The Fourth of July holiday reminds many of us that these United States were forged with the flame of tax protest. On December 16, 1773, the Sons of Liberty—a group of Boston patriots disguised as Native Americans— redefined the term “tea party” to mean “throwing chests of tea into the Boston Harbor rather than pay the hated Townshend Act duties.”
Between a Rock and a Hard Place
The IRS conducts worker classification audits on a regular basis. The problem with worker misclassification is significant and erring on the wrong side can result in back taxes, penalties, and interest on unpaid taxes for the business owner. Additionally, because IRS and States share information with each other, a successful misclassification case will result in the other agency looking to the employer for their share of the employment tax pie.
More Social Media Secrets Revealed
Last week, we looked at the Venn diagram with unlikely circles representing “social media influencers” and “sound tax advice.” If you missed it, you’ll be shocked, shocked to discover very little overlap.
But just in case you thought it was safe to open TikTok again, here’s another example of a too-good-to-be-true social media tax claim that turns out to be, well, too good to be true.
Deep Thoughts About Taxes
Most people understand the word “stoic” to mean repressing one’s emotions or simply enduring patiently. However, at its core, stoicism boils down to the notion that it’s not events that upset us so much as our reaction to those events. Stoics look at what happens around them and ask, “Can we control this?” If so, they fight the good fight. If not, they don’t waste time, energy, or emotional balance fighting a battle they can’t win. That same philosophy can help manage the infuriating gauntlet we laughingly refer to as “the tax system.” Former president Jimmy Carter campaigned against it as “a disgrace to the human race,” and 50 years later, his attack still holds true.
Financial Relativity
Time travel is a classic movie staple, to the point where you can hardly venture into your neighborhood metroplex without seeing someone in a rush to get to the past or the future. In The Terminator, Skynet sent a Cyberdine Systems Model 101 (aka the T-800, aka Arnold Schwarzenegger) into the past to kill John Connor’s mother. In Back to the Future Part II, Marty McFly drives his DeLorean 30 years ahead to save his son from sabotaging his family’s future. And in Avengers: Endgame, the gang goes back to 2012 New York to steal the Time Stone, Mind Stone, and Space Stone to keep Thanos from snapping his finger and exterminating half of all life in the universe.
Former Baltimore City prosecutor Marilyn Mosby committed fraud, against her future self. That may sound melodramatic in a movie trailer. But should she really be facing punishment for it?
Was the 401(k) a Mistake?
Retirement sure has changed, hasn’t it? A century ago, it meant slowing down a bit as you got old and frail, but still working until you dropped. In the 1950s and 60s, it meant collecting a gold watch and living off a company-sponsored pension along with health benefits and Social Security. But, supporting retired workers is expensive, and companies grew to resent those obligations. So, in 1980, a Philadelphia benefits consultant named Ted Benna realized that Section 401(k) of the Revenue Act of 1978 could let his employees “defer” part of their paycheck into a deferred compensation plan. Just two years later, 7.5 million American workers were using the new plan to save. Today, there are over 710,000 plans covering more than 70 million Americans, holding over $7 trillion in assets.