Help! Caesar Wants My Money
The better part of my day has been spent determining my federal and state income tax debts. For years I sent my information to an acquaintance across the state and trusted her tabulations. A few years back I determined she had omitted a very important tax deduction, and further discerned that she was simply using a computer program to do the figures, and therefore decided I could do the same and feel at least as comfortable with the results. My taxes can be filed on a standard 1040 form with but a few twists along the way. However, the process is anything but clear. It seems I owe about $4000 according to initial computation. For a guy but a couple of missed paychecks from living on the street, that is a lot of money! If push were to come to shove, I guess I could further ingratiate myself to Visa and pay the bill. But first I want to make absolutely sure that is what I owe. Therefore I calculated my taxes with a different and supposedly credible online tax program. And this attractive little program tells me I am supposed to receive a $1600 refund. Let's see.... pay $4000, or receive $1600? I'm suspicious. And I would rather not begin a full-time prison ministry, complete with my own cell and boyfriend named Bubba, just yet. So I intend to give it a rest, and do some more calculating in the next several days.
A major complication is that I've been accustomed to receiving a W2 form. This year our church clerk unexpectedly passed away. Truly do I miss her. And I especially miss all of her official files, which mysteriously have never been found. So the new guy in charge of the finances is a strict businessman, who insists upon issuing to me a 1099misc. I do not see the difference, except that apparently it means if I continue to calculate my taxes as usual then I will owe a lot more.
Here's my personal approach to the paying of taxes: I want to be legal and ethical, and pay as little as possible. A friend, a staunch unionist and dyed-in-the-wool Democrat, once told me that he does not think he pays enough taxes. Maybe I could give him my $4000 tax bill? I want to take advantage of every available loophole and deduction and exception possible. I will vote against those who will expand the tax debt, and support those who will lower my taxes. I am willing to help my brother who is in need, but not because the federal government puts a gun to my head and takes money from my wallet. I'm considered to be self-employed, and therefore I pay a double Social Security tax. It angers me greatly that politicians have stolen from my federal retirement fund to finance their re-election with social bribery. If I was so reckless with my tax money (and in spite of claims to the contrary, even as it heads to Washington, it is still MY MONEY!), I would be arrested. They do so, and then buy another Cadillac. I would like to storm their mansions in Washington, seize all of their bags of tea, and throw them into the Boston harbor. But, in the end, I guess I would still have to pay my taxes.
In Matthew 22, Jesus said, "Render under Caesar..." That's what April 15 is all about. But the odds are rather high that I will not be paying four grand to finance his pet projects, no matter what TurboTax is now saying.
03.21.08 (10:52 pm) [
edit]
posted by:
auntconi (
reply)
post date:
03.21.08 (8:08 pm)
WOW!
I would go for the one that offers you $1600!
Remember, if need be, I will be glad to bring you coffee and cookies!
posted by:
PastorDave (
reply)
post date:
03.21.08 (8:11 pm)
Reply to: auntconi
Thanks. Could we have a bake sale? Dave's Bake Sale. If we sell 8000 cookies and a few thousand cups of coffee, I think we can make a dent in this debt.
posted by:
auntconi (
reply)
post date:
03.21.08 (9:32 pm)
Well, you are the boss
~ will surely give it a try
~ if nothing else we can have a lot of cookies.
hmmmm
~ maybe Uncle Sam would be pleased
~ well if nothing else with a huge box of cookies
~ we will prepare a nice variety!
posted by:
nightbreed (
reply)
post date:
03.21.08 (9:35 pm)
H & R BLOCK......USE IT!!!!
posted by:
fractalmom (
reply)
post date:
03.22.08 (6:22 am)
um. if you are using turbo tax...go ahead and take the refund, but make SURE you do the tax guarantee thingy where you pay like $35 and if you get audited and you are wrong, THEY pay the taxes you owe. That way you are in the clear.
