative Arts Resource Project

Having said all that, I do bill the clients for the time they expect me to spend learning a new technology, and that's reasonable.

I assume you're not an independent contractor, but rather an employee for a company that contracts you as a consultant. If you were trying to pose as an independent contractor, and the IRS found out that you had received education from your customer (much less billed them for it!!!), then they would declare the customer to be your employer and you to be their employee. I'm sorry that I don't have time to find you the relevant IRS document, but it's somewhere at their web site:

http://www.irs.gov

You can donate cars and get a receipt for the blue-book value of the car, even if it doesn't run.

If you're a Linux consultant and donate hours to a non-profit and get a receipt for the time you spent there, and the time is in line with the other customers you have, why can't you deduct that time?

However, I agree with you 100%:

Go talk to your tax lawyer/accountant.

...(No, make that a lousy to great resource, depending on the quality of the person in charge of the program) is the Internal Revenue Service. Call the toll-free help number or your local office and get hold of the Taxpayer Education office or whoever is responsible for the Small Business Tax Workshops in your area. Find out when and where and go.

At their best, these workshops can be a gold mine and bring in guest speakers to cover topics far beyond just taxes. At their worst, though, they can be just a short meeting where some publications get handed out and that's about it. Either way, it won't be a waste of your time.

Of course, the easiest way to find one is to go here, click on your state, and dig a link or two deeper to get the schedule for workshops in your area. Even if there's not a current schedule, there will be a contact name and phone number you can call.

A good page of general-purpose links for anyone starting a small business is here

A good place to start finding out about taxes, complete with a freebie from the Small Business Administration, is here.

...(No, make that a lousy to great resource, depending on the quality of the person in charge of the program) is the Internal Revenue Service. Call the toll-free help number or your local office and get hold of the Taxpayer Education office or whoever is responsible for the Small Business Tax Workshops in your area. Find out when and where and go.

At their best, these workshops can be a gold mine and bring in guest speakers to cover topics far beyond just taxes. At their worst, though, they can be just a short meeting where some publications get handed out and that's about it. Either way, it won't be a waste of your time.

Of course, the easiest way to find one is to go here, click on your state, and dig a link or two deeper to get the schedule for workshops in your area. Even if there's not a current schedule, there will be a contact name and phone number you can call.

A good page of general-purpose links for anyone starting a small business is here

A good place to start finding out about taxes, complete with a freebie from the Small Business Administration, is here.

...(No, make that a lousy to great resource, depending on the quality of the person in charge of the program) is the Internal Revenue Service. Call the toll-free help number or your local office and get hold of the Taxpayer Education office or whoever is responsible for the Small Business Tax Workshops in your area. Find out when and where and go.

At their best, these workshops can be a gold mine and bring in guest speakers to cover topics far beyond just taxes. At their worst, though, they can be just a short meeting where some publications get handed out and that's about it. Either way, it won't be a waste of your time.

Of course, the easiest way to find one is to go here, click on your state, and dig a link or two deeper to get the schedule for workshops in your area. Even if there's not a current schedule, there will be a contact name and phone number you can call.

A good page of general-purpose links for anyone starting a small business is here

A good place to start finding out about taxes, complete with a freebie from the Small Business Administration, is here.

Hmmm. No employee of the IRS can speak on behalf of the IRS without approval. So let's just say I'm some guy with some experience in this stuff. I'm not saying where I work or that anything in this post is official, OK?

Basically, tax prep software that is e-file enabled will do your forms, wrap them up in one big package, and send them to an intermediary. NOT the IRS! The intermediary is subject to all sorts of requirements regarding security and other things. They have to be open to constant scrutiny from the IRS. It would be silly to allow 50 million people to directly update a database at the IRS - there would be too many people who sent in garbage of one type or another.

The intermediary puts together big packages of files that have been checked for problems and transmits those to the IRS.

So why is there no open source efile software? The biggest reason I can think of is security. The IRS approves software for efiling based on a number of factors including their comfort level that the software works nearly perfectly and won't result in anyone trying to send them a bunch of garbage. Open source projects willing to go through a code audit from the IRS aren't exactly common. Open source projects that are able to turn out software to do a complex task essentially error free and be usable by my mother aren't terribly common either. And both those things are necessary to make it to that list the original question referenced.

Of course, there are exceptions. There are some "industrial-strength" tax prep packages that aren't particulary easy to use and are targeted to tax prep offices, CPAs, etc. There are some names on that approved software list that most people wouldn't recognize because they are not tageted to average consumer. But the need to have truly locked-down software and keep it completely current with the law remains and would sink most open source attempts.

