Working poor? How about Self-Employed poor?

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jcheese
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2014/01/11 18:19:01 (permalink)

Working poor? How about Self-Employed poor?

At least workers get minimum wage, such as it is. S/E's can sometimes make zero, or even lose money any given day. Funny ya never hear much about this.
#1

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    porkbeaks
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 20:08:07 (permalink)
    If the word gets out, I suppose we'll have to start tipping them too.
    post edited by porkbeaks - 2014/01/11 20:15:54
    #2
    Michael Hoffman
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 20:14:16 (permalink)
    So, should I put a tip jar on my desk?
    #3
    porkbeaks
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 20:18:17 (permalink)
    There are a lot of folks who, if they see a tip jar, feel compelled to stuff a couple bucks in it. What the hell....give it a shot, Michael.
    #4
    Michael Hoffman
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 21:06:09 (permalink)
    I think I will. I don't know if I'll end up with lots of tip money to declare, though, considering what a tightwad lleechef is, and the fact that she's just about the only one who ever comes into my office.
    #5
    porkbeaks
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 21:12:04 (permalink)
    How about a tip bucket nailed to the podium at speaking engagements?
    #6
    Michael Hoffman
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 21:16:22 (permalink)
    You know, the best I get from those is food. Unfortunately, half the time it's Salisbury steak, and I can't eat that because it always comes with mushrooms in the gravy.
    #7
    lleechef
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    Re:Working poor? How about Self-Employed poor? 2014/01/11 22:49:52 (permalink)
    Michael Hoffman

    I think I will. I don't know if I'll end up with lots of tip money to declare, though, considering what a tightwad lleechef is, and the fact that she's just about the only one who ever comes into my office.

    The cats go in there, but I make sure they surrender their spare change to me in the hallway.

    #8
    porkbeaks
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    Re:Working poor? How about Self-Employed poor? 2014/01/12 10:13:23 (permalink)
    A "Michael Hoffman Office Tours - $10.00" sign on the front lawn might get some folks in there.
    #9
    lleechef
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    Re:Working poor? How about Self-Employed poor? 2014/01/12 11:09:39 (permalink)
    porkbeaks

    A "Michael Hoffman Office Tours - $10.00" sign on the front lawn might get some folks in there.

    You've never seen his office.  He would have to pay them $10.00 to take a peek!!  " />

    #10
    porkbeaks
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    Re:Working poor? How about Self-Employed poor? 2014/01/12 11:28:43 (permalink)
    Part of his charm, I'm sure.
    #11
    bartl
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    Re:Working poor? How about Self-Employed poor? 2014/01/13 20:31:15 (permalink)
    Also, self-employed people pay 15.3% of their net income in SSI and Medicare taxes. I discovered that one year when my net income was $10,000 and I had to give (at the time) $1200+ of that to the government. So much for "not paying income taxes".
     
    Bart
    #12
    Bonk
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 01:21:31 (permalink)
    I've been S/E most of my adult life, and the taxes suck.
     
    What really sucks is I do my taxes legally and don't gouge deductions but I know people who do and haven't been audited.
     
    One guy I used to work with about 10 years ago was bragging that he paid $200 in federal taxes and he made over $40K.
    post edited by Bonk - 2014/01/14 01:27:27
    #13
    tmiles
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 10:32:14 (permalink)
    Lots of SE pay low taxes, because they make little. The 60ish owner of a local c store, in a not very good location put it on the market. He said he could make more working at min wage. My advice to him was to get that min wage job first, because it may not be easy. When I stopped in a week or so later the "For Sale" sign was down.
     
    Granted, he is not personable, shaves once a week, speaks with an accent, and doesn't stay open for the number of hours that he should, but everyone needs to make a living. For him (and a lot of other SE), it is sub min, or nothing.
    #14
    felix4067
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 12:39:53 (permalink)
    bartl

    Also, self-employed people pay 15.3% of their net income in SSI and Medicare taxes. I discovered that one year when my net income was $10,000 and I had to give (at the time) $1200+ of that to the government. So much for "not paying income taxes".

