ZOMG, Taxes.

[Big Gulp]

You could simplify the tax code by 1) reducing exemptions/credits/deductions and 2) writing the damn instructions in English.

The current tax code is 10 times the size of the King James Bible.  "Reducing" something that size would quickly become a lesson in futility.  We're pretty much at the point where we need to tear the bitch down and start over.

I also don't think this would be either regressive or really cut down on consumption.  For one thing, you'd start the year with the federal government sending everyone a check right off the bat.  You'd get more for dependents, but other than that everyone essentially gets the same amount.  After that we're talking an across the board 23% sales tax, and that'd be the end of it.  For most people they'd be taxed far, far less than they currently are.  And truth be told, I wouldn't be heart broken if this did have a slight drag effect on consumption; it'd incentivize saving, something which we aren't doing at all in this country.

[Abagadro]

For most people they'd be taxed far, far less than they currently are.

This is  untrue. A 23% tax on all purchases would be a HUGE tax increase on at least 50% of the American public (and probably more) as they don't pay much (if any) income tax so their taxes are limited to existing sales, FICA and (maybe) property tax. No way that gets up to 23% of their total spending.  Those with lower incomes spend almost all of their income, thereby making it not only a large tax increase but also regressive to boot.  Add onto this that now everything now costs 1/4 more and you will have reduced consumption and immediate inflation (until wages catch up, if they do).   To have any shot of it not being a complete disaster, you would have to exempt large classes of "necessities" which just creates the same classification problems we have under the current system.

It's quite a horrible idea really.

You could easily cut down the code by eliminating large swaths of exemptions/credits/deductions and adjusting rates accordingly.  They are too entrenched (and popular in some cases) so it isn't realistic, but it is a better idea than fucking over those who can afford it the least.

[Engels]

Aw, come on, I love the 'let them eat cake' flat tax plans of libertarian economists!

[Johny Cee]

For most people they'd be taxed far, far less than they currently are.

This is  untrue. A 23% tax on all purchases would be a HUGE tax increase on at least 50% of the American public (and probably more) as they don't pay much (if any) income tax so their taxes are limited to existing sales, FICA and (maybe) property tax. No way that gets up to 23% of their total spending.  Those with lower incomes spend almost all of their income, thereby making it not only a large tax increase but also regressive to boot.  Add onto this that now everything now costs 1/4 more and you will have reduced consumption and immediate inflation (until wages catch up, if they do).   To have any shot of it not being a complete disaster, you would have to exempt large classes of "necessities" which just creates the same classification problems we have under the current system.

It's quite a horrible idea really.

You could easily cut down the code by eliminating large swaths of exemptions/credits/deductions and adjusting rates accordingly.  They are too entrenched (and popular in some cases) so it isn't realistic, but it is a better idea than fucking over those who can afford it the least.

Right on.

A VAT or Sales Tax of this magnitude would be immensely more regressive for the lower classes,  especially those with children.  In the current system,  most households with income below $40k actually have close to a zero,  or even a negative, tax rate because of the Earned Income Credit. 

As an example,  one of our paraprofessionals is a single mother of two.  She earns a reasonable wage for her education and skills.  She has had a zero tax liability for years,  and in fact received more money from the Earned Income Credit then she paid in payroll taxes.

There's also the fact that any sales tax sufficiently large enough to fund the government will immediately become avoided by most business.  Hell, enough of them skip out of paying Payroll Taxes by paying under the table.  I'd guess from my experience in the field that a fairly significant portion of sales and sales tax is already underreported.  (Have a few retail clients in big shit for this.  A few more I'm almost positive underreport sales and sales tax.

That means,  to effectively enforce a VAT/Sales Tax at these levels,  you'd need a large and oppresive government agency to enforce the regulations, run stings, etc.

[Johny Cee]

Aw, come on, I love the 'let them eat cake' flat tax plans of libertarian economists!

1.  Flat tax plans, depending on the setup,  would be no more regressive then the current tax scheme.  See my calculations and analysis on page two and three of this thread:  http://forums.f13.net/index.php?topic=5004.35

2.  The US is already getting a flat tax plan.  Alternative Minimum Tax is slowly phasing in for an increasing number of taxpayers,  and will become a major issue in 10 years for most of the middle class.

