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Help with Taxes - Accidental Avoidance?
So I haven t had a job or car yet, however I have rented. I hear stories about everyone who haven t paid taxes in years. How? Do you not get taxed automatically every time you buy something? What do they mean and how does this work?
If you can shed light on this topic to help me avoid this problem in case it arises that would be great, thank you.
I HOPE I m paying my taxes.
- StephenWeinsteinLv 73 years agoFavorite Answer
There are many small children who haven't bought anything in years (or ever), so they haven't paid any taxes. That probably wasn't what you meant.
Assuming that you are talking about adults, they have paid the taxes that occur when you buy things, which are called sales tax in the U.S. and VAT in most other countries.
What they mean when they say that they haven't paid taxes in years is that they haven't paid income taxes, which are not paid when you buy something. They can be paid in various ways, but most commonly withheld from your pay at a job. If you have never had a job, then you probably don't have to pay these taxes.
- Anonymous3 years ago
Every year, between the months of January and April, it is considered "tax season".
Your employer sends you a W-2 form that shows how much you have earned for the year and how much was taken out in income taxes. Employers are required to send this form to you by the end of January.
If you don't work for an employer that provides a W-2, then you might get a 1099 form. All 1099 forms of income have forms that are sent to you by the end of January also. Other sources of 1099 income would include interest earned from savings accounts or money earned from the sale of stock. These are other things that might require you to pay income taxes.
If you are self employed, then you are responsible to keep track of money you earn and expenses you have in order to report your own income taxes. Anything that you do that creates a source of incoming money for you would be considered "self employment". So, if you buy things cheap and re-sell them for more money, that is a source of income and if you earn more than $400 doing anything that falls under a 1099 form or can be classified as self employment, then you are required to file income tax forms.
Now, whatever your source of income, you need to take all the forms that show how much money you have made during the previous year and use that information to fill out state and federal income tax forms. The federal forms goes to the IRS and the state form goes to your own state' revenue office. They can be mailed or electronically filed. By filling out the income tax forms, you prove that you have paid enough taxes. In some cases, you might have paid too much and would get a tax refund. In some cases, you might not have paid enough and would owe more taxes.
People who "avoid" taxes are either not reporting all their income or not reporting income at all. Tax avoidance only applies to income taxes because most other taxes are taken at the time of a sale. (sales taxes.)
If you have never had a job or earned money from any source, then you have never had a reason to pay this kind of tax yet. Money that is given to you as a gift by family members doesn't count as taxable income unless it is a very large amount from one source. If you have only earned small amounts of cash from random odd jobs, then it is unlikely that the IRS would ever notice those small amounts.
This was a very simplified explanation. There is a little more to it when you actually have a reason to file income taxes. But, again, if you have never had a job or earned money, then you have probably not had a reason to pay income taxes. If you know that no one has ever sent you a 1099 or a W-2 form for income that you earned, then you do not currently owe any back taxes. Past income you might have made as strictly cash transactions are not likely to be caught in the future. It would most likely be too small for the IRS to notice.
However, the people who get caught for tax avoidance are the ones that support themselves with no obvious means of income. If you are renting an apartment and paying bills but never reporting income taxes, then the IRS would start trying to find out how you earn your money.
If you know that you have had income you should have filed on, you can file previous years taxes at any time. It is better to file if you think you have something substantial instead of waiting for the IRS to catch it. Each year stands alone, so you can't combine several years into one filing. You would do separate forms for each year that you need to file on.
- GregLv 73 years ago
They mean they have not paid (filed) their income tax.
- curtisports2Lv 73 years ago
There's sales tax when you buy something that's taxable. Then there's income tax. Two completely separate things.
You are required to file a tax return and report ALL sources of income, if your total income exceeds a a certain amount, which depends on your filing status, which no one here can know without more information from you. If you don't earn over those limits, you don't have to file a tax return, and you don't owe income tax, but if any income tax was taken out of your pay during the year, you do have to file to claim a refund.
There are people who haven't filed in years, because they haven't had to. And there are people who haven't filed in years who the IRS hasn't caught up to yet.
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- OldladyLv 73 years ago
They are talking about federal and state income tax. Some people feel they don't have to, which is nonsense. They simply don't file. Money is withheld from a paycheck, but they could owe more. If you are working under the table the income is not reported, likewise for the self employed. They can be hard to catch. ALthough people are stupid and spend way above their means and then the IRS gets a clue and goes after them.
It certainly isn't an accident.