I have always done my taxes myself, because for a long time, they were very simple. I had one job, or maybe two jobs, depending on the year, and a student loan interest form that I always lost the minute it was mailed to me. Doing my taxes is exciting, because I get to fill in the numbers, check off the boxes, and watch the amount of money that I’m going to get back from the government grow. One year, I did my taxes at the end of January, got my refund by the first week of February, and booked a plane ticket to New Orleans for Jazzfest with the proceeds. Another year, I put some of the money aside in savings and spent the rest on a Coach bag, convinced that I would have it for decades, telling myself that I deserved the purchase because that was money I worked for.
Nearly three-quarters of college students borrow funds to pay for school these days and, as we know, it is not always easy — or possible — to pay those loans back. Well, it turns out one thing you might be able to do to help yourself succeed is move. Specifically, move west.
According to schools.com, four of the top five states for student loan repayment are on the Pacific side of things: Utah, Wyoming, Washington, and Nevada. (The fifth is Virginia so the Atlantic gets a brief nod.) California and Colorado also place in the top 10. But stop short of Cali: San Francisco is a luxury ghost town these days. (“On average, 39 percent of condos built since 2000 have absentee owners, and for newer buildings like One Rincon Hill, that number is 50 percent or above.”) Also there’s no water.
Why is the West such fertile ground for loan repayment? Low unemployment rates, low cost-of-living, and high incomes boost Utah and Wyoming. Washington State, Wyoming, and Nevada make things easier on residents by not charging income tax. Wait, what?
FYI, there are only seven states that don’t charge income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. I can understand the small and the oil-rich not needing to profit off individuals but how on earth do huge states with significant populations of poors and olds like Texas and Florida get away with that? Texas makes up the difference via property taxes, “some of the highest in the nation.” New Jersey and New Hampshire are also expensive places to own property. And Florida … is there anything good to say about Florida?
If individuals were treated like corporations, I could set up an affiliate called “Catherine Rampell Bermuda,” have it pay my college tuition and then declare that the affiliate owns the resulting degree. I could then tell the IRS that everything I earn above the average high school grad’s wage should be recorded as income in Bermuda, since it’s all derived from a Bermuda-based asset. Until I decide to repatriate those diploma-derived earnings, I’ve built myself a tax-free IRA.
At the Washington Post, Catherine Rampell is like, Well if corporations are people, then people should be corporations! She talks to Tax Experts who list the many potential benefits we could earn by reporting our taxes as a corporate entity rather than an unfortunate old human being. No taxes on international income! Deduct sales tax! Deduct healthcare spending!
This sounds great although I don’t appreciate being made to think about taxes outside of tax time.
Meanwhile, Rebecca J. Rosen at the Atlantic retells an “extremely literal instance of corporate personhood” wherein a 1960′s IBM employee named Susan Elliott had her husband incorporate her so that she could keep working when she was pregnant. Amazing:
A little over a month ago, I wrote about how I finally went out and got a CPA after a CSR working for an automated tax software program told me “you really need a professional to do your taxes.”
Here is how my CPA experience went! I am curious if it was anything like other people’s experiences with CPAs and financial advisers.
1. I had no idea how much it was going to cost.
My CPA’s website didn’t have any rates listed, which is fine, but it took me to the end of our first in-person meeting (after a few phone conversations) to finally say “um… what do you charge, and is it by hour or by project?”
It was per hour, and since some of those hours happened without me in the room I really didn’t have any idea what my bill would be until I received it. That, of course, made me nervous because I like to plan things in advance, but it turned out fine.
I’m not the kind of person who likes to ask for help.
ICYMI, Silvio Berlusconi was convicted of tax fraud and sentenced to four years in prison last year, but thanks to a law that passed while he was in office declaring that convicted criminals over 70 do not have to go to jail — LOL, okay — he got off with some community service.
And what community will be graced with his service? Well, as the Guardian reports, today he rolled up in a limousine to his first day of work at a hospice for Alzheimer’s patients, where he will be involuntarily volunteering once a week.
Reuters reports that Credit Suisse is about to be in a world of hurt:
Credit Suisse Group AG is in talks with the U.S. Justice Department to pay as much as $1.6 billion to resolve an investigation into the bank’s role in helping Americans evade U.S. taxes, a person familiar with the matter said on Monday.
I always want to know who the person familiar with the matter is. I hope it’s someone who overheard a conversation in the men’s room.
The penalty would exceed the 895 million Swiss francs ($1.02 billion) that Credit Suisse has set aside to pay potential penalties to the United States.
They put a billion dollars aside to pay penalties. Hmph. Guess that’s smart of them.
Oh wait, did I say “world of hurt”? I guess I meant minor discomfort. Is 600 million dollars the ‘low hundred millions’? Someone is not going to be able to quit the Silicon Valley grind to pursue a career in the arts.
Photo via wikimedia commons
I have been gathering paperwork and sending things to my account for my 2013 taxes since early February, but a week or so ago I was chatting with Mike and declared I would do it myself this year. I won’t be making much money — how hard could it be? Then he reminded me that the first quarterly payment for freelancers is due at the same time as my 2013 taxes. Oh, great, okay. I opened this puppy up in a tab, left it open for a week, and then last night — April 13th — I decided now was the time. I got out a notebook and inhaled deeply. For the next four hours. Rather than write 3000 words about this experience I will fast forward to deciding at midnight last night I would do the ‘make an educated guess and throw some money at the government to cover my ass, rounded up to the nearest hundred’ method.
This piece by David Cay Johnson in Newsweek called “How to Cheat on Your Taxes” is less about cheating on your taxes, and more about why so many people get away with it.
NYU law student Alex Levy writes about shady, unregulated tax preparers in an editorial today explaining that in most states, anyone can set up a business to prepare your taxes if they wanted to.