[Johny Cee]

Just spent three days doing the taxes for a trust I am involved with. No program for it so I did it all by hand digging through the instructions and regs. Good god this system sucks. Took me quite a while to figure a lot of this stuff out and I'm a frigging trusts/estates attorney.  I think it is all a conspiracy to keep CPAs flush with argyle socks and sweater vests. Get to do my personal taxes later this week and have a sneaky suspicion I am going to get slaughtered.

You keep your dirty caveman hands off my sweater vests!

[Abagadro]

You can keep your vests as along as you get rid of deemed allocation rules for generation skipping transfer taxes!

[HaemishM]

The wife and I are getting absolutely raped to death on taxes this year.

The reason is that self-employed people, even freelancers, are considered the exact same as businesses, despite having about 1% of the advantages and not being able to buy fucking health insurance for any sort of reasonable sum.

I'd say the IRS could lick my balls, but they'd just take that as permission to cut them off and lick them whenever they wanted to.

[Polysorbate80]

The reason is that self-employed people, even freelancers, are considered the exact same as businesses, despite having about 1% of the advantages and not being able to buy fucking health insurance for any sort of reasonable sum.

On a non-tax related note related to being self-employed, my wife and I recently made a property purchase.  It was made slightly more difficult because even though my wife owns & runs a business employing 30-odd people full & part time, the mortgage companies view her as being "self-employed" and therefore somehow more of a risk.  I questioned the semantics of "owner/CEO" vs "self-employed" and just got blank stares.

On the other hand, since I work for her occasionally and I'm not directly named on the ownership papers (never mind that under Idaho law I'm actually jointly vested in her 51% of the company) I could claim employee status, and would not have the same issue if I were to apply under that basis.

My head, she spins...

[Abagadro]

The reason is that self-employed people, even freelancers, are considered the exact same as businesses, despite having about 1% of the advantages and not being able to buy fucking health insurance for any sort of reasonable sum.

You may not be referring to this, but you can deduct your health insurance premiums on your Schedule C.

[shiznitz]

Add onto this that now everything now costs 1/4 more and you will have reduced consumption and immediate inflation (until wages catch up, if they do).   

A sales tax has no inflation impact. Yes, the final price is higher due to the tax, but this is not an inflation effect.

Also, reducing consumption in favor of savings is a wash as far as economic growth goes:

Income = Consumption + Savings
Consumption = Income - Savings
Savings = Income - Consumption

It doesn't matter what side of the equation gets taxed as far as econmic growth calculations are concerned. Economies driven by an excess of Consumption (US) or Savings (Japan) can both be robust. The goal should be to find an optimal balance. The US system encourages consumption because earnings are taxed twice: wages then investment income.

[Abagadro]

A sales tax has no inflation impact. Yes, the final price is higher due to the tax, but this is not an inflation effect.

Today I can buy an apple for $1.06 (of which 1 dollar goes to the store and 6 cents goes to taxes).  After this proposal is passed, the apple now costs $1.23 to purchase.  The relative value of my money to the purchased product has devalued. How is that not inflation? 


/not an economist so actually asking

earnings are taxed twice: wages then investment income.

Since you are only taxed on the gain realized from investment, the money is not taxed twice. Your wages are taxed when you receive them and, if invested, becomes the amount of basis you have in the investment which isn't taxed if you liquidate the investment.

[shiznitz]

The term inflation ignores taxes. It is just a definitional thing. Taxation does not affect purchasing power. It is a wealth allocation tool within a society. That said, taxation in practice reduces what one can afford with a given sum of money so I saw what you were saying. I just had a diction disagreement.

Since you are only taxed on the gain realized from investment, the money is not taxed twice. Your wages are taxed when you receive them and, if invested, becomes the amount of basis you have in the investment which isn't taxed if you liquidate the investment.

Holding cash is an investment with a negative return due to inflation. Therefore, if one is not going to at least attempt to invest unspent wages/income to overcome the negative effect of inflation, then one might as well spend the money (consumption) right now. Any effort to save that generates a positive return no matter how small, results in taxation eventually. So, yes, my use of the term "double taxation" was incorrect in an attempt to be simplistic. But that does not change the fact that one can spend income today or invest it and be taxed again tomorrow.

[Yegolev]

Aw, come on, I love the 'let them eat cake' flat tax plans of libertarian economists!

1.  Flat tax plans, depending on the setup,  would be no more regressive then the current tax scheme.  See my calculations and analysis on page two and three of this thread:  http://forums.f13.net/index.php?topic=5004.35

2.  The US is already getting a flat tax plan.  Alternative Minimum Tax is slowly phasing in for an increasing number of taxpayers,  and will become a major issue in 10 years for most of the middle class.

