• sugar_in_your_tea@sh.itjust.works
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    8 months ago

    Interest is income, so your W-2 won’t be enough to account for that. You’ll also need to go to any banks, taxable brokerage accounts, etc, because that money will impact your taxable income. Still not a ton of work, but it’s still more than just W-2 + standard deduction.

    • ZombiFrancis@sh.itjust.works
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      8 months ago

      Thanks for the casual assumption brokerage accounts enter into the picture.

      No savings for interest, all income goes to debts and expenses.

      But I am doing relatively great almost entirely because my housing costs are comparatively low and locked in for 27 more years.

      • sugar_in_your_tea@sh.itjust.works
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        8 months ago

        That’s fair. My point though is that with higher IRS funding, poorer people are probably going to get audited more, and if you’re only using your W-2, you’re probably missing something and could get caught with an audit.

        Other things that could factor in:

        • bank account bonuses - i.e. that $100 to sign up for an account or whatever (usually doesn’t include credit card rewards, but that can also depend)
        • gambling wins
        • interest on inheritance money, if any
    • Zorque@kbin.social
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      8 months ago

      Most people aren’t going to have anywhere near enough taxable investment income for that to matter.

      I think I got about $.87 in interest payments from bank accounts in the past year. I don’t think that’s going to make a huge difference in taxable income.

      • sugar_in_your_tea@sh.itjust.works
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        8 months ago

        You need a better bank account then.

        Let’s say you have $10k in cash (typical emergency fund) and get 4% on it (relatively competitiv; e.g. Ally gives 4.25%), that’s $400 in interest (not including compounding), which is a reportable amount of income. If you’re doing something clever or have a bit more cash for some reason (e.g. saving for a house), you could easily get into more interesting amounts of money.

        • Zorque@kbin.social
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          8 months ago

          $10k in cash (typical emergency fund)

          There’s your mistake right there, thinking people have even $10k to serve as a spare emergency fund.

          I don’t even have a thousand spare right now for an emergency.

          • sugar_in_your_tea@sh.itjust.works
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            8 months ago

            It’s just an example. You can get semi-interesting numbers with just regular cash flow, depending on what kind of interest your accounts get. Let’s say you make $60k/year and your money sits in your account on average for 5 days. So that’s essentially the same as $800-900 (($60k / 26) * (5/14)) earning whatever your interest rate is on your account. That’s something like $20-40 for 2-5%. That money counts.

            Your risk of an audit increases the more discrepancy the automated checks find. This article claims poorer people are getting targeted more and more, so I think it makes sense to take a few extra minutes to report all of the little accounts you may have.

          • Riven@lemmy.dbzer0.com
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            8 months ago

            Yea I appreciate the dude trying to make sure people don’t forget stuff and get fucked by the irs but he’s a bit privileged thinking we’re all as well off as he is.