That delay made a big difference. The US government delayed the income tax deadline from April to July. That (and an able accountant) meant 2020 was the first year in years that I was able to pay my taxes on time in full without resorting to payment plans or credit cards. That’s a significant hurdle crossed in my journey through America’s wealth classes. I was able to pay my bills without worry. I feel like I finally have boots from which I can tug on bootstraps as I pull myself back towards a life that’s more sustainable.
The main trend continues. The more I make, the less I pay. Maybe that’s the influence of hiring an accountant, but it may also reflect the inverted nature of taxes in America. Income taxes are designed to demand higher taxes from higher incomes. All things staying the same, if I make more this year than last year, I expect to pay more taxes.
Check back through this blog and find a yearly progression that challenges that. Reach back far enough (though those posts may be abandoned by the host) and find a time when I was retired and paying almost nothing. As I recall, there was one year when I received a refund despite only having income from capital gains. Then, as I lost almost all of my assets, the amount I paid dramatically increased. Hence, credit cards or IRS payment plans. Money being spent to manage money that I owed while not making or spending much money.
Thanks to a friend’s amazing generosity, there was one year when I was able to pay, though I still had significant debt. (I didn’t expect them to provide the one gift, and certainly didn’t intend to ask them to clear everything.) Last year I was back to putting the taxes on my credit card, which has almost been paid off – again. There’s a good chance that debt will be gone shortly. Less money going out means more money to catch up on deferred repairs and maintenance of my business, my house, my truck, my stuff – and my health. Such seemingly simple hurdles can hinder too many, and I’ve seen it happen to me.
It’s hard to pull yourself up by your bootstraps when you can’t afford boots.
I can afford boots, now.
The two biggest differences have been generous friends and significant employment. I tried doing it alone, but years of hunting for jobs resulted in being turned down because I was too experienced (old), male (they specified they weren’t comfortable hiring men), knew the wrong people (even if I didn’t agree with them), and had the wrong address (really.) Of the few interviews for full time jobs (I can only recall two in ten years), one was particularly fascinating. They interviewed me because; “They didn’t believe anyone could have such an impressive resume.” (not verbatim but close) I met 22 of their 24 criteria, but they never intended to hire me. And they didn’t.
And now for something different. Welcome to real estate.
It only took about a year of urging from friends for me to try becoming a real estate broker. Fortunately, that’s a job that has one prime explicit criterion: passing the test. I did that. The prime implicit criterion is being able to survive long enough to begin earning enough money. The test and setting up the business may cost a couple of thousand dollars, but surviving long enough costs far more. This year, I expect to clear that hurdle, too.
If my taxes had been due in April, I would’ve been back in the same debt cycle. Despite coronavirus, I was able to earn enough money in the last three months to pay my taxes, as well as every outstanding bill in my in box.
For years I know I’ve been on the edge between poverty and a sustainable lifestyle. I could see both possibilities from where I stood. From there I could appreciate how tenuous my position was, and also feel dismay at the tens of millions of Americans who were on the wrong side, dismissed by rhetoric and ideology despite the reality that they were humans, hard-working citizens, who had the bad luck to be trapped in a system that didn’t, and sometimes couldn’t, care.
I made more this year than last year, and my taxes went down. I’ll assume that is due to the expertise of a professional tax preparer, and wonder if it is also because someone who identifies as a real estate developer has been given America’s most prominent position.
The pandemic has changed everything. While many places are shutdown, Whidbey Island, where I live, is in Phase 3 of 4 (for now.) The island is largely rural with only one large-ish city. Across the country, urbanites sequestered in condos and apartments are seeking escape to places where there’s more room. Sharing hallways, elevators, and laundromats is enough to convince some to consider a house with enough land to garden, and a large enough buffer to be able to wave at the neighbors without also worrying about their coughs and sneezes. I might be quite busy for quite a while.
The US tax system isn’t so broke that those with the least pay the most, but it is common to hear about those with the most paying the least, or nothing, or actually getting money (think subsidies and corporate welfare.)
Thanks again to those who are generous, those who are capable professionals, and whoever had the idea to postpone the tax deadline just a few months. You’ve helped me create a bootstrap I can tug on.