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My wife, Fidelity, is not
one for subtlety. When she has an idea, which is often, she insists on
sharing it with me.
This week, her idea was we should pay
less taxes.
"Great idea!" I cried when
she told me the news. "But I’m going to one-up you with an even
better idea – let’s not pay any taxes at all!’
"I’m not kidding," she
replied. "I think we’re paying way too much."
I had heard this before. "I agree
with you wholeheartedly. But other than going to jail for tax evasion I
don’t think there’s much we can do about it."
That’s when she nailed my sorry hide.
Unbeknownst to me, Fidelity had been doing research. With that look in her
eye that clearly said I was the biggest bozo that ever walked the earth,
she pulled from behind her back the January issue of Money magazine.
"Check it out, Mr.
Give-It-All-Away," she said triumphantly. "You’ve been missing
the boat again."
I glanced at the cover, which was now
about three inches from my face. In huge block letters, it read "stop
paying 40% of your income in taxes – how to cut your bills."
I grabbed the magazine and looked at
Fidelity, who was shaking her head in disgust. Here I was, the so-called
patriarch of our struggling little family, and I was stupidly giving away
money to the government because I was too busy to pick up a copy of Money
magazine.
"Have you read the article?"
I asked.
Fidelity is the master of many things,
none of which have anything to do with finance. "No," she said,
walking away. "That’s your job. I just wanted to show you that you’re
doing something wrong."
I looked again at the cover. It seemed
to be saying what I subconsciously always feel – only idiots pay their
fair share of taxes. Everyone is dancing through the loopholes. Except me.
No one ever taught me how to dance.
I immediately thought about my
worthless accountant, whom I’ve always suspected as secretly holding
back valuable information from me. I’ll have to give him a copy of the
Money article when I tell him I’m changing to another firm.
I walked over to my reading chair,
perusing the index of the magazine on my way. "Smart Ways to Stay
Ahead of the Feds," by Teresa Tritch. "These money-saving
strategies will work now – and through the ‘90s."
Teresa, Teresa, my savior. Show me the
way. I have been in the dark for too long, throwing money down black
holes. I knew there was an answer. I knew it.
Fidelity wisely removed the
children from my area of concentration (approximately 40 yards) and I sat
down to discover the secret of saving thousands and thousands of dollars
each year that we could sorely use.
I started with the story on federal
taxes, which is the biggest chunk (the 40 percent refers to a compilation
of federal, state and property taxes).
I turned right to the section on
self-employed taxpayers (That’s me! That’s me!). My own section! What
a bonanza!
What a disappointment.
Gee, I learned that I should maximize
deductions. I can deduct work-related travel and entertainment expenses,
dues to professional organizations and, wow, subscriptions to business
publications.
Duh.
Next I read that I should
contribute "a healthy chunk of your self-employment earnings" to
a retirement account, thereby avoiding taxes on the amount contributed.
Duh. I have a retirement plan. End of
article, except for a tidbit titled "Consider Incorporating,"
which warns that corporate status "could be a tax trap."
Thanks, Teresa. The article was well
researched and complete, and I'm glad it was brought to my attention.
"Well," said Fidelity when
she returned to the room. "Did you learn something?"
"Yes, I did," I replied.
"I learned to stop worrying that I was missing out on something. I
learned that there are no secret loopholes for the self-employed."
Fidelity gave me that look again.
"There must be something we can do," she said. "You must
have missed something."
I thought about it again. Fidelity was
right. I must have been duped. Money magazine had obviously joined forces
with my accountant. They were in on the secret loophole and wouldn’t
give it up.
Two-hundred million American
taxpayers and I’m still the only one paying my fair share. No wonder
Fidelity thinks I’m a bozo.
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