"Warning"Change in 2022. tax laws

[FreeBirdTim]

After all, they worked their #sses off for it.

Not necessarily true. Just because you made 500k doesn't mean you worked any harder than some guy digging ditches for a living. Do you really think lawyers work so hard that they deserve to skim 1/3 off the top for every slip and fall case they win? I think it's insane that a friend of mine had a 150k settlement for getting injured at a retail store, but only ended up with 72k in the bank. The lawyer skimmed 50k off the top BEFORE medical bills were paid, which seems really sleazy to me. After her 28k in bills, she got the 72k settlement. Nice chunk of change, but she can no longer walk without a limp and can only work part time now.

 

[Tom_in_CA]

You missed another difference: inflation. $600 in 1989 was worth more than $1,300 in 2021 ....

Hey, and don't forget , this magical "$600" figure was/is not some magical number figure, at which point in time you have to report it as taxable income. As if lesser amounts are tax-free.

That 600-figure is only the "magical #" at which point the govt. is alerted that $$ has changed hands . Ie.: Paid for services or goods. It never meant that smaller dollar figures weren't likewise "income". It's just that lesser dollar amounts was/is on the honor system.

Don't you remember the scene in the early 1970s Re-run of the Odd Couple TV show, where Felix (the neat-nick law-abiding stickler) told Oscar that he had reported the dime, that he found in the pay-phone change slot, on his income tax ?

I know your conscience is grief-stricken with guilt right now. BUT NOT TO WORRY ! Just Send all your back-tax money to me. For all the past indiscretions. I will get it to the proper authorities. And will absolve your conscience of all guilt. Think of it as "penance". Ok ?

 

[Tom_in_CA]

Not necessarily true......

FreebirdTim : There is always going to be some rich people who got there via unethical means. And that didn't require hard work. The same thing can be said of middle class, and low class people too.

The lawyer that you speak of "worked his #ss off" going to college, to pass the bar exam. And become a lawyer. If it is *easy*, then why isn't everyone becoming lawyers , and, presto, rich "like all lawyers are rich", eh ?

When I look around at business owners who took startup risks, and labored away during hard times (when they could have been out partying and chasing skirts instead), and they finally achieve wealth when they reach their 50s & 60s : I feel they "worked their #sses off, to get where they are. If it's easy, why isn't everyone starting a business, and getting rich ?

And if someone has ingenious creativity, to invent mousetraps, form popular rock bands, or whatever, and gets rich off of it, MORE POWER TO THEM ! They deserve every penny of it.

 

[mh9162013]

Not necessarily true. Just because you made 500k doesn't mean you worked any harder than some guy digging ditches for a living. Do you really think lawyers work so hard that they deserve to skim 1/3 off the top for every slip and fall case they win? I think it's insane that a friend of mine had a 150k settlement for getting injured at a retail store, but only ended up with 72k in the bank. The lawyer skimmed 50k off the top BEFORE medical bills were paid, which seems really sleazy to me. After her 28k in bills, she got the 72k settlement. Nice chunk of change, but she can no longer walk without a limp and can only work part time now.

How long did the case take to settle? What sort of legal arguments did she have for recovery? How strong were those legal arguments? What kind of evidence did she have to support her claim? How litigious was the defendant/defendant's insurance company?

Either your friend's attorney got fair compensation for the work they did, or they got a windfall. If the latter situation applies, why did she agree to a 1/3 contingency agreement? Those are negotiable you know. If her case was so easy, her attorney would have gladly have accepted a 20% or 25% contingency fee arrangement...or maybe even 15% if it was REALLY easy.

And don't forget, part of this compensation factors in the risk of taking on the case. Maybe an attorney got "too much money" for the work they did, but remember, they get nothing (and don't get reimbursed for litigation and court costs) if they can't get a settlement or lose the case. So there's a "bonus" built in to their fee to take this risk into account.

Also, of course the attorney takes their cut BEFORE medical bills are paid. The real question is if the attorney takes their cut before they reimburse themselves for litigation costs and expenses, which can easily exceeed five figures. Again, this is a term of the contingency fee agreement that's negotiable...or at least if the attorney won't budge, you can find another one who will, especially in a saturated legal market such as personal injury.