This is probably too political for me to reply to, but I am pro-flat-tax, if only because of the "fairness" factor... plus I come from a large mass of white trash.

Being self-employed (by IRS definition) is a big mistake.  They add an extra "just because" amount to your taxes.  If I were to go contract again, I'd form a Delaware corp right off.  I don't really know if that would be better but it could hardly be worse, and given my personal beliefs about taxation it makes sense to form a corp anyway.

[Jacob0883]

Aw, come on, I love the 'let them eat cake' flat tax plans of libertarian economists!

1.  Flat tax plans, depending on the setup,  would be no more regressive then the current tax scheme.  See my calculations and analysis on page two and three of this thread:  http://forums.f13.net/index.php?topic=5004.35

2.  The US is already getting a flat tax plan.  Alternative Minimum Tax is slowly phasing in for an increasing number of taxpayers,  and will become a major issue in 10 years for most of the middle class.

This is probably too political for me to reply to, but I am pro-flat-tax, if only because of the "fairness" factor... plus I come from a large mass of white trash.

Being self-employed (by IRS definition) is a big mistake.  They add an extra "just because" amount to your taxes.  If I were to go contract again, I'd form a Delaware corp right off.  I don't really know if that would be better but it could hardly be worse, and given my personal beliefs about taxation it makes sense to form a corp anyway.

So you say it is fair to tax the already too poor to sustain themselves even more?  I don't get it.

[HaemishM]

Being self-employed (by IRS definition) is a big mistake.  They add an extra "just because" amount to your taxes.  If I were to go contract again, I'd form a Delaware corp right off.  I don't really know if that would be better but it could hardly be worse, and given my personal beliefs about taxation it makes sense to form a corp anyway.

What would that benefit us? Serious question, I really just don't know.

[Johny Cee]

So you say it is fair to tax the already too poor to sustain themselves even more?  I don't get it.

Did you read the link you quoted?  You know,  mathematical proof that a fair tax regime would be no more regressive then the current tax scheme (depending on setup)?

[Johny Cee]

Being self-employed (by IRS definition) is a big mistake.  They add an extra "just because" amount to your taxes.  If I were to go contract again, I'd form a Delaware corp right off.  I don't really know if that would be better but it could hardly be worse, and given my personal beliefs about taxation it makes sense to form a corp anyway.

What would that benefit us? Serious question, I really just don't know.

Hmm....  if folks are interested,  I'll post some general info on self-employment, Fica/Med burdens, and tax organization/planning for personal/small business once I get home from the office.

[Jacob0883]

I read it, but there is a lot more to it than just some numbers.  Margalis explained it all.  It just wouldn't work in America because too many people want too many different things to not be taxed.

Edit:  My bad about the name.

[Johny Cee]

The reason is that self-employed people, even freelancers, are considered the exact same as businesses, despite having about 1% of the advantages and not being able to buy fucking health insurance for any sort of reasonable sum.

On a non-tax related note related to being self-employed, my wife and I recently made a property purchase.  It was made slightly more difficult because even though my wife owns & runs a business employing 30-odd people full & part time, the mortgage companies view her as being "self-employed" and therefore somehow more of a risk.  I questioned the semantics of "owner/CEO" vs "self-employed" and just got blank stares.

On the other hand, since I work for her occasionally and I'm not directly named on the ownership papers (never mind that under Idaho law I'm actually jointly vested in her 51% of the company) I could claim employee status, and would not have the same issue if I were to apply under that basis.

My head, she spins...

This was explained by the banker poorly.

The major problem for a loan to the controler/owner of a business when the majority is owned/controlled by a single or small group of individuals is risk.  The owner/operator can assume a note or loan on a business and funnel the money directly to themselves as a "debt financed distribution".  If the business is set up as an LLC or S-Corp, this can be done directly.  As a C-Corp, as a loan to shareholder.  These business organizations are set up to offer limited liability to the owners of stock.

Basically, withdraw the funds,  fold up the business, leave the bank holding the bag on a worthless loan to a defunct entity, the shareholder/owner is in the clear.  This is why most banks require large loans to small businesses to be secured by the shareholder/owner directly,  or collateralized by valuable property.

Also,  large loans to shareholder or continuing debit balances in capital accounts are big red flags.