Another reason is because those intermediaries use the software to get paid. TaxWise, for example, is the package used by the IRS, itself, when you walk into the office and ask to have your return prepared. To get TaxWise to work, you have to activate it with a code from the company that is keyed to a special number issued to you by the IRS, the EFIN or Electronic Filer Identification Number. TaxWise then acts as the intermediary. Do you think they want to accept efiled returns from anyone who didn't spend the money to buy their software?

The same deal goes for TurboTax. They will act as your intermediary for a fee. Or, if you make *very* little money, they'll act as your intermediary for free. Either way, though, you will have had to have bought the software from them in the first place.

Tax prep software, *especially* efile software, is something that will be done by commercial software houses. It just doesn't fit with open source.

For heavy-duty and far more technical information about this topic (I've seriously over-simplified some things in this post), try the IRS efile site for software developers. Yes, there is such a thing and it's available to the public. If you really want to know about file specifications, scripted testing of software, and other deeply techy kinds of things, you might want to pick up a copy of Publication 1346, Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns. You can get in dead tree format or entirely online.

All this info can be gotten by digging just a few links below here.

I was really disappointed to find that the IRS didn't have something similar. I was also just very disappointed in the IRS website. It doesn't really jump out at you that it's a government site. At first glance it looks like a magazine or something, called "The Digital Daily", though upon closer inspection of the banner, you can see that it does belong to the IRS.

He should be very careful about this - legally he has to at least file a US tax return (assuming he's a US citizen), though he may not actually owe any taxes (there are some credits, see the IRS publications for details). His chances of getting caught are probably pretty low, but it's entirely possible that not filing at all for a couple of years will get him flagged for an audit next time he does file after he returns home.

I'll stay out of the politics of whether it's right or not for the government to tax you when you're working internationally beyond one comment: for a US citizen, even if you're out of the country there are advantages and services that are available to you (at embassies, etc.) because of your citizenship. Taxes pay for those even if you don't use them, the same way taxes pay for your local fire department's services even if you don't use them.

The IRS FAQs for people working internationally are at http://www.irs.gov/tax_edu/faq/faq13.html.

-- fencepost

Hi!

In addition to traditional fee-for-service health insurance, you may want to look into a Medical Savings Account. There are substantial advantages to an MSA for people who are self-employed--chief among them that you are paying for your health coverage with pre-tax dollars, but also you are able to keep a significant portion of what you pay.

Here's how it works: a Medical Savings Account consists of two parts:

• A high-deductible insurance policy (typical deductible is $3,500-5,000 for a family)
• An investment account

You pay a relatively low premium for the insurance policy, and you pay a monthly "contribution" into your investment account. Major expenses are paid (after the deductible) by the insurance policy--but the minor expenses, routine medical care, etc. are paid from the investment account.

As I mentioned above, the advantages for somebody who is self-employed (or who works for a small company) are substantial:

• Both premium payments and contributions to the investment account are paid with pre-tax dollars.
• Any amount left in your investment account is yours to keep. The amount in your investment account can grow as large as you wish--and interest or investment income on that money is tax-deferred.
• Once you reach age 65, you can withdraw funds from your investment account, just like an IRA.
• You are not limited to an insuror's list of medical conditions--you can use your investment account funds to pay for any medical expense (including, for instance, eyeglasses for your kids).

The down side of having an MSA is that you can find yourself being taken advantage of by doctors--because they are used to overbilling and then just taking what the insurance company pays. Since you don't have Blue Cross/Blue Shield to say, "the reasonable and customary amount is $48, so that's all we're paying" you can occasionally get popped for a $250 visit to the doctor where the family behind you with traditional insurance pays a fraction of that. Most of the time you can negotiate--but every now and again you'll stumble across a jerk who gets greedy.

To find out more, check out Golden Rule Insurance Company or the Internal Revenue Service publication 969.

