What's new

Tax Season Blues (1 Viewer)

Eric_L

Senior HTF Member
Joined
Nov 2, 2002
Messages
2,011
Real Name
Eric
Feel free to share your experience being bent ov.. er I mean, taxed this year.

I had the pleasure of seeing my income tax bill increase 300% this year! The inexperienced may think "Hey - that just means your income went up 300% too! W00T!". I once thought that. I found out though that is not correct however. This year I broke through the ceiling income where I lose eligibility for all tax credits. My actual income increased about 40%. (Much of that due to my wife working p/t now that the kids are in school) Still not bad, but hardly worth a 300% increase in tax paid! And some people think that's still not enough!!! Get a rope! (before they get a barrel!)
Maybe if I were getting 300% more government service this year I wouldn't complain so much. But then, I really do appreciate the, um, er, um, hmmm. Just what DID I get for my income tax paid?? Nearly everything I use is funded by taxes other than income tax.

I hear that there are two other times when it really hurts - when you lose deduction eligibility and when your best deductions (children) move out. I look forward to neither. At least one won't happen for another eight years. The other in about two.

So tell me - how hard did Uncle Sam slam you this year?
 

Jay Taylor

Supporting Actor
Joined
Sep 8, 2000
Messages
837
Location
Oklahoma City
Those of us who are self-employed don’t have an employer to share the Social Security/Medicare tax. So there goes 15.3% right off the top for Self-Employment tax (12.4% for Social Security, 2.9% for Medicare) before even beginning to figure Federal & State Income tax. Ouch!

I think I’ll start a new business bartering with the Amish. ;)
 

Eric_L

Senior HTF Member
Joined
Nov 2, 2002
Messages
2,011
Real Name
Eric
I've been maxing out my social security tax for years. I found this website;
http://www.heritage.org/research/fea...alcWelcome.asp
which determines your effective rate of return on your maximum benefit. Mine is -1.32%. Yes - that is NEGATIVE 1.32% every year. I may have an employer who "pays" half of it for me - but - well - lets just say their generosity does not come without a cost. I'd much rather they paid it to me so I could invest in something with a positive return rather than have it confiscated by social security to invest at their "generous" rate.

Ironic - that letting the government invest for you results in a negative rate of return. Seems so apropriate...
 

Chris Lockwood

Senior HTF Member
Joined
Apr 21, 1999
Messages
3,215
Eric, how can that be? I thought rich people like you didn't pay taxes and that only the poor and middle class did. At least that's what the media has been saying for years.


> I hear that there are two other times when it really hurts - when you lose deduction eligibility and when your best deductions (children) move out.

But you don't have the expenses of the kid that year- wouldn't that cost more than the amount of the deduction?
 

nolesrule

Senior HTF Member
Joined
Aug 6, 2001
Messages
3,084
Location
Clearwater, FL
Real Name
Joe Kauffman
We're getting a nice refund. Thank heaven for good tax accountants.

I'm self employed, so I make quarterly estimated payments and it's hard to predict how much our tax bill will be each year since there are so many variables that go into calculating self-employment income.
 

Mort Corey

Supporting Actor
Joined
Nov 21, 2003
Messages
981
Well, you're not done yet....IIRC, "tax freedom" day doesn't come until April 19th this year (unless you're lucky enought to live in a high tax state and then it's early May).

When I add up all my "contributions", I figure it's pretty darn close to 60%. In my next life I'm coming back as a sharecropper so i can at least keep 50%.

Mort
 

bobbyg2

Supporting Actor
Joined
Feb 23, 2007
Messages
897
Real Name
Bobby Geiser
Don't you get tax relief if you send money to charity? Maybe we should all start giving money away! :D
 

Chu Gai

Senior HTF Member
Joined
Jun 29, 2001
Messages
7,270
Yes, but it's not in proportion to what you give. Still, it's nice to give. If the wife put you in a new bracket, you could do what some people do. Get a divorce and live together.
 

Jason L.