And, when you did it, did you check the box about 1/3 of the way through the income thingy that says the income came from being in the clergy? if you were working under at w-2 and didn't check that, your tax bill would be high. that could explain it.
also,the difference in 1099 M and w-2 is a big one.
posted by:
Barnabus1 (
reply)
post date:
03.22.08 (8:43 am)
Just think, that's 3 times MORE than Nixon paid when he was President, had income from a law firm, book signings, speech's etc. One year when I had to pay 2,000 in taxes, I learned that he had to pay only $850.00 I went nuts!!! My pittance income vs his huge income!!!INJUSTICE
posted by:
Barnabus1 (
reply)
post date:
03.22.08 (8:43 am)
Did a Pastor's Business Card post...think you'll love it!!!
posted by:
surrogate (
reply)
post date:
03.22.08 (10:11 am)
If the church withheld payroll taxes and you are church considers you its employee, which, if you've received a W-2 for all these years seems the case, then you should insist in receiving a W-2 for this last year as well. Receiving a 1099 from the curch means you'll have to treat your services to the church as a business, throwing you into a situation where you'll have to estimate your taxes quarterly and treat yourself as a self-employed businessman. I suppose that could be okay in the long run, but your FICA outlay will almost double. I'd suggest you call a meeting of the board and insist on receiving a W-2.
The tax prep programs are all pretty good in my experience. I'm pretty sure you can trust them.
posted by:
surrogate (
reply)
post date:
03.22.08 (10:13 am)
oops... I meant "if YOUR church considers you its employee..."
posted by:
nightbreed (
reply)
post date:
03.22.08 (11:08 am)
bush passed that refund bill thingy where your suppose to be able to get a refund back.. 300 for single, 300 for those with ssi, 300 for claiming a child, 900 for married couples and the checks are suppose to start being mailed come may.... wouldnt that help you a little??
posted by:
funkadelichika (
reply)
post date:
03.22.08 (12:27 pm)
If you have a bakesale I will take a cookie.... Tax time is outrageous a lot of the time...And it all seems so mysterious too... Well Hopefully they owe as opposed to you owe them. Good luck!
posted by:
inkspector (
reply)
post date:
03.22.08 (12:56 pm)
I have a tax headache also so here are a couple of Excedrins. Good luck!
posted by:
chrisflea (
reply)
post date:
03.22.08 (1:20 pm)
I have been using Turbo Tax for the past 5 or 6 years. I haven't had any problems. Good luck.
posted by:
kurtmaddox (
reply)
post date:
03.22.08 (5:35 pm)
You may a real can of worms here PD! If your Church has been issuing you a W2, but, should not have been doing so for the previous years, then YOU are liable for what could be a pretty big chunk of back taxes.
Surrogate is spot-on that the difference between a W2 and a 1099 is HUGE! If your new person is an experienced business person, then it would seem he's likely right and the previous years were wrong.
Without all the facts, it's impossible to tell exactly what the right answer is for your situation, but, you'd be remiss to try to handle this yourself. Surely there's a tax professional at your church or affiliated with a business that's affiliated with your church that can help you sort this mess out.
Remember, the advice to take the audit insurance is sound, but, only covers if the software calculations are wrong, not if you make mistake with how you should be answering the questions. Read the fine print and you'll see that the coverage is very limited and not all blanket audit coverage implied by the prevs comment. (FractalMom may, in fact, be aware of that and just didn't go into with a short comment.)
H & R Block is also a fine suggestion.
Just a quickie about your general tax post -- you fail to mention that your church, unlike other small businesses, is NOT taxed on its income at all meaning that the church is able to pay you from tax-free revenue even though you are taxed personally. If the church were taxed as the small business that it certainly is, then the income available to pay church salaries would obviously be much less.
By the way, if the church is simply trying to convert you from a W2 employee to a a 1099 independent contractor, then they are attempting to advantage the church's finances at your expense. That may be fine with you, but, you should understand that's what their doing.
Most small businesses that make this move would give the transitioned employee a raise to compensate for the disadvantaged tax treatment. You should definitely get on the same page with the church's business manager and the board.
posted by:
babafan (
reply)
post date:
03.26.08 (4:10 pm)
Pastor Dave,
If you are an employee of the church then you should be using a W-2. If the new person did not give you that form, by law which they are required to do, then they are at fault. That person should have informed you that they were trying to change your status to self-employed so you could save your expense receipts for tax deductions IF you agreed to such a contract. It seems highly unethical that you were not informed of the issue beforehand.
Hope this helps. I'll be praying for you.
