I'm hoping this isn't me this year, but it's at least good to prepare for such a thing. Life happens, and no judgement is made on anyone with such a problem. When it comes to owing Uncle Sam, we're all in this together. So what do you do if you can't pay your income taxes? I found an article on just the matter. The first thing it says, which sounds pretty obvious is to make sure you file your return on time. The IRS charges a penalty of 5% if it's late. Don't forget that you can set up a payment plan with the IRS. You can also file for an extension by the deadline date.
The best is to pay as much as you can by the April deadline to minimize penalties and interest.
If you can pay the full bill within 120 days, you will still pay penalties and interest on the balance, but there is no IRS fee to set up the plan.
An installment plan is more expensive. You'll pay to set it up, and it costs more in interest and penalties depending on the length of the payment term, six year maximum on that.
Does anyone else have advice for those out there who might struggle with paying their income taxes?
Sheesh, I'm cutting it close. Thanks for the info. It's funny, it's so easy to file these days, and yet I still drag my feet.
Definitely interesting. Is there any good suggestions as to what to replace an SS# with? That article cites 'using public key encryption' as a possible replacement. Sounds like more of the same to me. That would still be a password of sorts, just like our current 9 digit passcode.
Maybe it will be much harder to steal. Probably so. In that case would be good from an identity theft standpoint. But from a 'libertarian, I don't want the government to give me a number that identifies me as a person' standpoint, exactly the same.
Agree. Perhaps a lovely designer chip in the arm. Same tech that are used on lost pets, just release it in Louis Vuitton or Nike. In all seriousness, as libertarian myself, I'd say leave well enough alone. Hackers and criminals will always find a way around obstacles. The less invasive, the less damage it can do, in my opinion.
So I am actually for simplifying the tax code in favor of more uniform standard deductions vs several niche ones that not everyone qualifies for, like being married or owning a house, having several dependents, etc.
I agree. At the same time, it does benefit the government for having several niche deductions. This way, I think it makes the water murky. Many people do not know what they qualify for, the information is out there, but buried it seems. Shoot, I'd settle for simplifying the tax return documents, especially the form to amend a return. That document is a nightmare to fill out.
Recently a White House adviser on cyber security has pushed to phase out the age old Social Security number. Plenty of clout has been raised in the past couple of days about it. So I decided to dig into. Here is an article from ABC covering it.
How did we get our numbers to begin with?:
I'm a history buff, and sometimes I come across articles such as this one. The origin of the number that identifies every American citizen, for better or worse, is the Social Security number. Most of us know how and why this started back in the FDR days when he was trying to bail us out of the depression.
Believe it or not, it was controversial even back then. Back in the 1930's people weren't too happy about receiving a number and being tracked by the government. It started out innocently enough. It was developed by economist Edwin Witte for the Social Security Act of 1935, the numbers were created as a way to keep track of the new retirement payment system. They couldn't just use someone's name and birthday. Also it was used for only certain workers, not all citizens at first. It wasn't until 1989 that it went into full force with new laws and such.
What started out as a retirement tracking number is now the most important form of ID. The SS is now so intertwined with our daily lives, it would be very difficult to get rid of. Just think, one cannot apply for a bank account, employment or even a cell phone without coughing up 9 numbers. They are currently looking into technologies that could change or replace the numbers. So, do you think it's a good thing, or is it just furthering us into a real life Pink Floyd video?
You make many good points there. It will more than likely reform and be a shadow of its former self, and the former being not so great to begin with. Looks like we need to start burying our money.
I recently stumbled upon an article that makes an argument that Social Security will probably not be disappearing any time soon. I know everyone, including myself has worried about it. I know I've said the common phrase "that's if Social Security is still around when I'm that age." These fears have been around ever since the program's creation. So there's bit of relief right there.
The article states that many of the government's projections, especially the one where SS will run out by 2034, is full of errors. Economic changes are very possible in the near future. One for instance, Millennials outnumber the Baby Boomers. Once they reach their prime earning years, revenues supporting current retires should grow. The Social Security Administration can't take these possible economic changes into account when they run the numbers because they are using straight-line-math to project trends into the future. These projections could paint a somewhat okay picture of things to come, but they are what the article says "vastly inadequate for predicting what is likely going to happen."
Groundbreaking Economic Developments:
Few groundbreaking economic developments of the last few decades -- the Internet, China's rise, mobile technology -- were widely forecasted, much less by government officials. Whatever today's concerns, it is far too soon to analyze how tomorrow's unknowns will affect Social Security.
J.K.Logic Wrote: Is a really good resource. Calculators are also good, but this gives you exact information based on your personal history of paying into the system. I signed up a few months ago. Even though I'm very far away from retirement age, it was good to know that I can see what I should expect in the future for retirement, assuming (hopefully) the program lasts long enough for that to happen.
It's a good resource for sure. A good friend got me onto it. I'm hoping the program lasts long enough, otherwise I'm up a creek.
Okay, so, I just registered an account. I found it would be very helpful for everyone, not just for those who are already, or about to retire. Check this link out. This government website helps you keep track of the money you have pumped into the Social Security program. I think it only took me 5 minutes to get everything going, after I clicked on the "Sign in or Create an Account" button. You will have to fill out the typical information such as name, SS number, desired username and password. Then, to further verify your identity, it will ask you as series of questions, relating to accounts you may have opened in the past. Afterward, you will be sent a security code, either by phone or email, once you input the code, you're all set up.
Once you're able to access your new account, you will be able to see your earnings record, the estimated benefits you would be eligible for if you ever become disabled, your last reported earnings, estimates for what your SS retirement will look like, as well as benefits you are receiving if you're already retired. So there you have it, an online one-stop-shop for your personal Social Security information.
Like most tax credits, I would wager most aren't aware of this.
You're right. It's out there in the stacks of vague and jargon-filled information, with every other tax credit.