TaxRevolution.us is hosting a Tax Day reading of the US Tax Code. Take your blood pressure meds before you click HERE.
Forty Percent of 5th-12th Graders Plan to Start a Business
There are some promising signs. About 40% of students say they plan to start a business and/or invent something that will change the world. The problem is, less than 5% of these students are participating in internships at companies or organizations. This is arguably the single biggest national failure of our leadership. Not Washington’s, not the public school systems’ — but yours and mine.
They want to start a business, but there’s a small catch – those trying to go into business for themselves, especially in the ‘sharing economy’ face steeper taxes with fewer allowed deductions:
Millennials Need a 21st Century Tax Code
Unfortunately, the outdated complexity of the revenue code has given rise to a plethora of effective tax penalties that tamp down potential growth in newly developing economic sectors. For workers in the sharing economy (such as Uber, Lyft and Airbnb), the burden of federal taxes can far outpace that for a comparable worker in a traditional employment setting.
A young American earning money in the sharing economy is required to report work to the IRS as a self-employed, “sole proprietorship,” using a 1099-Misc or 1099-K form rather than a W-2 form. As such, these young workers are required to pay the full entitlement tax of 15.3 percent, while workers with employers only pay 7.65 percent (the other 7.65 percent being paid by their employer). The injustice here is that employers may deduct the 7.65 percent that comes out of their employees’ paychecks as a labor expense, while a young worker in the sharing economy is offered no such benefit.
It’s not all bad news this tax day – several businesses are having Tax Day deals, including Bob Evans and Boston Market. Find a list HERE.
Reason.com shares 23 Tax Facts and Tips
- Americans spend 6 billion hours every year doing taxes.
- The U.S. tax code is over 72,000 pages and growing.
- Olympic medal winnings are tax free. Nobel Prize winnings are considered income.