Oh, and as for your friend's permanent disability, sounds like she accepted a lowball settlement. But then again, we don't know that b/c maybe she had a very weak case. Is she eligible for SSDI/SSI? That could have factored into her willingness to accept a lower settlement knowing she might get supplemental income.

 

[Tom_in_CA]

...why did she agree to a 1/3 contingency agreement? .....

Good post. I was thinking the same thing. If/when anyone calls these ambulance chasers, they sign to the stipulations ahead of time. They're certainly welcome to shop around for better terms. So why is the lawyer a bad guy ?

Heck, I have a street sweeper business and charge between $150 to $190 p/h for our services. If someone is willing to pay me $300 p/h, I'll gladly take it. Would that make me a bad guy ? No, it's what the "market will bear".

And you're right : That lawyer probably put a lot of time into that case. And had a lot of schooling student-debt, to get passed the bar and be able to practice law. And the windfalls like that are infrequent perhaps.

Like a real estate agent that sells a house and makes a $25k commission ON A SINGLE SALE ! Some people might gripe and say that's exorbitant, blah blah But perhaps that agent only sells 3 or 4 homes per year. Same concept with the windfall lawyer cases.

 

[FreeBirdTim]

Sorry, but all lawyers we contacted here in RI charge a 1/3 contingency fee. They get you because they know most people can't afford to pay a lawyer 200 bucks an hour to handle their case. Great way to screw the poor people around here.

The case was open and shut. My friend tripped over some boxes that were left in an aisle at a local thrift store. She had witnesses who were employees of the store. Can't get better witnesses than that. She broke her hip and right arm in the fall, which has left her disabled.

As far as debt, how is that her problem? The guy is 50 years old, so I doubt if he still has any debt from law school. Should I pay my mechanic extra because he has a gambling debt? Not relevant to the case.

 

[FreeBirdTim]

Also, of course the attorney takes their cut BEFORE medical bills are paid.

Why should the attorney take money out of the medical bill settlement? It should be listed as separate payment in the deal. She never saw that money and had no control over it. It's like Feebay charging me fees on sales tax! I never see a penny of the sales tax, but they have the guts to charge me 12.55% in fees for it! Total scam in both cases.

 

[FreeBirdTim]

And don't forget, part of this compensation factors in the risk of taking on the case. Maybe an attorney got "too much money" for the work they did, but remember, they get nothing (and don't get reimbursed for litigation and court costs) if they can't get a settlement or lose the case. So there's a "bonus" built in to their fee to take this risk into account.

Sorry, but that's baloney. No decent lawyer will take a case on contingency unless he's 99% sure he'll win. They wouldn't be in business long if they took on lost causes. Very few slip and fall cases end up with the plaintiff getting nothing. Just the way it is...

 

[Tom_in_CA]

...Great way to screw the poor people around here....

freebird-Tim, let's do a thought experiment : If you had a used car to sell, you knew the going rate , for this model/make/miles, was $3000. Ok, what do you list the car for sale at ? : $3000 ? Or $2000 ?

If someone pays you $3k for it, did you force them to ? Did you screw them ?

Perhaps you've long since paid off the original cost of the car, so does that mean you should sell it for $2K then ? After all, you've long-since paid it off.

Never mind that there's a long line of persons perfectly willing to pay $3k for your car : If you don't sell it for $2k, you are "screwing poor people" who can't afford $3k.

So let me guess : You sell the car for $2k. Right ?

 

[KOB]

Ugh...you guys are all nuts !

 

[Steve]

Ugh...you guys are all nuts !

Dont forget KOB you will have to start paying taxes on all that gold ripped off from the coinstar.

 

[diggin4clad]

Taxation is the mother of the "underground economy". Been that way forever.

 

[Cherry Picker]

So why is the lawyer a bad guy ?

Because in all my dealing with them they have screwed me over. 100% of the time. They're nothing but scum sucking pigs, and the only lower human is a politician.

They only care about one thing. MONEY. It isn't about right or wrong, but MONEY.