    Bart

    I'm confused...who thought if you were self-employed you didn't have to pay income taxes? If you earn money, regardless of how you earn it, over a certain amount, you have to pay tax on it. And of course SSI and Medicare, if you're doing it legally. You should also have insurance to cover workers' comp in case of injury, although you're not required to pay unemployment insurance. Basically, a self-employed person has to pay the same taxes a person working for someone else has to pay...at least above a certain amount of income. I believe $10,000 is the maximum you can make without having to file a tax return, and that applies whether you're self-employed or work for someone else. Of course, if you're self-employed you probably haven't deducted taxes right along (although if you're smart you'll do that quarterly so as to not get hit with a bill all at once), so filing for a refund probably isn't something you'd care about, where if you work for someone else who took taxes out of every check you'll want to in order to get that money back.
     
    You said your net income was $10,000...that's not what your taxes are figured on. Your taxes are figured on your adjusted gross income.
    post edited by felix4067 - 2014/01/14 12:41:19
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    kozel
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 15:08:23 (permalink)
    felix4067
    I'm confused... Basically, a self-employed person has to pay the same taxes a person working for someone else has to pay...at least above a certain amount of income.

    Not entirely true.  An employee pays only half of the FICA contribution and the employer pays the other part.  Self employed people pay both.  There are other inequities as well.  Talking pre Obamacare, I as a SE person cannot get group rates on healthcare by joining an association.  We are forced into the individual market and that market is expensive, now more so. I lost my coverage and was forced into the exchanges but now we have perils covered we don't need  and the coverage is catastrophic only.  We also get no paid vacation, sick days or personal days. If your business requires a license, well consider that a tax as well. 
     
    All in all, I'd rather be self employed (12 years as an employee w/ 4 companies and now 30 years self employed), but Jcheese makes a valid point.  As a self employed person there are no guarantees and no 99 weeks of unemployment insurance.  But if you have that minimum wage job you can lobby and go on strike to try to raise it to $15/hr. It would be interesting to see what happens if they get it. Ever hear of unintended consequences?
     
    #16
    felix4067
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 16:31:00 (permalink)
    kozel

    felix4067
    I'm confused... Basically, a self-employed person has to pay the same taxes a person working for someone else has to pay...at least above a certain amount of income.

    Not entirely true.  An employee pays only half of the FICA contribution and the employer pays the other part.  Self employed people pay both.  There are other inequities as well.  Talking pre Obamacare, I as a SE person cannot get group rates on healthcare by joining an association.  We are forced into the individual market and that market is expensive, now more so. I lost my coverage and was forced into the exchanges but now we have perils covered we don't need  and the coverage is catastrophic only.  We also get no paid vacation, sick days or personal days. If your business requires a license, well consider that a tax as well. 

    All in all, I'd rather be self employed (12 years as an employee w/ 4 companies and now 30 years self employed), but Jcheese makes a valid point.  As a self employed person there are no guarantees and no 99 weeks of unemployment insurance.  But if you have that minimum wage job you can lobby and go on strike to try to raise it to $15/hr. It would be interesting to see what happens if they get it. Ever hear of unintended consequences?


    Which is why I said "basically". I am not well-versed in the art of self-employment, as I have never done it. I was addressing that self-employed people do, in fact, have to pay taxes as opposed to bartl's statement to the contrary. Thanks for the information, though! If I ever have to rely solely on the income I make through other means than my primary career (which will happen eventually as I get too old to do the physical work any more), I'll need to know!
     
