I'm Surprised More People Don't Cheat with Tax Programs

Back in the olden days, when all you had was a form, pencil, eraser and your calculator, it was way too much hassle to “work the numbers”. You figured it out, put the numbers where they belonged, calculated the numbers to make sure you got your addition and subtraction correct and you went with it.

I doubt anyone tried adding more or less to anything, to see if they could get more money by doing so. Unless they were really, really good at math.

As I was working through our income taxes a couple of weekends ago, I thought of the commercials on television and how they make it seem romantic to do taxes.  Abracadabra!  These tax programs make sure you get the most money you have coming to you! But what if you end up owing? All the magic sort of drains away.

I personally felt kind of nervous watching that amount go up and down as I worked through the questions.

If your taxes are straight forward – if you have only a W2 and that’s it, there’s not much you can do to work the numbers. But if you are filing filing Schedule C (and if you’re a blogger earning income, you should be claiming all your income and paying taxes on it), it’s very easy to enter different amounts to see how your refund/payment will be affected.

I’m just surprised that more people don’t cheat while using these tax programs.

How did you file your taxes this year?  Online with e-file, did you buy a program or did you send in the forms?

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7 comments to I’m Surprised More People Don’t Cheat with Tax Programs

  • We still have a CPA helping us because our international situation is confusing and we are worried we’ll mess something up. But, I have to say, I’m always afraid of messing up the taxes and getting audited. It sounds like a real hassle. I doubt I’d cheat just based on the stress of it all.

    [Reply]

  • I used the free online (or downloadable) tax program “TaxAct”.

    It free, and there are no income limitations as there are with many free Tax programs. It’s a good program, but since I do a lot of stock trading, it’s a pain to manually put all the stock gains and losses into the program. Next year, I’m seriously considering TurboTax.

    I don’t fully monetize my blog yet, so I don’t have enough earnings from my site yet to claim…

    I have to admit, I really like the alerts at the end of the Tax software packages! They caught a few typos I’ve had in the past!!! I always compare my current years tax, with my previous years tax return…

    🙂

    [Reply]

    Mrs. Accountability Reply:

    I remember saying that I hadn’t had “enough” earnings from my blog at one point last year. In fact, I remember exactly where I said it, at Mrs. Micah’s blog to this post: Taxes for Bloggers. That was before I read June Walker’s book Self-employed Tax Solutions in which she states you must claim any earned income.

    For 2010, according to the IRS, if you were single, under the age of 65 and your gross earnings were at least $9350, you must file an income tax return. If you were self-employed and your only income was from your blog, you must file and pay self-employment taxes if you made more than $400.

    If you, like most bloggers, have a regular day job where you earn income, or if you file joint married and your spouse earns income, you must claim any amount you make from blogging – minus expenses, of course. It might be that you actually spent more money maintaining your blog, so it would actually benefit you to claim the money you made so you can claim the expenses!

    The $600 rule that I was confused about is the guide for companies giving out 1099-MISC forms. If you make less than $600 from a company they do not have to issue a 1099-MISC, but YOU are still required to report the money you made. I say it’s better to be safe than sorry. If you only made $100 on blogging income, you’ll pay an additional $33 in taxes (1/3 as an estimate). I’d rather pay $33 then to worry about getting in trouble for it one day down the road.

    [Reply]

  • Red

    I filed online, but I wanted to say that, back in the pre-online taxes age, the IRS was SO relaxed in their rules and regulations. For instance, you didn’t need to list your children’s social security numbers to claim them as dependents! I have an aunt and uncle who claimed all of their PETS as children! Ha! Just wanted to share that. 🙂

    [Reply]

  • Paper and pencil here. I find that doing it this way (+ the math) actually makes it quite transparent exactly how taxes are calculated. As a result I have become much better at selling investments at a loss. Also, I agree with the comment above that entering stock transactions is a real pain (and sometimes impossible) when it comes to tax programs. This is the main reason I don’t use a program now.

    [Reply]

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