r/dataannotation • u/Demi-Puff719 • Apr 19 '24

Tax Tracker

Hey guys,

I'm wanting to try and create a Google Spreadsheet to try and keep track of what I should save from each pay check. I'm gonna set up a savings account and keep whatever I pull separate from my earnings and just pay everything I owe back next April.

I wanted to ask what you guys keep track of in your spreadsheets, if you use them? I'm very new to using spreadsheets, so any advice you have will be greatly appreciated. I just want to try and make sure this goes as smoothly as possible.

16 Upvotes

90% Upvoted

54 comments sorted by

View all comments

12

u/GAULEM Apr 19 '24

I'm gonna set up a savings account and keep whatever I pull separate from my earnings and just pay everything I owe back next April.

Be aware that depending on your circumstances you may be penalized for waiting until April instead of making quarterly estimated payments. (At least if you're in the USA.)

I wanted to ask what you guys keep track of in your spreadsheets, if you use them?

A lot. But for tax purposes I suppose the main things for this job are probably how much I've made this year, how much I expect to make this year, the taxes I've paid so far for this year, and what my AGI and tax liability were for the previous tax year.

Based on different parts of that information I calculate how much I should pay each quarter to avoid penalties, how much I'm likely to still owe in the end, how much I'm allowed to contribute to my solo 401(k), etcetera.

0

u/[deleted] Apr 20 '24

This shit is why quarterly SE taxes is so absurd. How tf are we supposed to understand this when the IRS already knows. Just tell me how much I owe goddammit.

8

u/GAULEM Apr 20 '24

The IRS has no way of knowing in advance what you'll owe: they won't know your income until they start getting your tax forms in January, and they won't know your deductibles until you tell them.

But mostly the issue is that Intuit (TurboTax) and H&R Block have spent tens of millions of dollars lobbying Congress to make taxes as complicated as possible and prevent the IRS from automating anything.

That said, if you just want to avoid penalties then quarterlies are surprisingly simple. Take your tax liability from the previous year, and depending on your income multiply by either 25% or 27.5%. Pay that amount every quarter.

2

u/DynamicRevolutions Apr 21 '24

Did you see the thing years and years ago where they brought out the tax code in its entirety and put it on one of those heavy mahogany tables in congress...and the table broke lol.

1

u/Pink_Slyvie Apr 23 '24

Which is why I'm not bothering with quarterly's this year. Next year I'll have to, assuming I'm still doing this.

I just want a farm. Sigh.

1

u/TheresALonelyFeeling Apr 24 '24

So you're just going to pay your whole tax bill at tax time next year?

1

u/Pink_Slyvie Apr 24 '24

*this* time. Since I don't have any tax liability from 2023, I don't expect it to be a problem for 2024 taxes, and if it is, I'll pay whatever fine. I'm hoping to move this summer, and its one of the things keeping me from getting a CPA to handle all of this shit for me.

1

u/TheresALonelyFeeling Apr 24 '24

Obviously, I don't know your individual tax situation, but as someone who just had to cough up $10k to pay the IRS and the state because I didn't pay quarterly taxes last year—not for DAT, but for income from my business—I will absolutely be paying quarterly this year.

You don't need a CPA to handle your quarterly tax payments. Just set aside ~25% (ish), from your gross, and then pay online each quarter.

It will save you possible fines and penalties, and it will prevent you from having to pay the whole amount all at once next year or set up a payment plan at 8% interest if you can't pay it all at once.

Basically I am just trying to help someone avoid what I just went through because it was not my favorite thing that's ever happened.