Quote:
The money that you did not receive as a part of your paycheck is a taxable event. You signed a W-4, digits were subtracted from your pay. The IRS is going to assume you had a taxable event because digits were subtracted--you authorized those digits substracted from the W-4.
|
But there were no taxable events. That is what shows on the tax return. The withholdings are exactly that, withholdings. They are withheld. They are not a taxable event.
Quote:
|
At the end of the year you will have a taxable event to declare with the digits that were withheld from your pay and allegedly sent to the Treasury.
|
You keep saying that and that is incorrect. The taxable events were the cashing for private credit. If you cashed nothing for private credit then you have zero taxable income for the year. When that happens in all honesty, the withholdings are Refunded. I do not see any way for the Treasury to say the withholdings are private credit and tax upon them. If they were to do that they would be obligated to send part of that Refund - say you fell into a %40 tax bracket; they would send back 60% of the withholdings. That is if the withholdings were a taxable event.
But you had me thinking it through carefully. Thanks for that exercise. I missed my usual chess today and I like to get some mental cybernetics.
I think you are incorrect about withholdings being arbitrary. They are based upon a schedule and exemptions declared on the W4. But either way, it is a faulty foundation for the point you are making - that withholdings itself is a taxable event. Withholdings are withheld in anticipation of taxable events.
Regards,
David Merrill.