    I have to ask though...99 weeks of unemployment? Where?? I want to live there! Here in Michigan you get 24 weeks, no extensions.  And you have to prove you're actively seeking work the entire time, or you're disqualified. They've even done away with the exception for those who work through union hiring halls (we used to get 90 days without having to file a resume with the state talent bank, now we have to file immediately or we are disqualified).
    post edited by felix4067 - 2014/01/14 16:34:01
    #17
    kozel
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 17:09:36 (permalink)
    felix4067

    kozel

    felix4067
    I'm confused... Basically, a self-employed person has to pay the same taxes a person working for someone else has to pay...at least above a certain amount of income.

    Not entirely true.  An employee pays only half of the FICA contribution and the employer pays the other part.  Self employed people pay both.  There are other inequities as well.  Talking pre Obamacare, I as a SE person cannot get group rates on healthcare by joining an association.  We are forced into the individual market and that market is expensive, now more so. I lost my coverage and was forced into the exchanges but now we have perils covered we don't need  and the coverage is catastrophic only.  We also get no paid vacation, sick days or personal days. If your business requires a license, well consider that a tax as well. 

    All in all, I'd rather be self employed (12 years as an employee w/ 4 companies and now 30 years self employed), but Jcheese makes a valid point.  As a self employed person there are no guarantees and no 99 weeks of unemployment insurance.  But if you have that minimum wage job you can lobby and go on strike to try to raise it to $15/hr. It would be interesting to see what happens if they get it. Ever hear of unintended consequences?


    Which is why I said "basically". I am not well-versed in the art of self-employment, as I have never done it. I was addressing that self-employed people do, in fact, have to pay taxes as opposed to bartl's statement to the contrary. Thanks for the information, though! If I ever have to rely solely on the income I make through other means than my primary career (which will happen eventually as I get too old to do the physical work any more), I'll need to know!

    I have to ask though...99 weeks of unemployment? Where?? I want to live there! Here in Michigan you get 24 weeks, no extensions.  And you have to prove you're actively seeking work the entire time, or you're disqualified. They've even done away with the exception for those who work through union hiring halls (we used to get 90 days without having to file a resume with the state talent bank, now we have to file immediately or we are disqualified).

    Maybe it works in Chicago. At one time I was a partner in a sub-chapter S corp were we HAD to pay unemployment taxes.  The corporation dissolved and I was basically unemployed.  I tried to collect but when asked if I still 'worked', I said no but I do meet my ex-partner to resolve issues caused by stopping a business.  Even though there was no salary, I was told that I was still 'employed' so I could receive no benefits. I understand why some government agencies interact with the public from behind VERY THICK glass.
     
    http://en.wikipedia.org/wiki/99ers
    #18
    tmiles
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 17:15:43 (permalink)
    I thought that the 99 weeks of unemployment just expired.........but on the news today it looks like a 3 month extension is in the works. I think that most states have opted in. If you are a long term unemployed in the "wrong" state, I don't know if you can move to get coverage.
     
    I'm sure that there are folks gaming the system, but my gut feeling is that most unemployed would prefer to be working. That is why so many unemployed (especially former middle mgmt.) gravitate to SE. Unfortunatly you can't "collect" while you get the new biz up and running......something that I would like to see happen.........ditto for back to school. 
    #19
    felix4067
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 17:25:27 (permalink)
    Ahh...that explains it. Outdated information. The majority of the extensions that used to exist were done away with a couple of years ago, but those already on unemployment were grandfathered in...the so-called 99ers. Anyone who filed after the extensions were ended didn't get them. I filed while I was off work from November 2011 through March 2012, and got only 24 weeks. And then I had to wait a calendar year from the time I filed in order to be eligible again (which wasn't an issue, as I was back to work). Currently I'm "living" on workers' comp because I'm off due to an injury at work, so unemployment is not a factor (although it would be WAY more money!).
    #20
    kozel
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 18:44:19 (permalink)
    Another option is that 35 states pay welfare recipients better than if they had a minimum wage job.  Michigan is one of them.
     
    http://news.msn.com/us/go...-wage-job-in-35-states
    #21
    MetroplexJim
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    Re:Working poor? How about Self-Employed poor? 2014/01/14 19:22:33 (permalink)
    Through my career in starting, owning, and running small businesses the title on my business cards was always "Residual Claimant". 
     
