Various self-employed readers, familiar with filing taxes, continue to express skepticism that Geithner’s mistakes, with or without the use of TurboTax, are easy to make and overlook:
As a longtime freelance journalist, married to another longtime freelance journalist (please no name) I am astounded at several aspects of this Geithner story — first the notion that he simply screwed up (your CPA audience has addressed this), but also the fact that the IRS has not hounded him and come after him for penalties as they routinely and legally do with others who fail to pay. Also, the fact that the IMF pays a bonus to cover his taxes — I am not sure why that is not counted as income in the first place. Is there some special regulation covering those lucky enough to be working for certain entities? If one of my clients — and believe me most journalistic enterprises don’t — simply wrote me a check to cover my self-employment taxes it would be counted as income, pushing my taxes higher. I don’t think Washington understands the depth of anger about this among the self-employed, no matter what their personal politics!
[There was an amnesty for some taxpayers during a 2006 IRS settlement that probably would have covered Geithner. But that still leaves us wondering about the IRS’s response to him collecting a reimbursement for those taxes while at IMF; not correcting the errors made in 2001 and 2002 when he paid the back taxes for 2003 and 2004; using his child’s time at overnight camps to calculate deductions for dependent-care; taking deductions for ineligible donations to charity; failing to pay an early-withdrawal penalty for a retirement plan; and employing a housekeeper whose papers have expired.]
Another:
One other point I’d like to make about the self employment taxes. Let’s assume there is a glitch in the software or maybe it is easy to leave out the tax if you don’t know what you’re doing. That argument goes to pot quickly because on page 2 of the 1040 there is a separate section for other taxes where the very first line item reads “Self Employment Tax: Attach Schedule SE” so, since he signed IMF documents acknowledging that he understands his responsibility to pay the tax, wouldn’t it look odd if the line item for self employment tax was blank? I think that if this happened in only one year I might be inclined to dismiss this is a “boneheaded” move (hat tip to Obama’s land deal) but for 4 years straight? Why, I’d have to willfully suspend my disbelief.
Another example of the self-employed, whose response to Geithner is not quite, “oh, I’ve been there”:
I too am self-employed, but I use H&R Block software, and I have done other people’s taxes on a variety of software packages. Your responders have covered the 1099 aspect. But even if you get paid via W-2, and the employer doesn’t pay half of the self-employment, the software will ask you about your Social Security and Medicare payment (because that’s what self-employment tax is) deficiencies and direct you on paying the 7.7 percent or so that you owe for the part the employer didn’t pay. There just isn’t any way not to know that you didn’t pay your full share.
The Editors note, “no cabinet secretary is indispensable.” Will any Senate Democrats concur?






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