The only people I know, besides politicians, whose conscience has a price on it.

 

[Coin-Saver]

Ok, so for now on my hobby is now a business, I consider the $1.14 cents I found last week as income, Now I can deduct my Detector, shovel, scoops, boots, batteries... Etc
Alright, I get a new detector every year..............

You should be able to deduct new coils too, as to add to the finds they can tax you on.

 

[Coin-Saver]

Dude, they have ALWAYS "chased" 600 bucks. I began my business in the 1980s. And even then, there was the 1099 rule, for whenever customers paid us $600 or more, in a calendar year.

Now as to whether or not everyone COMPLIED with that, is a different issue.

The only difference between then, and now, is that these days: $$ is changing hands digitally more and more. Not with paper checks and cash. So this is just keeping up with the times. It only SEEMS like this is "something new".

Besides, let's be honest : When you found that $10 bill lying the street last month, you dutifully reported that as income on your income tax. RIGHT ? So what are you griping about then ?

I don't like to tell on anyone....Especially MYSELF

 

[atomicbrh]

Just to clarify: Income from a hobby is taxable. You just can't deduct any business expenses.

My wife just retired and likes sewing - especially for the grandkids. She posted some pictures on social media and some people wanted to buy some of her creations. If she were to run it as a business, she would have to track all her costs (materials mainly) and inventory. Then if an item costs $20 to make and she sells it for $40, she would show a profit of $20 and pay tax on it. However, as a hobby, she reports $40 as income. It's just to costly/time consuming to do all the bookkeeping.
In addition, if she does all the record keeping, and her costs are more than the sales, she may not be able to deduct the loss from taxable income because the IRS can say it's just a "hobby" and there's no intent to make profit.
So many "anti-little guy" rules and laws. And billionaires pay little/no taxes.

This is an accurate description of the U.S. income tax code.
Buy expensive equipment one year, lose money that year and the business is classified as a hobby by the IRS.
Make a profit the next year because the expensive equipment was more efficient and the business is classified as a business by the IRS and taxes must be paid.
Throughout history, the government has only been efficient at one thing and that one thing is forcing citizens to pay taxes.

 

[KOB]

Because in all my dealing with them they have screwed me over. 100% of the time. They're nothing but scum sucking pigs, and the only lower human is a politician.

They only care about one thing. MONEY. It isn't about right or wrong, but MONEY.

The only people I know, besides politicians, whose conscience has a price on it.

I have mention in prior threads : I would rather chew on a turd than deal with a lawyer.

 

[Tom_in_CA]

Dont forget KOB you will have to start paying taxes on all that gold ripped off from the coinstar.

That's correct. And we've seen a few of Kob's show & tell posts here on this forum, haven't we ? Showing loose change, a few gold rings, etc...

It would BE A SHAME if that information and photo evidence fell into the hands of an IRS auditor. NOW WOULDN'T IT ??

 

[Tom_in_CA]

Because in all my dealing with them they have screwed me over. 100% of the time. ...

HHhhhmmm, yet who picks up the phone and calls these "scum sucking pigs", when they need to engage in some complicated legal affair (like suing stores for tripping over a box, etc...) ?

Answer : WE DO ! We ourselves call these lawyers, OF OUR OWN FREE VOLITION AND CHOICE ! And then later, turn around and gripe ? Ok, you're more than welcome to represent yourself. You're more than welcome to find a lawyer with fees to your liking (they don't all have identical rates).

And as far as "only caring about money" : It seems to me that, unless you're in a business other than your hobby/pleasure, that, YES: Working for a living is about (gasp) : Money. For example: I have a street sweeper business. Why do I do it ? Is it about the pleasure I derive ? Or is it about the money I make ? I got news for you : It's not pleasurable managing this fleet and drivers and customers. I (gasp) do it for the money. It's that evil phenomenon called: "Working for a living"

 

[diggin4clad]

I have mention in prior threads : I would rather chew on a turd than deal with a lawyer.

What does chewing on a turd and dealing with a lawyer have in common?
They both leave a bad taste in your mouth.