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Thread: Born Free... Taxed to Death

  1. #1
    God/dess Bella21's Avatar
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    Default Born Free... Taxed to Death

    ARGH I hate taxes! Okay, does anyone see any holes in this plan? I cut up all my credit cards and pay cash for EVERYTHING (clothes, food, school supplies, gas, etc.) and as for my car payment (about $9,000) left to go, I just put any cash left over into getting that off my back (okay and some in savings). I do some modeling and I'll get 1099's from those that I'll pay taxes on. Sound like anything you guys do?

    P.S: Sorry if it's kind of all over the place, daddy makes strong beer [cheers]
    If you think school is hard, try being stupid.

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    God/dess montythegeek's Avatar
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    Default Re: Born Free... Taxed to Death

    Welcome to the real world
    Invisible to the IRS also means invisible when it comes to buying a car down the road, or a house at some point.
    You can't get a credit card which means no blockbuster card.
    And you still can be tracked by the things you buy if they want to. Gas, electricity, phone and how did you pay for those books and tuition? Bank account to save the money in-paper trail. Put it in the stock market-paper trail. Put it in a mattress and bugs get it. If you get hurt and can't work for a long time, no disability.
    But you can buy insurance for that, but that adds to the trail.
    And what if you want to get married and your spouse can't hide? The question of getting caught up in a spouses old tax issues is unpleasant. Especially if you spent it and got things that can be seen even if there is no paper trail of your getting them. To be truly invisible is harder than paying the taxes. And how does the place you work at account for all the money going in and out? The gamble is hard when they hold the cards and make the house rules, Unless you want to live like the unabomber, suck it up and pay for modern society.

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    God/dess Bella21's Avatar
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    Default Re: Born Free... Taxed to Death

    No no no, I dont' mean invisible to the IRS. I mean this in the way to pay the absolute minimum I can. I think I can get away with more this last year living at home "with my parents help". Also, I heard something about paying taxes every three months? How much does that work?
    If you think school is hard, try being stupid.

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    God/dess Zofia's Avatar
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    Default Re: Born Free... Taxed to Death

    No no no, I dont' mean invisible to the IRS. I mean this in the way to pay the absolute minimum I can.
    No one is required to pay more than the minimum. A good tax accountant can help you minimize your taxes. There is lots of good advice on this board about what is and what is not deductible. In general, my best advice is keep good records. If the IRS ever asks quesions or wants to do an audit, records to substantiate your deduction are the best way to deal.

    Also, I heard something about paying taxes every three months? How much does that work?
    If you are not being witheld and you make enough to owe taxes, including Social Security and Self Employment, you need to file quarterly estimates and make payments. Like everyone, you still need to file an annual return and claim a refund, make a payment or apply your refund to the next quarterly estimate. Remember, being self employed is a business and you are taxed like a business.

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    Veteran Member winter2003's Avatar
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    Default Re: Born Free... Taxed to Death

    monty hate to break it to ya, you CAN get a blockbuster w/o a credit card! i did. my SO and i have 0, nadda, zilch credit cards..it is possible to get by in this world w/o a credit card(and don't yell back at me i am referring JUST to blockbuster!!!) here's my 2 little pennies...i danced very infrequently and had nothing in my name( no bank, no cards, no bills--NOTHING) i am so suprised at how many people seem to be such "good" abiders to the tax laws!! personally i worked for the government made 15,000 A YEAR---THEN OWED!!!! needless to say, i think more people should consider 'creative' measures to obtain what they want! i say no more. please don't come yelling at me about taxes, pleeeaaasse..i worked for the bastards and until you see first hand how badly we're getting the 'rake-over' please do not yell at me for wanting a more 'creative' approach...as for this patriot act...go to(sorry, do not know how to make direct link) Michaelmoore.com he's the writer who goes around the country speaking on several issues of government and govn't officials and the like, there's also a link to Buzzflash.com(news) so give it a read...

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    God/dess montythegeek's Avatar
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    Default Re: Born Free... Taxed to Death

    I would never yell at anyone, I just can't justify to myself, in good conscience, giving advice which COULD get you in trouble. I would only state the rules as they are written and let people take any risk they want. No judgements.
    To me tax advice is like a highway speed limit. Limit plus 1 mph is real low risk, +5 probably still safe but getting more expensive if you get caught, +10 riskier still, +25 real risk and very expensive if you get caught.
    Plus, like speed limit, the faster you go the inherent risk of the activity starts to add risk and other downsides like higher insurance in addition to the ticket...if you get caught.

    Bella, if you want to look at the estimated tax stuff there is a link to it in the Find a good accountant thread.

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    Banned Melonie's Avatar
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    Default Re: Born Free... Taxed to Death

    The very important point in all of this is that tax collection agencies have now entered the "information age" in a very big way. For starters, the IRS and some 40 states which have established co-operative enforcement agreements now share financial information about businesses and individuals via a common database. Through new laws (most notably the Patriot Act) and pre-existing laws, this database now has automatic reporting mechanisms which keep track of every bank transaction a person makes i.e. savings, checking, CD's, loans. This database also has automatic reporting mechanisms which keep track of every credit card transaction, every brokerage transaction (stocks, bonds, retirement investments). Additionally, co-operating states also make available every motor vehicle title transfer and registration, every property deed transfer and property tax transaction. Also, virtually every large public utility company i.e. electricity, telephone, cable must make customer transaction information available to the IRS and/or to co-operating states. On top of this, many large retailers also must maintain a database of customer information in regard to large purchased items, which is also available to the IRS. And as a coup de grace, the Patriot Act now requires that banks, the US Post Office and all retail outlets for money order purchases submit a report to the IRS for any cash transactions totalling $1000 or more. The Patriot Act and anti-terrorist money laundering treaty also require that US Citizens report any assets in excess of $10,000 residing outside of the USA (with automatic reporting provisions by banks in several foreign countries). Oops, I also forgot to mention college tuition payments are also automatically reported!

