Member-only story
I’ve Long Suspected Our Tax System Was Unfair
Now I’m even more convinced
My husband and I are both full-time freelancers, and have been for many years. We know how this works: we keep careful track of all our income and our business expenses, and we make quarterly tax payments so that the additional hit on April 15 isn’t so bad.
Because there always is an additional payment due on the “ides of April”…one never seems to estimate enough. But I always get pretty close.
Until last year, that is, when we got a terrible surprise at tax time. We had made so very little money, and still we owed thousands and thousands of dollars more. When I added up the quarterly estimates, the underpayments on our income tax and self-employment tax, and our having to pay back a portion of our health care premium tax credit, our liability for 2018 was nearly 20% of our total income for 2018.
Not our adjusted gross income — our total income.
It was, frankly, terrifying.
After I panicked for a while, and then arranged a payment plan with the IRS (which they oh-so-generously allow, though you still have to pay interest and penalties), and panicked some more as I tried to navigate the IRS’s opaque website and all the dunning letters they still mailed me for months and months after I’d begun…