• Make your interface consistent in terms of navigation. American Memory from the Library of Congress is a really neat idea. It's fairly well organized, but is really graphics heavy and the navigation changes from page to page, easily confusing you as to where you are and how to get where you want to go.
• In contrast, the Library of Congress Online has a lot of content and the interface stays mostly the same (as far as searching goes). However, when viewing it I feel as if I need to be trained as a librarian in order to find anything. Avoid using terminology and definitions that you might find understandable because you're working there, but that the average Jane or Joe user wouldn't necessarily be able to comprehend.
• Categorization. The IRS' website, as has been noted, is rather difficult to navigate. Again, one needs to know the exact governmental terminology to find stuff. Your categorization method might need to be some other format than one used internally. For example, you might find the ordering
  Residential Documents -> Tax Forms -> Family -> Income Level -> 30,000
  to be self-explanatory, but it might not be the best ordering so that the average person can find information.
  Try to keep category depth to at most three levels if you can manage it.
• Programming-wise, it may be good to store the design and content in separate places. Have each subpage simply contain content and just include the design either at run or compile time. When you've got as much information and as many documents as a govt. site typically has, this is IDEAL for when you want to change the design (which means the file containing the design). This can significantly add to the load however, so make sure you're ready for it.
• Make sure you have the bandwidth and machine horsepower to handle the site. One thing I've noticed with almost any .gov site is that they are extremely slow. This is as much part of the user experience as the layout and organization.

The goal of your site (I'm assuming) is to provide information to users. Just try to realize that too much information at once is overwhelming and makes people go away. The only place where you should have lots and lots of text is in the actual document or page the user is looking for.

That's all I can think of right now. I hope this helps.

Two words: Adobe Acrobat. A couple people mentioned the IRS site. One of the reasons it's usable is because forms are readable online, can be filled in online, and then can be printed with predictable results. It only costs $100, and, once you've learned your way around, can be used to very effectively standardize not only presentation of information to the public, but internal paperwork as well. Having an archive of .PDF files ready to print when someone needs x or y form has proven invaluable to my wife's office streamlining efforts.

My pet peeves match everyone else's: pages that don't print well; dead-end pages with no links back to command central; long drop-down fold-out menus that fill your screen because the common selection (like, "United States") at the end of the alphabetized list; and unnecessary message boxes that appear when you hold the mouse over a link and obscure the text underneath. An example of a site making this last mistake is the American Physical Society.

Actually though, scientific facilities and publishers aren't bad sites to visit. They look nice but aren't too commercial, and they do want to get real content across.

Good Government Websites:

• The IRS
• The US Postal Service

What makes a good government website for me is lot's of practical advice on dealing with the agency. Many agencies just post scanned regulations and leave it at that. That's fine for the lawyers, but most of us need good english translations, with as many examples as possible.

The front page should always contain:

• A full text search box, ideally with a link to a full featured search page.
• The top level heirarchical listing of categories
• A link to a (frequently updated) FAQ, with links to other agencies where relevant. Example: Going to the Dept. of Commerce, I could reasonably expect to find encryption export regulations, but that responsibility was recently transferred to the Bureau of Export Administration.
• A short summary of recent news happenings/hot topics at the agency
• A short, clear statement of the agencies' areas of responsibility

In short, give people multiple ways to find the info they want, and try to anticipate their questions in the FAQ

Also, actively solicit feedback, becuase you'll be surprised at the types of things your users want to do that you never anticipated

Ack, gotta run, please forgive the lack of proofreading

-Loopy

Every time I go to the IRS web site (www.irs.gov), they always have these cheesy "articles" about how people are using IRS services to make their life SO EASY... quite frankly, it's rather annoying.

However, that said, I rarely have a problem finding information on their site within, say, 5 clicks. So that's a plus on the usability front. But if you're looking for design, don't "steal" from the IRS. :-)

How are they planning to do that? I for one wouldn't mind paying 50% taxes on a 0 dollar purchase...

I am not making this up.
I'm not that clever.

Guess where the surplus came from? Thats right! Capital gains taxation.

Want proof? Look at the IRS stats on individual income. Check out href=http://ftp.fedworld.gov/pub/ irs -soi/98inprel.exe. Look at just the individual income figures (note, this does not include corporate income, excise or severance taxes, or any other source of Federal tax revenue). Capital gains accounts for all of 8% of all individual income, and an even lower proportion of total taxes. We could eliminate the capital-gains tax and still have a surplus.

I think we should. Getting rid of the capital gains tax would get rid of a lot of accountants and tax bureaucrats. It would eliminate any incentive for people to keep their money locked up in poorly-performing investments just to avoid having to pay the taxes required to get into better ones. And it would make mutual-fund investing an even better deal for the little guy (none of this crap about having to pay capital-gains taxes because the fund sold some stuff at a profit in order to buy some other stuff).

Getting rid of the capital gains tax would eliminate a bunch of obstacles and disincentives in the economy. It would probably help; it doesn't yield enough tax revenue to really hurt.
--

Get all the figures you could possibly want from the IRS here.