Second Unit
Joined
Jul 12, 1999
Messages
483
For those of us who work overseas, we got hammered on changes to the Foreign Earned Income Exclusion.
 

Eric_L

Senior HTF Member
Joined
Nov 2, 2002
Messages
2,011
Real Name
Eric

LOL. You are either very funny or don't know anyone who has children in college, or out of college, or getting married, or buying their first home, or having their first baby, etc. etc. ....
 

Jason L.

Second Unit
Joined
Jul 12, 1999
Messages
483
If you work outside the USA [like us contractors in Afghanistan, Iraq, etc.] and meet certain conditions - you can get a portion of your income excluded from taxes. The stipulation usually is that you have to be outside the USA for 330 days out of a 365 day period.

To get the full exclusion [currently about 82,000] you have to be outside the USA for 330 days during the calendar year. At this point, it is like you are not even a US citizen.

Quick Breakdown:

2005 Tax Law: Make 110k, exclude 82k, pay taxes on 28k - at the tax rate as if you made 28k

2006 Tax Law: Make 110k, exclude 82k, pay taxes on 28k - at the tax rate as if you made 110k

There is now a big difference in the tax rate, and subsequently, the taxes you have to pay.
 

Eric_L

Senior HTF Member
Joined
Nov 2, 2002
Messages
2,011
Real Name
Eric
DANG!! You got hozed pretty well too - and you used even fewer taxpayor services than I did!

Amazing that they still can't balance the budget...
 

Dan Keefe

Second Unit
Joined
Jun 28, 2000
Messages
408
we got money from my father in laws estate. We were told that the money shouldn't be taxable...H & R Block just told us that we owe 17K...yes that is 17,000 dollars. Unfortunately, we put most if the money into a down payment for our house last June. So we don't qualify for a home equity yet...so I need to find 17 grand before the 19th...sweet
 

Gregg Loewen

Founder, Professional Video Alliance
Insider
Senior HTF Member
Joined
Nov 9, 1999
Messages
6,458
Location
New England
Real Name
Gregg Loewen
dan, why the heck are you going to H and R block ??
find an accountant and get some real advise.
 

Malcolm R

Senior HTF Member
Joined
Feb 8, 2002
Messages
25,140
Real Name
Malcolm
I agree. H&R Block is the last place I'd ever go for tax assistance.

This is the first time in three years I've got a refund, so it wasn't a bad year for me.
 

Jay H

Senior HTF Member
Joined
Mar 22, 1999
Messages
5,654
Location
Pittsfield, MA
Real Name
Jay
My first mortgage so I got $6k from federal back in March (I filed in early february once I got my W2 and I got about $700 back from my state so I guess I'm OK. Normally I get back a few hundred from federal but I guess paying an outrageous mortgage gets you some taxes back...

Jay
 

Eric_L

Senior HTF Member
Joined
Nov 2, 2002
Messages
2,011
Real Name
Eric
Yeah Dan - I'd like to know more about your fathers estate also. Seems to me the estate should have paid the tax in his final return. What is it that hozed you?

My tax bill went from about $7000 in 05 to over $21,000 in 06 - my income only went from $110,000 to $150,000 - mostly due to my wife.

Here's the kicker - I still got a refund.
 

Dennis Nicholls

Senior HTF Member
Joined
Oct 5, 1998
Messages
11,395
Location
Boise, ID
Real Name
Dennis
You guys are a bunch of crybabies....wait until you hear my story.

I retired in 2005 and had absolutely no income from "wages, salaries, tips, etc." for 2006. My 2006 1040 line 7 is ZERO, NADA, ZIP.

I paid federal taxes of over $31K for 2006...... :eek: And this is purely a "single person" PENALTY. Had I been married, my federal tax for 2006 would have been ZERO. :angry:
 

Users who are viewing this thread

Forum statistics

Threads
356,814
Messages
5,123,738
Members
144,184
Latest member
H-508
Recent bookmarks
0
Top