The state of taxes

This is the second time in four years I've done a post about taxes. The last time was here.

Even though it's an annual event, and a subject everyone likes to bitch and moan about, I don't write about it every year because that way it's just a little less real.

Until April 15th. Then it's very real.

I'm fairly organized about things, which makes it easier to get ready for it. I have my friend Pam Ziegenhagen to thank for that. She probably doesn't even remember, but years ago when we worked together, she told me how she organized all her receipts in different categories in an accordion file. Then all she had to do was add up each section for tax time.

It was good advice, and I've been doing it that way my own self ever since.

But because I know I can wait until virtually the last minute and still pull it all together in about three hours if I have to, I have extra time to get my panties in a twist about getting it done. Which I always do.

I have issues. I never said I didn't.

So here's the thing - sometime in the next few days, I'll buckle down, go through my accordion file with all the past year's receipts like Pam told me, do a little addition, make a master list of totals for my accountant and be done with it.

Then, when I'm at my tax appointment with my accountant Ethan, we'll chat about all sorts of things and I'll stare at the Green Bay Packers posters he has in his office for about an hour and a half while he punches in the numbers in a way that makes everything okay.

Ethan does right by me every year, bless his little ten key.

I was going to end this post with somewhat of a reach. It was going to lead into something something Sherlock Holmes, and working purely by deduction. See what I did there?

Obviously I don't prepare nearly as well for ending my blogposts as I do for doing my taxes.

86 the 1099

It's the very definition of buzzkill. You work a certain number of days for an agreed rate, and you expect to see that amount on the check. Then payday rolls around, and you're as giggly as a 13-year old on her way to a One Direction concert. But when you open the envelope, thanks to Uncle Sam, the check is about a third lighter than you expected.

That giant sucking sound? It's all the things you were going to do with the money disappearing.

Here's how it used to work.

You'd go into an agency, do the work, then send them an invoice. Maybe they'd ask you to sign a NDA. Maybe. Then, you'd get a check for what you invoiced. Every cent. The rate you'd agreed on. The amount you expected.

It was called 1099 income. And it was a beautiful thing. But that was then and this is now.

Apparently those boys at the IRS have no sense of humor when it comes to not getting their payroll taxes from the working masses. Which is what was happening with freelancers in agencies.

So now, agencies are only allowed to hire someone freelance for a very short period of time before they're required by law to put them on staff as a temporary employee. But most of them go straight to temp employee status.

The way it works now is you go into an agency, fill out a stack of employee forms as thick as the Yellow Pages, that range anywhere from the Confidentiality Agreement to the Sexual Harassment Policy (SPOILER ALERT: Don't do it). You also sign a W-4 form which, unlike the 1099, means taxes are taken out for you and you get a W-2 form at the end of the year with the breakdown.

It also means you don't get the freelancer's second best friend next to free food: deductions.

In a nutshell, W-2 money is good and bad. Good because you don't have to remember to pay those pesky quarterly taxes like you do on the gross 1099 income, and the agency pays half the employee tax. Bad because you don't get all the samolians.

I've always been good with money - go figure. So I prefer 1099 income. I'd rather juggle my money accordingly and pay my own taxes. I also have this little pet peeve about the government reaching into my pocket, or paycheck, and taking money out.

Among all the papers you sign for W-2 income is an agreement that even though you're considered a temporary employee, you're not entitled to any benefits.

Including getting the full amount you're owed on your check.