[Johny Cee]

Business organization 101:

If you're operating your own business, small scale, there are a couple of good options:

- Limited Liability Companies (LLC,  recognized in many but not all states)

Basically,  you file a regular Schedule C if a sole proprietorship or a partnership return if more than one member.  You report all income from the LLC as "self-employment income" subject to SE.  The LLC provides the same liability protection as a Corporation, though. 

No double taxation. Money can be taken directly from the business as draws.

Many times the way to go for small business.

- S-Corporation

A corporation that filed an S election.  Basically, an S-corporation works the same as an LLC.  Limited liability,  can take money out as distributions without being taxed, etc.  At high income levels,  it is taxed on it's net income.  Not a concern for small businesses,  since they usually don't hit the limitation.

If you take a reasonable salary,  you can get away with not claiming the additional net income from the S-Corp as self-employment income. 

Example:  Your business makes a profit of $80,000 a year.  Take a salary of $40k,  which is Fica/Medicare taxed and an expense.  The remaining amount (around $40k, less employer portion of Fica/Med) you can flow through as income on investment or somesuch and not claim it as self-employment.  Dodges SE tax.

If you don't take a salary,  all of it is going to be SE taxable just like a LLC.

- C-Corps are not recommended for small businesses.  The only way to get money out of them is to either:  pay yourself a salary,  or pay a dividend.  In the dividend case, you're getting taxed twice.  In the salary case,  you fluctuate your salary too much and the IRS is going to come down on for evading paying the dividend penalties.

Also,  any losses stay in the C-Corp.  In the case of the LLC or S-Corp,  any business losses flow through to your personal income tax return to offset individual taxes.

C-Corps have huge problems in getting assets out, as well.  Never, never, never put real estate/buildings in a C-corp, if you can help it.  Fucking impossible to get them out without getting yourself taxed on it.

It pretty much doesn't matter at this point where you incorporate, either.  Delaware used to be the standby since they were so lenient on filings/minimum taxes,  but most states are pretty similar.  You get taxed in a state if you have nexus there (business location, essentially) to the extent that you do business in the state. 

Cept for some states that are trying to push gross receipts taxes.

-Professional Corporation (PC)

Basically, a C-Corp.  It's designated as an org for professionals (attorneys, doctors, CPAs, etc.).  The major differences are all income taxed at one high rate (35%),  a higher limitation on using the cash method of accounting (10 million vs 5 million), and the IRS will let you get away with conforming shareholder/officer salaries to net Corporate income.
________________________________

Seriously though,  if you're running a substantial business through a Schedule C,  consider meeting with a tax professional to do some tax planning.  At the very least,  they can set you up a decent business org for your purposes,  and probably a SEP/Simple IRA that really shine for sole proprietorships.

[Polysorbate80]

And that all makes sense, except the purchase in question was personally financed and not done through the company..so although the company will actually be leasing the real estate from us for its use, we (and not the corporation) are the title holders and are financially responsible for the mortgage.

I think perhaps they weren't clear on what was going on, and it may have been the case that they were thinking what you described.  Regardless, we cleared the financing on the basis of using the property as a rental so it's all good, just confusing :)

[Margalis]

I read it, but there is a lot more to it than just some numbers.  Margulas explained it all.  It just wouldn't work in America because too many people want too many different things to not be taxed.

Am I Margulas?

It's quite possible for a flat tax to work, especially since different people mean "flat tax" in totally different ways.

What is 100% clear is that "everyone in the US pays X%" would NEVER EVER work for a large variety of reasons - it's stupid in about 10 different ways. Unfortunately this is what the most outspoken of "flat tax" proponents are proponents of.

The basics of our tax system today, varying rates based on income, is great. The problem is all the crap on top of that basic idea. I don't take any deductions or do anything special on my taxes, they take me literally 20 minutes to complete. I make X amount of money so I pay Y%.

[Strazos]

Zomg, I hate taxes.

[WayAbvPar]

Just finished my return last night. I have an extra $50 a week taken out on top of claiming 0, while my wife also claims 0. We got a grand total of $79 back. The IRS punishes people who report gambling winnings accurately- it is total and complete bullshit. I have to total every winning session and claim that as income, and then they 'generously' allow me to deduct losses up to the amount of winnings.

No wonder so many people omit that kind of stuff from their returns.

[Nazrat]

And that all makes sense, except the purchase in question was personally financed and not done through the company..so although the company will actually be leasing the real estate from us for its use, we (and not the corporation) are the title holders and are financially responsible for the mortgage.

