7 ms·

This is pretty common when someone has a lot of cash that is liable to capitol gains. If you sell the assets to the pat you can pay the taxes over time on the

This is pretty common when someone has a lot of cash that is liable to capitol gains. If you sell the assets to the pat you can pay the taxes over time on the money that is distributed instead of paying the capitol gains all at once and loosing that earning power. You do loose the money in that it you cant use it but you make more money in the long run because you spread the taxes out and make money on the potential tax liability up until it is distributed. edit: It is the same as not paying any taxes all year on your payroll and putting the money in the market to make the interest you can, and then paying the tax man in April. edit typo edit adding typos back in

gee_totes 14y ago
I think you mean 'capital', as in capitalism. Capitol is the building in which a legislature meets. eg: The Capitol Building.
- peeters 14y ago
  Which is extra confusing, because it's in the capital city.
  - mkr-hn 14y ago
    The capitol in the capital on capitol hill, down the parkway past the park. No, the park park, not the car park. English is a fun language. No opinion on the English though.
    - newbie12 14y ago
      Of course, Capitol is ancient Latin word.
      - mkr-hn 14y ago
        English isn't particular about its loanwords.
    - aidenn0 14y ago
      Sounds like we'll have a capital time!
  - Gormo 14y ago
    "Capital" comes from the Latin word for "head"; leading cities that have historically dominated their neighbors became known as capitals because they were the "heads" of their regions. "Capitol" comes from the name of the Capitoline hill, at the center of Rome.
FraaJad 14y ago
replace loose with lose. See: http://theoatmeal.com/comics/misspelling http://theoatmeal.com/comics/misspelling
- coderdude 14y ago
  Start your sentences with a capital letter. See: http://en.wikipedia.org/wiki/Letter_case http://en.wikipedia.org/wiki/Letter_case
  - mooli7dm 14y ago
    Getting meta, are we? See: http://en.wikipedia.org/wiki/Meta http://en.wikipedia.org/wiki/Meta
  - FraaJad 14y ago
    right. because starting with lowercase changes the meaning of what i wrote unlike loose <-> lose, which are totally, like, the same thing.
    - tylermenezes 14y ago
      It didn't change the meaning, because everyone understood what he said. The human mind is amazing at that. If you're going to be pedantic, fine, but own up to it.
      - SomeCallMeTim 14y ago
        Loose means something totally different than lose. Personally, I read each as their (real) meanings and when they don't make sense I have to go back and reread the sentence. Yes, I can figure it out, but it's no fun to have to work to read comments. May as well let commenters use 113t-speak if we don't care how hard the comment is to read.
    - grourk 14y ago
      Were you actually confused and thought he meant "loose"?
ibejoeb 14y ago
Careful. Taxes in the US are pay-as-you-go. You can't just "pay the tax man in April." Well, you can, but you also have to pay him the penalty for failing to pay throughout the year. See http://www.irs.gov/taxtopics/tc306.html http://www.irs.gov/taxtopics/tc306.html.
- techiferous 14y ago
  The "penalty", as I understand it, is neither a fine nor a record of wrongdoing, as paying at the end of the year is not illegal. The penalty is the IRS saying that it would like to have the interest back that it otherwise would have earned if you had paid earlier. As far as I understand, it's perfectly kosher to wait until the end of the year to make payments; you just have to make sure you have the money to actually pay then. Disclaimer: I am not an accountant nor do I have expertise on this matter.
  - ibejoeb 14y ago
    It's a little more complicated than that, and it is a penalty. You may also owe interest, and they are two separate things (and interest is statutory, so you're really not negotiating there). There are multiple penalties for underpayment and nonpayment of federal taxes. If you're an employee and not withholding enough (because you have other income or AMT for example), you should be making estimated payments to cover the difference. Your employer is also subject to penalties if it fails to withhold and pay the gov't employment taxes (social security and medicare), and it's usually 100%. If you are self-employed, you need to make estimated payments. tl;dr: the gov't has cashflow problems, too, and doesn't like to issue t-bonds to finance its receivables.
- nknight 14y ago
  There is an exception as mentioned there. If you pay an amount equal to 100% of the previous year's liability (110% if your AGI is over $150k), it doesn't matter how much more you owe in April. (I personally ended up with a 2011 tax liability that was something like 160% of my 2010 liability, but I'd paid estimated taxes equal to my 2010 liabilities. So I had to cut the IRS a pretty big check in April, but had no penalties.)
its_so_on 14y ago
I liked your comment but found it hard to read due to some typos. Imagine my surprise when the end reads... "edit typo edit adding typos back in" what happned here? :)

gee_totes 14y ago

I think you mean 'capital', as in capitalism. Capitol is the building in which a legislature meets. eg: The Capitol Building.

