Up the Hatch
How important is it to pay your taxes? Pretty important, I’d say. Especially when failure to comply can result in more time in jail than if you shot two people in the head and killed them in cold blood.
Richard Hatch, the original winner of the TV series Survivor is back in trouble for his taxes. He turned himself in to authorities on Monday and will begin serving a nine-month sentence for violating the terms of his probation for tax evasion.
Hatch previously served a three year sentence for tax evasion. He was ordered to pay taxes on show winnings and other income but has not completed refiling of his 2000 and 2001 tax returns.
I didn’t know this, but Hatch was currently a contestant on Donald Trump’s reality show The Apprentice.
The Donald has said he would consider helping Hatch pay his debt.
“It sounds like a very tough predicament,” Donald Trump tells PEOPLE. “I may ask him if there’s anything I can do … I may get involved and ask him what the hell is going on.”
On the current season of Apprentice, Hatch quickly made enemies of Jose Canseco and David Cassidy, who accused the reality star of shoving him. Cassidy was ultimately fired.”He wasn’t loved on set because it’s a competition but I will say he was respected,” Trump said, adding that helping Hatch pay his debt is “something I’d think about. He’s been a great character on the show.” Source.
The judge surprised even the prosecutors by adding an additional three months to Hatch’s sentence beyond the six month maximum per federal sentencing guidelines.
The IRS says Hatch owes $2 million.
Hatch will now have to pay a staggering $2 million to the IRS.
The debt includes not only his Survivor winnings, but further income he has made since appearing on the show and penalties for his evasion. Source.
Times are apparently hard for Hatch, who told the court that he’s only made about $27,000 since his release from prison in October 2009, which would put him even below my scrawny income. Hatch has been looking for work though, claiming he pursued employment in “marketing” to working on a fishing boat.
Personally, I think the judge should have been a bit more lenient. It’s not like Hatch plugged two people full of lead. If that was all he done he would have already been off probation by now.
A very taxing situation
For the last three years, my wife and I have come up short on our taxes. The amount withheld from our paychecks has been insufficient to cover what we owed.
This post may come as a shock to some of you, but the gist is this: The current withholding system is not necessarily designed to collect what you will owe.
Every year it’s the same deal. Get the taxes done and then be subjected to intense sticker shock as we realize we’re fucked. We don’t mind being good Americans and paying our fair share but this is ridiculous.
Each time this happens we immediately fill out new W-4 forms based on the recommendation of our tax preparer and submit them to our employers.
I have no doubt that I’m going to be forced to cough up more dough for 2009. With that in mind, I decided to finally take some action and figure out just what in the hell is going on.
In my grubby little hands I’m holding my first paystub of this infant year. Everything that happened this pay period exactly matches my year-to-date totals. What an exciting time. I very carefully scrutinized the amount withheld for federal withholding. It seems small. Damn small.
I went to the internet and found this page. The “2010 Withholding Calculator” on the official IRS website. I went through their five-page process and got a “page not found” error as the result. Typical.
I was determined, though, and not to be deterred so easily. I tried it again. Einstein said that the definition of insanity is doing the same thing and expecting a different result. Guilty as charged! The insanity, however, is that on the second attempt it worked. Holy … fuck … shit.
Anyway, this story is not about the IRS’ ability to maintain a working web site.
The IRS web site had excellent advice for us. “You and your spouse should each enter 0 on line 5 of all of your Forms W-4.” No shit, Sherlock!
But wait, there’s more. Here’s the good part (my emphasis added):
Divide $X by the number of paydays remaining in 2010 (or use the table below to find this amount), and enter the result on line 6 of any one of your Forms W-4. This is the extra amount you need to have withheld each payday to ensure that you do not have too little withheld. Alternatively, you may split the $X between any of your jobs, by entering on line 6 of each Form W-4 the portion of this amount to be withheld from that job, divided by the number of paydays remaining in 2010 for that job.
There you have it, in writing, from the horse’s mouth. Claiming zero exemptions is not enough. You have to withhold additional amounts or you’ll be fucked. I must be an idiot, because I thought that was exactly what the fucking system was designed to do. When the hell did that fucking change?
You have all been warned. Save extra coins for the King or you’ll receive an unpleasant visit from the tax collector. You can thank me later.
Have yourself a very taxing Christmas
A previous post I wrote where I bitched, moaned, sniveled, whined, griped and complained about receiving a Walmart gift card instead of a Christmas bonus raised a question:
Did my boss select a gift card instead of cash or a real bonus to gain some sort of advantage on his taxes?
I did a bit of quick checking and, as far as I can tell, the answer is a resounding “no.”
Don’t worry, he’s still evil. But apparently that evil didn’t come into play … this time!
What I learned is that the IRS treats cash and gift cards exactly the same. The gross amount for both types of gifts must be reported by your employer to the IRS as “compensation.”
A gift certificate to a local restaurant would be taxable. Taking employees out to dinner at that same restaurant, on the other hand, would still be considered “non-taxable.”
Small gifts, like a Christmas turkey or a fruit basket, may be considered de minimis by the IRS and not subject to reporting as compensation.
For me the issue isn’t one of taxation. It’s that I’ve taken on a ton of additional responsibilities in the last 12 months and I’ve come through time and time again for the team. As such a $50 gift card to a store I don’t like feels more like an insult rather than a reward.
This post is based on information I found on this page on Law.com.
Edit: I just realized this post doesn’t address the main point that was intended. D’oh! Sometimes I’m freakin’ dumb. I guess I still don’t know what approach offers the best tax deductions for the company. So maybe that did still play some sort of role. Who knows? At this point I am so beyond caring.