They still miss the “declare here the wages you stole”
But those are already taxed as ordinary income
It’s cool if you return it at the end of the year that you don’t have to pay taxes on it. You could steal something, use it to make more money, and then return it. This avoids paying any kinda sales taxes when you took it. And since inventory is taxed you wouldn’t have to pay on that.
Someone could exploit this. Make a fake company that steals from the real company, returns the property at the end of the year.
Technically, if you intend to return it eventually, it’s not theft.
Theft, under the common law of England, as brought to the U.S., is the deprivation of personal property of another with the intention to permanently deprive them of it. If you don’t have that intent, it’s not theft. That’s why we have “joyriding” and “grand theft auto” as separate things.
My first job was at a place called Cybo Robots in Indianapolis. The R&D department there created something that iRobot turned into the Roomba, when they bought the company. The entire point of the company was to lose money as a tax write off. The owner owned several other profitable companies, and needed a money sink so that he could get out of paying taxes, so he created Cybo Robots.
My point here is that not only could someone exploit this, they already are in multiple ways.
Nice try, FBI!
Would have gotten away with it to if it hadn’t been for you meddling kids
Sort of a Ponzi scheme before it comes crashing down.
Yeah, they say this shit but hide the addendum forms like five layers deep in a FAQ link tree. And don’t even get me started on the forms you need if you steal drugs. Like, holy shit. I hate to be a bureaucan’t, but somethings gotta change
Yeah, they got Al Capone for tax evasion, and they’ll get you for confessing to a crime on official government documents.
Line 8z is “all other types of income” it’s not specifically “income from crimes.”
It’s just a catch all for anything not covered in A through P. Like, gambling winnings or unreported cash tips. The IRS just wants their cut. They don’t actually care where the money comes from. An insurance payout might go on that line.
They’re already getting their cut from sales tax after an insurance payout. That ain’t income. Do I get to also declare a loss on anything lost, stolen, or depreciating in value?
Literally yes. In fact about half of the lines 8 are to report losses.
Income is any income, you pay a sales tax when you buy goods, the merchant pays income tax on those same dollars. Or they would if somehow during a record profit year they actually made no money.
No. Insurance payouts are not overall taxable. You also cannot claim depreciation on your personal vehicle, and if you lose property, the IRS doesn’t give a shit.
Certain insurance payouts, specifically those that exceed your premiums, are taxable. Lump sum payments generally aren’t unless it’s a benefit provided by your employer in excess of 50k, but annuities are taxable. As would be any interest you collect on those policies.
Depreciation on a vehicle you use to generate income is deductable, as would be say, depreciation on a home you rent out. And if you rent out rooms in your personal home but don’t run a business renting out property, that income needs to be reported too.
This discussion has only been about personal taxes, so stop bringing up business taxation.
Are you talking solely about life insurance? Because that is one very specific thing, and payouts from that are not in the same category at all as any other typical insurance.
Which is why there’s a line for other undeclared income.
The whole conversation is about line 8 not exclusively being for crimes.
It sounds odd but there was a Supreme Court about it. Essentially someone claimed they shouldn’t have to pay taxes on the profits of crime and the Court ruled they did. So they had to create a way for people to do that. For what it is worth, the 5th amendment protects you from incriminating yourself, so you are allowed to decline to provide the details of where the money came from, but it’s a bit like paying your parents for something you broke and then just not telling them what it is, and then expecting them not to look around the house.
“it would be an extreme if not an extravagant application of the Fifth Amendment to say that it authorized a man to refuse to state the amount of his income because it had been made in crime. … He could not draw a conjurer’s circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law.” … "It is urged, that, if a return were made, the defendant [Sullivan] would be entitled to deduct illegal expenses, such as bribery. This by no means follows, but it will be time enough to consider the question when a taxpayer has the temerity to raise it.”
Just be rich and pay nothing instead
So, if you declare that money it is already clean?
If I declare 100m of selling coke, and pay 60m in taxs, the remaining 40m are clean?
Hobbies are tough to take deductions on. They want you to form an official business to take all the deductions. Report that income though, garage sales, Facebook market and the like as well.
Europeans: You guys have to file your own taxes?
Yes, but it is different. I’m employed, so my employer pays taxes, social security, pension fund money, and health insurance into the proper channels, and I get an “after taxes” direct transfer (which is standard here for decades now).
The tax rates the employer pays are based on complicated tables which are calculated on average annual incomes and no deductions. So they are usually higher than they would be in reality.
At the beginning of the year, we get a paper from the employer stating how much taxes they have paid out of my pay over the year. Then we can take (you are not required to, but letting this slip would be stupid) tax forms and fill them out, or use a tax software (costs about €5 and contains all the legal tricks and up-to-date information). There you can claim all things that would reduce your tax load, e.g. Text benefits for education, for having a handicap, times on unemployment, change of pay rate, office supplies you need for business purposes, medical costs (which usually is not much, because we have working health insurance, but there are co-pays and things that are not covered, like something that is a big thing for us: a fixed rate per kilometer for trips to doctors and physiotherapeuts, which is a list of several pages and alone reduces our tax load by several hundred euro).
You submit this as a paper form, or, more modern, online. We usually hear back from the tax guys a few weeks later, asking for invoices and receipts, send them in, and again a few weeks later, we get money back. As we can claim a lot of stuff (my wife is handicapped), we usually get a few thousand euro back - which is a good incentive to file taxes! But even as a normal person, it pays, as there is a form “work-related costs” where people can claim money for commuting and similar things.
As a self-employed person, one has to submit taxes for the business, of course.
What you’re describing is basically identical to what happens in the US, so not sure what is “different.”
Nothing, because the first sentence made pretty clear they’re an American
They specifically use the currency euro in their comment…
Ah yes, Us Americans with our using Euros and Kilometers. You got me!
Check the tax office’s website of the country you live in, you might be up for an unpleasant surprise. Pretty normal to have to file a tax report if you are a grown up. There are exceptions in a few countries if all your income is from salaried work and you don’t have any deductions to claim but not the norm
