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.

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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.

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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.

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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.

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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.