This is a difficult point. However it is probably more related to Civil Asset Forfeiture law, rather than the 5th amendment. Cato has some great articles on asset forfeiture and how US citizens have basically given up their property rights. I would argue that Kevin's files are his own intellectual property , in whatever form, and that he has a right to have them returned to him. Keeping the files, because they might have something "BAD" in them, is the assumption of guilt. With the exception of the IRS all federal agencies must assume you are innoncent until proven guilty. By the government's logic they can seize all of my property and hold it indefinitely until I tell them everything they want to know. I thought that was called "extortion".
Stuart Eichert

• Certain corporations which perform specific activities for the government, as specified by Congress, may also be classified as tax-exempt under 501(c)(3).

You're making this up as you go along, right?

The examples I gave were all 501(c)(3)s. As I said, it's not by my definition, each of these organizations applied and were granted this status by the IRS. As you say, see Publication 557 for details.

While the functions of 501(c)(3) organizations may not seem to be "charitable" in function, they are generally referred to as "a 501(c)(3) charity". Donations can generally be made to these organizations on a tax-exempt basis. As I said, charity is broadly defined. Both Mitre and CTC refer to themselves as 501(c)(3) charities. As this IRS page states:

• The organizations described in 501(c)(3) are commonly referred to under the general heading of "charitable organizations."

• The exempt purposes set forth in 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and the prevention of cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening the burdens of government; lessening of neighborhood tensions; elimination of prejudice and discrimination; defense of human and civil rights secured by law; and combating community deterioration and juvenile delinquency.

Note also that as long as the corporation involves itself in it's original chartered function, it can keep it's tax exempt status:

• The articles of organization must limit the organization's purposes to one or more of the exempt purposes set forth in 501(c)(3) and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that are not in furtherance of one or more of those purposes. This requirement may be met if the purposes stated in the articles of organization are limited in some way by reference to 501(c)(3). In addition, assets of an organization must be permanently dedicated to an exempt purpose.

You can contribute, tax-deductibly to Mitre, CTC or the FSF because of their "charitable" status.

The real issue is that you accused RMS of perpetrating a fraud by invalidly constituting a 501(c)(3) corporation. You went on to claim that such corporations were not allowed to compete with for-profit corporations. Both claims are bunk and any examination of the relevant tax code sections demonstrates this pretty clearly.

-Jordan Henderson

I find it terribly interesting that people shout back and forth about "I'm an employee!", "I'm an independent contractor!" or some other such thing without the foggiest notion of what they *actually* are. In fact, the definition of employee and of independent contractor are matters of law. No contract that you can sign between yourself and someone who pays you money can change that. If the contract says you're an independent, if both parties agree you're an independent, if nearly everyone accepts that you're an independent BUT your individual circumstances meet the definition of an employee, then you ARE an employee. Period. You can sign contracts and make agreements to the contrary all day long and it doesn't matter one whit.

Different agencies at the federal, state, and local level work under different statutes. And yes, they are a mess, generally using vague language that may well result in someone being an employee to the Internal Revenue Service but an independent contractor to the Department of Labor. Or vice-versa. Most agencies, though, wind up falling back on the 20 common law factors used by the IRS or a variation thereof. (That situation is in flux right now, but the 20 common law factors still rule for tax purposes, even if the new kinder and gentler IRS is so gun-shy that they're not really enforcing them.) Take a look at them on IRS Form SS-8, Determination of Employee Work Status For Purposes of Federal Employment Taxes and Income Tax.

Work through that form and you might be surprised. I think a lot of "independent contractors" will find that they are actually employees. And if they're employees, aren't they entitled to the benefits a company extends to employees?

Yes I have begun work on a tax project called LeTax. It has a homepage of course. At this point is is mostly bluster and posturing. However, I recommend anyone interested in this project start by reading IRS publication 17 available at also in PDF form from http://www.irs.gov/

Tax code is a maze of twisty passages, all alike. Developing this software is some of the most unfun programming I have ever done. Others are correct in pointing out that this is a huge task. However, I especially like the way that tax software code can reverse-engineer the legal system. Please read the homepage if you want to hear my rants. In a more perfect world, the IRS would be spending its resources developing this kind of software; instead they post the Tax Tables as GIFs. Feh.

I am continuing to work on this project and would greatly appreciate additional developer support. Please contact me if you are interested at coordinator@letax.org

In any case, do not play on using LeTax for the '99 tax year!

Jeff

As I've been politically active, I asked NIC.Gov if I can register my name under .Gov also. I wonder how large a staff they'll need to monitor when political clubs drop below the registration requirements and get de-registered.

But I am surprised that AlGore didn't already get GOP.Gov registered to the GOvernment Printing office...