Nobody likes taxes, except the government (and Democrats). So writing a post lamenting the tax structure is preaching to the biggest (non-Democrat) choir ever. But somehow, this particular pulpit is irresistible, especially at this time of year.
My business (i.e., me, myself, and I) is organized as a sole proprietorship, the easiest structure I could find. I purposely didn’t do anything fancy like an LLC (Limited Liability Company) because of the extra record-keeping required (basically, I would have to act like a corporation, pay myself a salary, issue stock, and hold annual shareholder meetings and such, with me, myself, and I in attendance. Puhlease. I can be as delusional as the next person, but that’s just painful.)
Yet, even my simple, cash-based business requires the services of a CPA to do my taxes. Believe me, I tried to do them myself. I always did my taxes myself before (yes, a real 1040, not just the EZ). But being in business — even the simplest of businesses — makes that all but impossible.
Every year, I compile my tax information as soon as I get the necessary forms. All of my clients who paid me over $600 are required to send me a 1099-MISC form by January 31, documenting how much they paid me. Surprisingly, not all of them do, but I dutifully report all of my income anyway. I fill out a “tax organizer” my CPA provides to send this information, with a list of my business expenses, to him. He then figures out how these numbers translate into taxes owed. He also figures in my husband’s half of our joint-filing equation (an easier, W-2 deal).
For this service, we pay our accountant $325, which gets added as one of my business expenses on next-year’s taxes in a perpetual “robbing Peter to pay Paul” loop.
Now, I love our accountant, he does an excellent job, and I don’t begrudge him his fee at all. What I do begrudge is the fact that I need him at all. C’mon — I’m not GM here. I’m not even a doctor, lawyer, or Indian chief. I’m a hack, earning a modest salary. Why does it take a CPA to do my taxes? Why are allowable business expenses so hard to calculate? Why is the tax structure so darn complicated? And why aren’t I, as an individual, paying the same tax rate as every other individual, regardless of what I do for a living?
Why shouldn’t someone making $5,000 a year pay the same tax percentage as someone making $50 million? One rate for everyone. Sure sounds fair and democratic (in the best sense of the word 😉 ).
Maybe my taxes would always be more difficult because I’m self-employed. Knowing what is and isn’t an eligible business expense, and how to depreciate things like furniture and equipment, might always be beyond the average sole proprietor.
But it would make me happy to know that whatever my bottom line turns out to be, I’ll be paying out the same percentage of it as everybody else. Well, maybe not happy. Satisfied? No, not really satisfied. How about decidely less annoyed? Yes, I’m willing to commit to that wholeheartedly: I will be decidedly less annoyed at doing taxes and paying taxes if we are all on equal footing and paying the same rate.
How’s that for preaching to the choir?
Question: “I understand that Congress is considering
a so-called ‘flat’ tax system. How would this work?”
Answer: “If Congress were to pass a ‘flat’ tax, you’d
simply pay a fixed percentage of your income, and
you wouldn’t have to fill out any complicated forms,
and there would be no loopholes for politically connected
groups, and normal people would actually understand
the tax laws, and giant talking broccoli stalks would
come around and mow your lawn for free, because
Congress is NOT going to pass a flat tax,
you pathetic fool.”
~ Dave Barry
Writing by Ear 