My Story Reports Example

The second case is about a single mom, Sarah. She is an independent woman who works as a house-cleaner for a living. Sarah has a 16-years old son who lives with her. She has provided more than half of the cost to keep up her home. Therefore, I chose the head of household for her. Since she gets her salary in cash, Sarah did not have any withheld base on her income. Tax Wise generated a SCHEDULE C-EZ (Net Profit from Business) and SCHEDULE SE (Self-Employment Tax) and charged her about $800 of self-employment tax. This was where all the argument started. She could not understand why she needed to pay such a huge tax amount. According to her, she was working for herself and should not have to pay this tax. I had to explain that working for oneself is considered self-employment. It is the same thing but with a different name. She did not believe me and claimed she has never been charged for such tax before. She also showed me the tax return from previous years. Finally, the site manager came and started explaining to her that normal wage workers have Social Security and Medicare Tax that withheld each year. He also told her that self-employment tax is similar to Social Security and Medicare but combined as one. The site manager could not identify why she was not charged this tax in the past after looking at her return as there was not a clear note. Thus, we tried to increase her return amount by adding her business expense. However, it did not work. She was still mad at us, took all her belongings, and left. If seen from the perspective of the taxpayers, all they are concerned about is the amount of refund they get back. They think: “Well, since I did not get caught in the first place, they would not catch me in the future”. On the other hand, the tax-collectors have a different perspective. We use our understanding of the tax law to prepare the most correct tax return for our clients, whether they like it or not.