I’ve spent a good part of the last three days poring through receipts preparing to turn the entire mess over to a tax accountant.
The only part of the tax code I understand is the part that says I can deduct losses from my investments. I’m not sure exactly how it works, but if I can get a few tax dollars returning to my pocket, it will make the losses a little bit easier to bear.
There was a time when doing my taxes was fairly simple and I always did it myself. That all changed when I left IBM and became self-employed. It’s rather ironic that when I began to make less money, I had to hire someone to help me determine how much of my money would be sucked in by the various government entities.
At the end of my first year of self-employment, I decided to try to do the tax returns myself. It didn’t take long before I was totally confused. Fortunately, a good friend (Glenn Keen) who I’d met through the Cursillo (Christian Renewal) Movement happened to be an accountant. I went to him for help.
My original plan was to let Glenn do the first year. Then, after studying what he’d done, I’d be able to return to doing it myself.
Wrong! I’ve now been studying his work for over fifteen years and I still can’t make heads or tails out of it. I guess that’s why he’s called a ‘professional’!
I also have to admit that my financial life has become much more complicated in those fifteen years. In 1998 I began collecting my half of my pension from IBM. As a self-employed/retired person, I had to pay double social security on my contracting income and a lesser amount on my pension. I also had to make quarterly estimated tax payments since none were withheld from my contractor checks.
If you’ve read the Fair Tax Book, you’d know that there was a time when no taxes were deducted from anyone’s paycheck. That was when the taxpayer was periodically smacked in the face with the reality of how much the government was taking out of his or her pocket. Then the government started the payroll deductions and began stealing our money a little at a time.
In 1999 I remarried. My current bride had (and still has, thank God!) a full-time job. Thus, when it came to tax time, we had to include income from full-time employment, self-employed contracting checks, and a pension.
About a year later, I became the Southeastern U.S. sales representative for the Laser Golf game – a product developed in Australia that was one of the first virtual-reality computer games. It came with computer software, a sensor that was placed on the floor, and a golf club-like device that shined a light over the sensors as one took a realistic swing at a golf ball. The computer would then calculate the club speed and angle and send the ball down the fairway (or into the rough) in a simulated fashion.
It’s a wonderful game that is terribly over-priced. In three years, I managed to sell four or five of them. Had that been my only source of income, I would’ve been forced to turn to yet another source of income – welfare.
About three years ago I tried my hand at selling ads for the 400 Edition magazine. I should have learned from the golf game… I am not a salesman.
Last year Lu decided to try her hand at selling. She is now a full-fledged Mary Kay Beauty Consultant. Her sales performance has been much better than mine, but thus far, we’ve sunk all of her profits back into the business. We’re hoping that in years to come, she’ll have built up a good customer base and we’ll be able to spend some of her profits on more personal things… like food.
This past April, I began receiving Social Security payments. Needless to say, that additional income – combined with a better year of contracting work – has helped us pay off some nagging debts and raised our comfort level somewhat. However, watching our retirement nest egg shrivel up has made it perfectly clear that we’ll both need to continue working for some time to come.
In the meantime, the additional sources of income combined with the woeful losses in our investments means that, once again, I have to rely on Glenn to figure out how much of my money the government gets to keep.
That’s why I keep saying, “Bring on the FAIR tax!” If you’re not familiar with the Fair Tax, I encourage you to read the information on their web site or read one of the books that have been written about it.
I’ve contacted some members of Congress who oppose the Fair Tax. When I read their reasons for being against it, it was obvious that they have not taken the time to study the legislation.
Do yourself a favor, take the time to do what your representative may be too busy to do. Then, if your representative is one of those opposing the bill, drop him or her a line. If he or she still refuses to support it, maybe he or she needs to be dropped. The 2010 election isn’t that far off.
Now, if you’ll excuse me, I still have to run the numbers on Lu’s Mary Kay business.