peeters 14y ago
Which is extra confusing, because it's in the capital city.
- mkr-hn 14y ago
  The capitol in the capital on capitol hill, down the parkway past the park. No, the park park, not the car park. English is a fun language. No opinion on the English though.
  - newbie12 14y ago
    Of course, Capitol is ancient Latin word.
    - mkr-hn 14y ago
      English isn't particular about its loanwords.
  - aidenn0 14y ago
    Sounds like we'll have a capital time!
- Gormo 14y ago
  "Capital" comes from the Latin word for "head"; leading cities that have historically dominated their neighbors became known as capitals because they were the "heads" of their regions. "Capitol" comes from the name of the Capitoline hill, at the center of Rome.

FraaJad 14y ago

replace loose with lose. See: http://theoatmeal.com/comics/misspelling http://theoatmeal.com/comics/misspelling

coderdude 14y ago
Start your sentences with a capital letter. See: http://en.wikipedia.org/wiki/Letter_case http://en.wikipedia.org/wiki/Letter_case
- mooli7dm 14y ago
  Getting meta, are we? See: http://en.wikipedia.org/wiki/Meta http://en.wikipedia.org/wiki/Meta
- FraaJad 14y ago
  right. because starting with lowercase changes the meaning of what i wrote unlike loose <-> lose, which are totally, like, the same thing.
  - tylermenezes 14y ago
    It didn't change the meaning, because everyone understood what he said. The human mind is amazing at that. If you're going to be pedantic, fine, but own up to it.
    - SomeCallMeTim 14y ago
      Loose means something totally different than lose. Personally, I read each as their (real) meanings and when they don't make sense I have to go back and reread the sentence. Yes, I can figure it out, but it's no fun to have to work to read comments. May as well let commenters use 113t-speak if we don't care how hard the comment is to read.
  - grourk 14y ago
    Were you actually confused and thought he meant "loose"?

ibejoeb 14y ago

Careful. Taxes in the US are pay-as-you-go. You can't just "pay the tax man in April." Well, you can, but you also have to pay him the penalty for failing to pay throughout the year. See http://www.irs.gov/taxtopics/tc306.html http://www.irs.gov/taxtopics/tc306.html.

techiferous 14y ago
The "penalty", as I understand it, is neither a fine nor a record of wrongdoing, as paying at the end of the year is not illegal. The penalty is the IRS saying that it would like to have the interest back that it otherwise would have earned if you had paid earlier. As far as I understand, it's perfectly kosher to wait until the end of the year to make payments; you just have to make sure you have the money to actually pay then. Disclaimer: I am not an accountant nor do I have expertise on this matter.
- ibejoeb 14y ago
  It's a little more complicated than that, and it is a penalty. You may also owe interest, and they are two separate things (and interest is statutory, so you're really not negotiating there). There are multiple penalties for underpayment and nonpayment of federal taxes. If you're an employee and not withholding enough (because you have other income or AMT for example), you should be making estimated payments to cover the difference. Your employer is also subject to penalties if it fails to withhold and pay the gov't employment taxes (social security and medicare), and it's usually 100%. If you are self-employed, you need to make estimated payments. tl;dr: the gov't has cashflow problems, too, and doesn't like to issue t-bonds to finance its receivables.
nknight 14y ago
There is an exception as mentioned there. If you pay an amount equal to 100% of the previous year's liability (110% if your AGI is over $150k), it doesn't matter how much more you owe in April. (I personally ended up with a 2011 tax liability that was something like 160% of my 2010 liability, but I'd paid estimated taxes equal to my 2010 liabilities. So I had to cut the IRS a pretty big check in April, but had no penalties.)

its_so_on 14y ago

I liked your comment but found it hard to read due to some typos. Imagine my surprise when the end reads... "edit typo edit adding typos back in" what happned here? :)