On most social issues I fall squarely on the Left, but doing my tax return this year made me see that maybe on finance the Right has a good point.
I finally got all my 1099s from Amazon, B&N, and Smashwords (at least I think so) so I could do my 2014 tax return. When I added it all up I made almost $4,000 last year. Hooray! But as I entered the numbers into my tax program my projected return kept dropping and dropping until I was in the red. Meaning I owe the Federal government money for the first time ever.
Doing the math, essentially they want 25% of my book earnings. A quarter of every dollar! That's just crazy to me, especially for someone in my situation. They might as well be stealing candy from a baby.
And so that's the price of even a moderately success year of business. It'll probably only be worse this year. Makes me wish I were a smarter accountant so I could find a way to get around all that. Maybe set myself up one of those Cayman Islands offshore accounts like the big boys.
Anyway, a flat tax is starting to sound like a good idea now.
7 comments:
The thing is, what democrats want to do is increase CAPITAL GAINS. See, the reason you are getting taxed is because income tax is 25%. That's too high. Meanwhile Harold Hamm and Bill Ackman are getting taxed at 15% on their capital gains. Raise taxes on capital gains and reduce taxes on income for those making less than $250,000 is what Obama and Pelosi and everyone else that's democrat WANTS to do.
Taxes can be crazy Pat since 25% sounds high.
Book sales have always put a dent in my taxes. What it really comes down to is that if you sell a book for .99 cents you don't even really get the .35 cents...you get more like .10 cents when the government takes their cut. If you keep making good money, you'll have to look into filing quarterly. Also one thing that helped me is deducting paid advertising. Plus certain advertising like Bookbub will increase sales.
You're an accountant, so you probably know all the tricks, but even with the little amount I make -- nowhere near $4,000!-- I don't find my book sales adding to my taxes. One thing is maybe don't claim it as self-employment income, if you can avoid doing so. Self-employment income requires that you pay the self-employment tax, which is a huge hit.
Or, since you're moving around, why not establish a residence in Florida or Texas so you don't have to pay state income taxes?
Well, I'm just impressed with the $4000.
Recent poll said 68% of Americans believe the wealthy need to pay more in taxes in general. Why does a family making $50K pay more in taxes than a household making over $300K?
Anyhoo, aren't you able to deduct your business expenses to help offset what you owe? That should add up. Might not put you back in the black, but made the red less...redder?
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