Taxes And Pay

Death and taxes, something we all have in common – or not. Technology is working on redefining death’s schedule. More about that some other post. Taxes, well, all for one and one for all doesn’t apply as we’ve seen billion dollar corporations and individuals pay far less than their share. But even looking back on one person’s life, mine, it becomes obvious that here in tax season it’s possible to have a completely different experience from year to year, or person to person. We got into this mess because it seemed like a good idea at the time. Oh, if we could pave a road with good intentions. Where would it lead?


I started as a dependent. Folks just a little older than me were born as something the US Internal Revenue Service paid no attention to. Now, kids are starting with Social Security Numbers and are counted by their parents for tax breaks. It may not mean anything to the kids, it didn’t to me, but so begins the tax journey.

Cash Under The Counter

Shh. My first jobs were paid without any paperwork. Nothing was reported to the IRS. Why would it? Parents pay kids for lots of things. There are even these things called allowances. Imagine that. Tax-free! Eventually, my Dad paid me to do things at his office, too. A real job, and one that I did, but didn’t leverage. I learned how to do a job and be responsible and dutiful, but didn’t think about learning about business, logistics, customer service, etc. Of course, being 11 years old, getting woken up at 5AM on a Saturday to work until Noon usually meant that when I was done with my tasks all I wanted to do was take a nap. Being a janitor in an oil depot was…less than inspiring. The only paperwork was a few dollars I received that my Dad pulled from his wallet at the end of the shift.

Summer Jobs and W-2

Summer jobs existed, way back when. I hear they’re harder to get now, possibly because senior citizens are handing onto simple jobs to bridge financial gaps after retirement. Mine started small, staffing something new and radical at the time, a self-service gas station. They liked the idea of a tall high school student who might intimidate the thieves who regularly held up the station. Then the boss saw my six foot height came with less than 150 pound weight. Not intimidating, but I worked cheap. Never got robbed, though!

From there, a more substantial summer job, working in one of the local steel mills. Irvin Works, a sheet metal plant that was over a half mile long. Guess who got to sweep it. Here’s your broom. Here’s one end of the building. See how far you can get to the other end in eight hours. Also, join the union. Not optional. Oh yeah, and stay alert because any one of the over seventy furnaces may open without warning within a few feet of the broom. (There was a warning, but the siren wasn’t much louder than the furnace.) In 1977 I was paid $9.75 an hour, a rate that some consider reasonable in 2020. Really? At least by the end of my third summer there I’d advanced to the title of hooker. Really. There’s a crane. It has a hook. The person who works on the thing being hooked or unhooked is called the hooker. Good pay. Layoffs without notice.

And paychecks. Finally, paychecks – and deductions, and eventual tax forms which flowed from yet another form, the W-2.

A Career Job and W-2 and Not Much More

Graduated college, got a job with Boeing, and those W-2s got bigger numbers. For a while, filing taxes got easier. I was living on every other paycheck and saving the rest. The IRS came out with the 1040-EZ, which worked for me because my finances really were easy.

Then Came Stocks and More Complicated Forms

Eventually I saved enough to return to college to get my Masters, which I did. During that period I became a more determined stock investor. Enter capital gains and losses and keeping track of transactions, something most people didn’t do because they either didn’t save, or let mutual funds take care of things, or hired someone to deal with details. The stack of paperwork and arithmetic grew rapidly. The tax form may only need a few bits of information, but the supporting documentation made file folders bulge.

Then Came A House and More and More

After my Masters I went back to living on only half my paychecks. Now, instead of the money accumulating in a bank account, it went into stocks, lots of different stocks. (See my book, Dream. Invest. Live., for details.)Dream Invest Live cover At least the paperwork was familiar, and computers were becoming more common. That helped. A practiced savings plan and frugal lifestyle meant I saved enough for a downpayment on a house. Oh dear.

Setting aside my lack of experience with house maintenance, I was a first-time homebuyer, tax codes encouraged homeowners to track expenses to account for money spent on improvements. There were benefits to reducing taxes when the house was sold, a detail that isn’t as important, now because I think the code changed.

The tax task grew because those forms were getting more numerous.

Then Came Marriage and Help

Skip ahead a few years and welcome to the married world. Two incomes. No kids. Many of the same issues and forms, but now there were three times as many accounts: mine, hers, ours. Help! Which we found by hiring a tax accountant. It was still work to compile the documentation, but someone else figured out the forms, the tables, the deductions, walked us through the results, we signed, and we were done. Especially with the addition of rental property, it was a relief to have professional help.