I think perhaps they weren't clear on what was going on, and it may have been the case that they were thinking what you described.  Regardless, we cleared the financing on the basis of using the property as a rental so it's all good, just confusing :)

Having formerly practiced law in this area, my general advice is to have a separate holding company for the property with insurance coverage for slip and falls.  Lease the property to the operating company for a high "fair market" rental rate.  The operating company gets to deduct the high expense caused by the greedy landowner.  This reduces the operating company's overall tax hit.  The operating company should be an LLC/S Corp as outlined above and pass on the tax savings to the shareholders.  The holding company uses the rental income to pay property taxes and umbrella insurance coverage.  The holding company depreciates the property to reduce the taxable income also.  The holding company, also  an LLC/S Corp, then pass through the income to the shareholders of that entity.  The shareholders of all of the various entities, usually the same group of people, then get multiple sources of income with the lowest taxes possible on their personal income tax return.  They then apply all of the individual deductions and credits to lower the individual tax rate.

The bill is in the mail.   

[bhodi]

You are awesome, Naz. Slimy, but awesome.

[Sky]

I'm a crazy flat-taxer libertarian. I don't feel it punishes people who make a lot more money nearly as much as the current system punishes those who don't. Hell, I'd make anything under $20k/household untaxeable, at the least. Try living on that, especially with kids. Try living on minimum wage.

Taxing the hell out of the rich means they might not be able to afford the second HMMV or house on the other coast. Taxing the hell out of the poor means the kids don't get presents and they eat ramen. That's fucked up imo.

Oh, and no tax breaks for non-wage incomes, all money made on transactions, interest, etc, is taxed out the wazoo. But I won't get into my more socialist stuff like no profiteering on basics like food and shelter...

[Jacob0883]

I read it, but there is a lot more to it than just some numbers.  Margulas explained it all.  It just wouldn't work in America because too many people want too many different things to not be taxed.

Am I Margulas?

It's quite possible for a flat tax to work, especially since different people mean "flat tax" in totally different ways.

What is 100% clear is that "everyone in the US pays X%" would NEVER EVER work for a large variety of reasons - it's stupid in about 10 different ways. Unfortunately this is what the most outspoken of "flat tax" proponents are proponents of.

The basics of our tax system today, varying rates based on income, is great. The problem is all the crap on top of that basic idea. I don't take any deductions or do anything special on my taxes, they take me literally 20 minutes to complete. I make X amount of money so I pay Y%.

A flat tax that was implemented would soon turn into a mess of deductions because new technology, earth saving techniques, retirement plans, etc... would arrive.  Basically, a flat tax would turn into a mess of crap just like the current code is.  The only difference would be you wouldn't go look at a table at the end.  If the table part is what is really messing people up, then HELL YEAH FLAT TAX.

You also mentioned the fact that congress needs to pass law to feel good inside.  Basically, flat tax or progressive, there will be a mess of deductions no matter what.  Good news is the death tax is phasing out, so if you have rich parents you don't like help them out a little.....  just kidding.

[Yegolev]

So you say it is fair to tax the already too poor to sustain themselves even more?  I don't get it.

I don't expect you to, and that is why I don't post my political views.  Nothing was ever gained from a political discussion, especially one that I participate in.  Let's just say that I agree with you that the deductions are the problem.  I have been both poor and middle-class (what is the current definition of "rich" and "poor" anyway?), so I do have some practical experience with my viewpoint.

A mathematical discussion, I can do that.  I think this was already covered, though.  A mathematical or financial reason for a flat tax - any sort where you pay a fixed percentage, no exceptions or deductions - that I have been thinking about lately is that you don't give the IRS money that you could be using yourself.  Rather than withholding some amount more than what you will end up owing, you should know how much you are supposed to pay up front and ideally you would have more money since you wouldn't have to wait until sometime next year to see it.  If you are supposed to pay 15%, you have 15% withheld and that is that.  The extra bit that you used to withhold and get back much later is yours to use as you see fit: you can either invest it, put it in a savings account, or spend it on hookers.  The point is that letting the government use your money for months, interest free, is retarded no matter how you slice it.  I guarantee that they are making more money with it, and you sure as fuck aren't getting any of it.

[Johny Cee]

And that all makes sense, except the purchase in question was personally financed and not done through the company..so although the company will actually be leasing the real estate from us for its use, we (and not the corporation) are the title holders and are financially responsible for the mortgage.

