Ready for the 1st

[bill_schubert]

I'm ready to do my end of year financing. Really curious about how investments fell out and where I actually stand and to get set up for the new year. And, since I actually made all my estimated tax payments, I'm more motivated than usual to do my taxes and see how things fall out. Last year I had to pay a penalty having not sent in any estimated taxes. This year might involve a refund but I doubt I'll owe any more.

So I think I'm going to have to report my Prolific money. I bought Ethereum with it. Only a couple of hundred bucks worth so it will fly below their radar but it is recorded and I'll get a statement from PayPal. Crypto gets a lot of attention now days. I've got $40 or so in short term capital loss with it. I'll likely report all the gains and losses as it is not so much either way and will be sure I stay clean.

I'm interested how much the IRS will be using AI. We'll likely never know but in the past I've depended on being a very small minnow. It worked for years. I've never been audited even after starting a couple or three businesses and having a self directed IRA. Hell, I'd have audited me. But what seems like a lot to me is not even chump change to them. BUT with AI it is way more efficient and zero manpower. I've always thought that CPAs will soon be overtaken by AI. Tax returns would seem simple to such a system as they have on hand now days. Which means no one is too small to merit scrutiny.

With the new administration things will be in such chaos that who knows what will happen.

Comments

[msconduct]

My accountant errs on the cautious side (as do I) and has never had a client who's been audited. This is massively soothing. I'm terrified of getting on the wrong side of IRD accidentally.

[siglinde999]

I wonder how much the tax collectors pay attention to people using approved tax filing software. It is still possible to cheat, I suppose, but at least they don’t have to worry about the math being wrong (my problem every year before I started using a tax program). And the people like me, who get an official statement of pay and taxes paid, are easy to cross-reference with the employer declarations.

[bill_schubert]

There are some red flags that the software will point out. 99% of the time it is really straight forward. If someone pays you money they have to file a form with the IRS. If you get a copy of the form and report it in the software there is zero chance that there will be an audit. I only had issues with not having money withdrawn automatically from what was paid to me and not paying estimated tax. The IRS wants their share when you get yours, not at the end of the year.

Investments get tricky but now that it is all online the investment places do all the legwork so it is just like a pay check.

There is little reason now days that the IRS just doesn't send a bill with what you owe. Why do you have to tell them what they already know and pay a third party for the priviledge?

[siglinde999]

Some places seem to be moving towards having the tax people do more of the work for you. It makes a certain amount of sense, though we have all kinds of deductions (medical, living in the far north, volunteer firefighter expenses, maybe even charitable donations) that complicate the paperwork. The people who would benefit most are those who have little or no income and don’t file because they don’t think they need to. In fact, if they file they are often eligible for Old Age Security, dental care, child benefits, etc. I think that had been part of this government’s plan, but I’m pretty sure it won’t survive the next government (assuming elections go as badly as I fear).