For the most part these days, I'm an independent contractor.
What does that mean?
It means that people pay me per job and the government doesn't collect taxes on my income until later. At that point I have to pay them all that I owe them.
What else does that mean?
Tax time seems a little extra scary at this point
So, what? Now you're all against taxes?
No. I'm not against taxes. I don't think highest necessities such as food [actually food's the only thing I can think of right now] should be taxed, but I am okay with most other things being taxed because I want everyone to have libraries, fire departments, someone to call when you hear something outside and it's sort of scary, and a safety net** so you don't have to beg on the streets.
Where are you going with this?
Oh right. So as I've been thinking about the income I've made so far this year and will hopefully make from now until April, I've been trying to think about what I need to do so I can pay the correct amount in April. How do I know what the correct amount to save is? So, I've begun reading the IRS's webpage. It's not confusing and yet it is. You think something is so very clear, but then all of a sudden you start second guessing yourself... the way you did in middle school with the teacher whom you knew ALWAYS put trick questions on the quiz. So, I re-pulled out Cap & Compass's "life after school. explained. the definitive reference guide". I truly believe that this book should be mandatory reading before anyone is allowed to graduate or leave school early.
Now, I'd be a liar if I claimed it made all my tax questions simple, but it does fill in a lot of things you manage to forget, not pay attention to, or just never learn.
Example 1:
HMO vs. PPO vs. POS
Uhh... POS stands for Point of Service... not Piece of Shit.
How do you decide which health insurance to go with? That is, after your parents stop covering for you.
Over the summer I had to look for my own health insurance and nothing made me want health care for everyone more than that. That, and why wouldn't we want everyone to have health care? Lindsay, Cameron, and I had a discussion about such and I might change my mind tomorrow, but doesn't it make more sense than welfare? I mean, isn't getting our limbs sewn back on and our pneumonia taken care of slightly more important than that cell phone? I mean... kind of?
Example 2.
W-4 forms.
We all put a 0 in the form so the government takes more money and we get a refund, but why does Uncle Sam get to make interest on our money? Shouldn't we put that money in an account and make at least a .02% interest and then pay it back. Okay, okay, I know why we do it, but when it comes down to the numbers, you put down a 0 in bottom half of the W-4 form and the government collects the interest?
Of course, if the possibility of having to pay extra later is intimidating [and it is] than maybe putting down a 0 is a best idea and consider the interest a donation. If you're like me and your taxes are so tiny that your interest would be approximately 4 cents... than maybe you're better off. Unless of course, that 4 cents is an exaggeration and either way, every penny counts.
I suppose the point of this entry is to say: try and be informed. And, once you're informed, try to help others. It wasn't until my senior year of college [just in time] that I was taught to check my tax bracket before accepting a promotion. I may make less money due to tax increases. Yes, maybe that's not a big concern for me right now, but it's something to be attentive to.
I was originally going to compile some of my findings on independent contractor taxes and deductions, but the post has gotten a bit long. Moral of the story... read up. Find out what you're getting yourself into when you graduate. The book I have is tiny. I could read (and comprehend) it in its entirety in a couple of hours. And, while the IRS page may look really boring, it's worth looking up who you are.
You could save some money on taxes and put that money into a charity because if we don't want the government to become a charity, then we should support those who are. Actually, scratch that. That was just a jab. We should support charities and we should support ourselves. Remember, "WE the people..."
Footnotes*** on a blog. Really?
*except for health insurance
**I've been thinking about food stamps lately as I make a very small amount of money, but have come to the conclusion that they should only be a safety net for when otherwise you'd eat nothing... not otherwise you wouldn't eat your daily servings of fruit and veggies because then you couldn't buy something else that you don't absolutely, positively need. After all, the government... "the man" you're taking from... is really just us.
***Left foot, right foot
Feet, feet, feet
How many, many feet you meet.
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