Then Came Retirement and Divorce

For one year I celebrated an early retirement at 38 years old because the two of us shared common habits of frugal living and determined investing. The taxes didn’t change, though, because only one of us retired. There was a period when we were both retired, but it was so short that the taxes didn’t change much.

Single and Retired

Finally, a simplification in taxes. I was retired and living off my portfolio. One or two trades a year satisfied my expenses. No W-2. No rental income. No house, except for the one I rented. Back to simplicity. If only it could last.

Triple Whammy and 1099

My Triple Whammy. My taxes remained simple because my portfolio imploded. The main complication was paying penalties for early withdrawals from my retirement account. When you aren’t making money, there’s little to report; but sometimes it takes several pages to prove that zero or nearly-zero really is a very small number. To make sure I got every advantage, without spending much money, I enlisted Turbo-Tax.

For years, the only change was the number and size of my 1099s. I was fully engaged in the Gig Economy, dutifully reporting my income, while working seven days a week and not being able to pay all my bills. (Hence My Mortgage Modification.) I probably could’ve benefited from professional help, but how could I hire someone when I couldn’t even pay my mortgage? My Turbo-Tax sessions became anxiety sessions.

Add Real Estate and Help

Recently I became a licensed real estate broker. Oddly enough, the forms haven’t changed. Brokers are independent contractors, a common term in the Gig Economy in a profession that’s used the term for decades. Trying to understand a new business and its own special tax codes was too much. The total income had changed enough to be encouraging, barely. A small mistake could make a big impact. I hired a tax account, yet again and was glad. And will do so again. I’ve already started collecting the documentation. I’m also working on closing a large enough deal to pay the taxes, but that’s another story.

Everyone Else

When I hear politicians and economists and ideologues talk about tax policy, they frequently speak as if everyone is having the same experience. There’s some mention of the taxes of the rich versus the taxes of the poor, but I see the taxes that are a mess. There is no generalization. People living off W-2s have a different experience from people living off 1099s, people concentrating on the forms for capital gains and losses, trust fund and annuity and retirement incomes. Each person can have a mix, and a mess. It is amazing that anyone gets it right, even with professional help.

Tax season affects us all, but each of us experiences a different effect. “Get your rebate now!” A rebate? Are you kidding? My 2018 taxes are still on my credit card, dwindling, but still there. Self-employment taxes don’t seem to care if “pulling yourself up by your bootstraps” is barely profitable. There are taxes based on revenue, not income; an irony considering that the Internal Revenue Service manages Income Taxes but sometimes taxes revenues even if there is no income. Another reason to be impressed with any entrepreneur who finally breaks into profitability.

Even writing this post reminds me of how little I know. Some tax professionals are probably shaking their head the way some health care professionals shook their head at my issues with the health insurance (not healthcare) companies. And yet, work at almost anything else in life for fifty years and expect to get much better at it. The only thing I’ve gotten better at is recognizing when asking for help is a good idea.

Each of these tax codes was passed for what seemed like a good idea: deductions for kids, an easy form for simple finances which has since be eliminated, using Social Security Numbers for taxpayer identification even though it wasn’t supposed to be used that way, et al. Et al, now means over 2,500 pages of US tax code. If you haven’t read and understood it, how do you know you’ve filed your taxes correctly?

I am glad I’ve found someone to rely on. I barely understand my taxes. My accountant is a professional and human, so I expect her to know much more than me, but I don’t expect her to know everything and everything’s implications. If I can’t understand my taxes fully, I won’t make claims about someone else’s, what works for them and what doesn’t. What I can state is my great desire for someone somehow to greatly simplify the situation fairly. With the way the US is going politically, and the increasing debt and deficits, this unsustainable situation is going to change. If everything eventually dies, maybe that will apply to the US Tax Code, too.

About Tom Trimbath

real estate broker / consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: and at my amazon author page:
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2 Responses to Taxes And Pay

  1. Pattie Beaven says:

    You reminded me to go through my expenses this past year. Sadly, I estimate I spent over $5000 on travel, printing, and conferences to better my book/program or promote ZooFit. Unless I’m mistaken, I made approximately $250 back. I’m pretty sure I’m in the red. I’m not really that good at math, though. Luckily, my dad is an accountant, so I don’t have to figure this all out on my own.
    Maybe it’s time to go back to the workforce and put this ZooFit business more to rest…

  2. Tom Trimbath says:

    Ouch about the $5K. Workforce? Sometimes we gotta do what we gotta do (he says while working from the real estate office on a holiday.) Put ZooFit to rest? I hope not. You’ve built a good foundation for marketing and awareness. You have a unique set of skills: training, nutrition, public speaking, writing, videography, and enthusiasm. Maybe you’ll have to do both for a while? Good luck in any case.

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