    My point here is that, say 20 years ago before our world became interconnected, the major means of identifying underreported/unreported income was via W2's, 1099's and other required reporting of income by "employers". If there was cash income which did not have an accompanying W2 or 1099, the only persons aware of the cash income were the person that paid it and the person who received it. Accordingly, 20 years ago it was very difficult for the IRS to prove that a person received a certain amount of income but did not pay the necessary amount of taxes on that income since they had very limited access to the "spending" side of the equation.

    However, today the "spending" side of the equation is now available to the IRS for essentially the first time. The IRS can see how much money you are saving in bank accounts and CD's, investing in stocks, bonds and retirement funds, and spending - spending through checks and credit cards, spending on public utilities, spending on a car or a home, spending on large consumer items (like a new TV, Stereo, Refrigerator), and even how much you are spending on money orders and of course your spending on college tuition. In addition, the IRS has cost of living statistics for every area of the country which allows them to estimate the typical spending requirements for food, gas and other everyday things. This body of financial information allows the IRS computers to add up the amount of money that the IRS has received reports about, i.e. savings, investments, car or home payments, utility payments, and other big ticket item purchases, money order purchases etc. plus then add on X dollars that a typical person in your city would be expected to spend on food, gas etc. and arrive at a total figure for the amount of money passing through your hands.

    The IRS computers then compare the total amount of money that has passed through your hands on the spending side to the amount of money you reported as income. If there is a significant gap, i.e. if your reported income is $30,000 but your reported savings, investments and spending totals $50,000, the IRS now has a new means to prove that you underreported your income.

    Even if someone deliberately chose to not report/underreport their income today based on the knowledge that no official report of their earnings will be made to the IRS by an "employer", they cannot escape the fact that automatic reporting of their savings, investments, and spending is now going to be made to the IRS in any case. This creates a situation where virtually the only way to avoid eventual detection becomes stuffing dollar bills in coffee cans and never spending it more than $1000 at a time, never buying or registering a car, never buying a house or registering a deed, never making investments or contributing to a retirement account, never going to college etc. - basically living like a welfare recipient for your entire life.

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    Veteran Member winter2003's Avatar
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    Default Re: Born Free... Taxed to Death

    i understand...i get a little adgitated on subject...can ya tell?!?

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    God/dess Bella21's Avatar
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    Default Re: Born Free... Taxed to Death

    Sooo.... Don't I get a tax refund on my college fees? So when I bought that stereo a bit ago and circuit city took my name and address... that's how the government knows I bought it? Also, I've gotten money orders before and they didn't take my name or anything? It was a few months ago but I'm pretty sure they didn't. I live with my parents and aside from my car, I dont' have bills... what spot does that put me in? Winter, I get agitated too! ps: I didn't have a credit card when I got my blockbuster card either
    If you think school is hard, try being stupid.

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    Banned Melonie's Avatar
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    Default Re: Born Free... Taxed to Death

    Bella, some states do offer a an educational tax credit, so depending on where you live you may be able to get some money cut from your taxes in exchange for the fact that you have paid college tuition costs.

    Yes, the information that Circuit City collected CAN be used to prove the fact that you bought an expensive stereo. However, as far as I know there is no automatic reporting requirement, so the IRS would need a reason to ask retailers about you (i.e you're the subject of an IRS audit).

    Now buying money orders DOES have an automatic reporting requirement, where any outlet that sells money orders including the US Post Office, Banks and major retailers must take your name address etc. and file a cash transaction report with the IRS if you buy over $1000 in money orders.

    As far as your own "reported income versus spending" equation, you've got tuition, car payments, car insurance, Circuit City on the spending side. Because you still live with your parents, you really don't need to worry.

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    God/dess Bella21's Avatar
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    Default Re: Born Free... Taxed to Death

    Good My dad pays my insurance, and my gas card is in his name. So, if I get a bunch of $900 money orders, they can't trace those?
    If you think school is hard, try being stupid.

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    Default Re: Born Free... Taxed to Death

    THANK GOD for Melanie!


  13. #13
    Banned Melonie's Avatar
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    Default Re: Born Free... Taxed to Death

    Good My dad pays my insurance, and my gas card is in his name. So, if I get a bunch of $900 money orders, they can't trace those?
    No, as long as you don't buy more than $900 total in money orders from the same place on the same day. But if you buy six $200 money orders at the same time, aaoooggahh! I've had days when I've returned from a road trip where I first had to hit the US Post Office to buy $950 worth, then hit my bank to buy another $900 worth, then hit WalMart for yet another $700 worth in order to get caught up on my bill payments without setting off anybody's alarm.

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    God/dess Bella21's Avatar
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    Default Re: Born Free... Taxed to Death

    Hm, I see. Thanks Melonie for keeping up with my quesions!!! [love]
    If you think school is hard, try being stupid.

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