I think perhaps they weren't clear on what was going on, and it may have been the case that they were thinking what you described.  Regardless, we cleared the financing on the basis of using the property as a rental so it's all good, just confusing :)

Having formerly practiced law in this area, my general advice is to have a separate holding company for the property with insurance coverage for slip and falls.  Lease the property to the operating company for a high "fair market" rental rate.  The operating company gets to deduct the high expense caused by the greedy landowner.  This reduces the operating company's overall tax hit.  The operating company should be an LLC/S Corp as outlined above and pass on the tax savings to the shareholders.  The holding company uses the rental income to pay property taxes and umbrella insurance coverage.  The holding company depreciates the property to reduce the taxable income also.  The holding company, also  an LLC/S Corp, then pass through the income to the shareholders of that entity.  The shareholders of all of the various entities, usually the same group of people, then get multiple sources of income with the lowest taxes possible on their personal income tax return.  They then apply all of the individual deductions and credits to lower the individual tax rate.

The bill is in the mail.   

Heh...  not bad,  and pretty standard operating procedure.  It helps spread the liability around, such that you won't be hung out to dry if one of the orgs runs into legal issues (lawsuit, Workers Comp problem,  income or sales tax issue, etc).

Problems:

When you are lessor and lessee,  and the lessee is your business, you can't dodge out of paying SE Tax by funneling from your self-employed business to your rental company as rental income.  Maybe you can get away with a reasonable income from your rental entity,  but too much and you'll get slapped by the IRS.

Since all the various sources of income flow through to page 2 of the Sch. E,  the total income from all the operations should remain largely the same.  It will all flow through to the same box on the front of your 1040,  and shouldn't affect what tax rate you're in.

[Abagadro]

Well. Just did my personal taxes. You know it is bad when you don't want to do themto the point that you procrastinate by cleaning out your gutters (which is what I did this afternoon).

Wasn't as bad as I thought it would be thanks to a combination of a large charitable deduction and not making any money this year. 

If I wasn't self-employed I wouldn't have paid any taxes this year at all.  Fucking FICA.

Ah well. Time to sit back and wait for the audit.

[Samwise]

I'd just like to know what sadist designed the Alternative Minimum Tax worksheet.  That thing was more complex than the entire 1040EZ, and all it told me at the end was that it didn't apply to me at all.  /sadf

[Nazrat]

Heh...  not bad,  and pretty standard operating procedure.  It helps spread the liability around, such that you won't be hung out to dry if one of the orgs runs into legal issues (lawsuit, Workers Comp problem,  income or sales tax issue, etc).

Problems:

When you are lessor and lessee,  and the lessee is your business, you can't dodge out of paying SE Tax by funneling from your self-employed business to your rental company as rental income.  Maybe you can get away with a reasonable income from your rental entity,  but too much and you'll get slapped by the IRS.

Since all the various sources of income flow through to page 2 of the Sch. E,  the total income from all the operations should remain largely the same.  It will all flow through to the same box on the front of your 1040,  and shouldn't affect what tax rate you're in.

No, it is definitely not to avoid self employment tax.  However, if you add a few more individual shareholders in each entity with stock purchase agreements and maybe an LLC where the general partner is another entity created exclusively for that purpose, you can usually add enough complexity to the issue that, eventually, when the holding company owns more than one piece of property for example, the self employment tax becomes a non issue.

Remember, if the operating company is having trouble initially in paying its bills, there is nothing wrong with the holding company agreeing to forbear collection of rental income until the operating company is flush.  No documentation should be required to perform this transaction as long as the corporate formalities are observed. 

Nothing in that list was revolutionary.  You and I have seen much more complex organizational structures in practice.  It was more for the non-lawyers and non-CPA's to see that you might actually need to pay for some expert advice as some of the experts are actually worth way more than you pay them.  All of this presumes that you hire both an attorney and a CPA.  Any entity that is planning for actual success over the long term needs to refer to competent professionals and not to Tax for Dummies or Corporations for Dummies. 

I have done my own taxes ever since my father in law's trust fund was fully distributed about 10 years ago.  My personal situation is fairly simple.  When you add complexity, add an expert before hand. 

[shiznitz]

I'd just like to know what sadist designed the Alternative Minimum Tax worksheet.  That thing was more complex than the entire 1040EZ, and all it told me at the end was that it didn't apply to me at all.  /sadf

We got slammed by the AMT last year. This year we escaped it largely because we paid down our mortgage aggressively in early 2005 so our mortgage deduction was much lower. Regardless, we owed more than last year even though gross income (not AGI) was largely unchanged.