Why Tax-Aside?
Tax-Aside is a discrete, confidential, voluntary estimated tax savings plan and payment service, designed
to help
the self-employed who may find themselves remiss, because they are either: 1) not regimented, or,
2) not inclined to make sufficient quarterly estimated tax payments.
A businessperson who is delinquent in this area need not feel alone; in fact, they are in the vast majority.
IRS statistics show that less than 40% of self-employed taxpayers are tax payment compliant, versus salaried employees, who are 98% compliant in the adequacy of the amount of their mandatory withholding payments.
Tax-Aside will assist its self-employed and business owner Subscribers to become tax compliant, by means of an estimated tax escrow account.
Periodic (weekly, bi-weekly, or monthly) ACH debits from the Subscriber’s checking or savings account, will be placed there. Along with set-aside reminders and activity statements, the cost for Tax-Aside for each user is only $7.95 per month.
The following is a table based upon a single person, self-employed, using the standard deductions and setting aside tax payments on a weekly basis:
|
Income |
Tax |
Tax-Aside |
Add-backs1 |
Tax-Aside |
IRS |
Savings2 |
$30,000 |
6,717 |
96 |
38 |
58 |
306 |
248 |
$50,000 |
12,990 |
96 |
49 |
47 |
588 |
541 |
$100,000 |
31,810 |
96 |
85 |
11 |
1488 |
1,477 |
1 Includes projected interest earned on escrow funds (net of tax) plus a deduction for Tax-Aside fees.
2 Equals Tax-Aside Net Cost less IRS Penalty.
From this table, we can assume that the cost of using Tax-Aside will actually be a savings, when compared to
the penalties incurred by any self-employed earner, declaring $12,000 or more, who missed his/her quarterly estimated tax payments.
The Hidden Costs of Non-Compliance
In addition to financial consequences, there are also quality-of-life considerations worth mentioning, concerning the plight of the self-employed individual who does not remit timely tax payments;
the following generally occurs:
- The inability to lease a car, buy a house, or obtain a credit card, due to impaired credit, is an
extension of this dilemma. - The IRS files tax liens and the individual’s credit, reputation and peace of mind are impaired.
- The individual can’t maintain a bank account due to fear of an IRS levy.
- The filing of separate tax returns to keep the spouse’s credit clean, results in the
unnecessary payment of thousands of dollars in extra taxes due to the bracket break
between MFS and MFJ. - Another more serious consequence of the above scenario occurs as a snowball effect, when
a delinquent taxpayer stops filing tax returns and becomes liable for additional civil and
criminal penalties.
In summary, the Tax-Aside tool pricing is less costly than a standard payroll service (generally seven dollars
per transaction) and helps self-employed earners to save money and stay in, or get back into tax compliance.
Make a one time catch up payment now! |
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