    The employees, suppliers, landlords, accounting and legal professionals, health and property/liability insurance companies, utilities, Yellow Pages, leasing companies, banks, and the local, state, and federal "tax men" all had contractural claims on the cash flow of the businesses.  After all were pain timely and in full, I "claimed" what was left: the residual
     
    On the first of every month I never knew what the residual would be or, espeicially in the early years, whether it would be positive or negative. 
     
    In my teaching and landlording "retirement" I do seek out the owner of every small business I patronize to give them heartfelt thanks for providing goods and services which I voluntarily buy, for creating jobs and opportunities for their employees, and for supporting the State through taxation. 
    #22
    kozel
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    Re:Working poor? How about Self-Employed poor? 2014/01/15 07:20:25 (permalink)
    Very well said Jim.  It sorta reminds me of a joke I like.....
     
    A man owned a small farm in Ireland .  The Irish Internal Revenue
    determined he was not paying proper wages to his staff and sent an
    investigator out to interview him.

    "I need a list of your employees and how much you pay them!,"
    demanded the investigator.

    "Well," replied the farmer, "there's my farm hand who's been with
    me for three years.  I pay him $200 a week plus free room and board.

    "The cook has been here for 18 months, and I pay her $150 per week
    plus free room and board."

    "Then there's the halfwit.   He works about 18 hours every day and
    does about 90% of all the work around here.  He makes about $10 a
    week.   He pays his own room and board, and I buy him a bottle of
    whiskey every Saturday night.  He also sleeps with my wife
    occasionally."

    "That's the guy I want to talk to...the halfwit!" said the agent.

    "That would be me," replied the farmer.
    #23
    felix4067
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    Re:Working poor? How about Self-Employed poor? 2014/01/15 12:24:39 (permalink)
    kozel

    Another option is that 35 states pay welfare recipients better than if they had a minimum wage job.  Michigan is one of them.

    http://news.msn.com/us/go...-wage-job-in-35-states

    When I'm working, I make more than double minimum wage (depending on my position on any given day, sometimes 3x more), but my hours are erratic. According to that chart, I make less than being on welfare over the year, but my hourly wage is far higher than what is listed there. Interesting.
     
    However, I have to wonder what all they consider "welfare". Because there are approximately ten different things that can be applied for. Food stamps, cash assistance, child care, medical, home & burial...I wonder if that number assumes a person is receiving all of them. Because my current hourly income from workers' comp (which is supposedly 80% of my weekly wage) comes to more than a dollar *less* than minimum wage. I applied for (and received) food stamps based on that amount, but since I'm getting an "unearned" income, I am not eligible for any other services. I also only qualify for $15 a month in food stamps (seriously...I'm getting too much money to get more), but it helps.
     
    Ack...I've kind of taken this completely off track, sorry! It's just interesting to me based on current circumstances, and since I've been essentially trapped in this recliner since December 5 and won't be getting out until at least February 13, I have entirely too much time to think about things. You'll have that.
    #24
    tmiles
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    Re:Working poor? How about Self-Employed poor? 2014/01/21 11:21:25 (permalink)
    As a small biz guy I am always shocked at what an existing, large, profitable business is worth. A little guy is lucky to get 7x NET, and big guys often get 2x GROSS.
     
    Today in WSJ I saw an ad for a family run business in remote Alaska. No real estate or sales tax (or services????). $900,000 in sales  with a 15% net,looks like it is a husband/wife operation. To buy this place, which looks to be a general store with fuel will cost you over a million, but it includes real estate.  $135k per year looks like a good SE gig if you can afford to buy in, but if you could afford the buy in, would you move to off the grid Alaska? I edited to correct a terrible math error.
    post edited by tmiles - 2014/01/22 08:49:16
    #25
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