All I can say is I've advised everyone on why they paid more with their return. Typically, when they cash out or early withdrawal of retirements they only take out the ten pct penalty plus ten percent for taxes, never considering the multi bracket jump.

Other times it's a married couple and both are claiming the exact amount of dependents and both are working.

Pub 15a outlines the with holdings by the number of exemptions claimed. The IRS likes a net zero game, you don't owe them and they don't owe you. It's up to you to ensure you have the proper withholdings. You can write a check to the Treasury to apply additional funds to your account.

As far as the accusations of getting info from the internet, I referenced IRS pub 17. You can review the material yourself.

 

@JoeJester -- If you are an accountant, financial advisor, etc -- please accept my apologies for the tone of post #60 - Clearly, my 'run' of sad experience can hardly be regarded as indicative of the attitude/integrity of your profession as a whole!

Most sincerely
HP

 

WBahn and joeyd, if you are patriotic(loving the country your living in) you should just use the standard deductiond. To help your country in what it gives you. If you don't like some of the things the country does, just assume all of your taxes go into the pile for what you do like. Joeyd thought I was on your ignore list?

 

Are you certain about that? -- Each of us (i.e. @Aleph(0) and I) are in the "39.6% bracket" (according to the schedule shown in post #34) yet, speaking for myself, my short-term capital gains taxes have averaged ≈ 70% (all said and done) -- (Hence Aleph's refusal to 'take on' such investment...) Perhaps the rate is affected by the nature/type of investment?

Best regards
HP

https://www.irs.gov/taxtopics/tc409.html

"Net short-term capital gains are subject to taxation as ordinary income at graduated tax rates."

What do you mean by "all said and done"? You need to keep different taxes accounted for separately in order to be sure you are doing it right.

 

WBahn and joeyd, if you are patriotic(loving the country your living in) you should just use the standard deductiond. To help your country in what it gives you. If you don't like some of the things the country does, just assume all of your taxes go into the pile for what you do like. Joeyd thought I was on your ignore list?

That makes no sense, from several perspectives.

The government created itemized deductions as incentives for people to do things that the government believes are good for the country overall, such as encouraging and facilitating home ownership by making home mortgage interest deductible or by encouraging charitable donations. Are you saying that people should NOT do what their government is encouraging them to do?

Personally, I haven't itemized deductions for nearly two decades. Why? Because the standard deduction is MORE than I would qualify for if I were to itemize. So if I were to itemized, I would pay more in taxes. So am I being patriotic by paying less in taxes because I claim the standard deduction?

And the bottom line question still remains -- how is abiding by the tax code put in place by your country unpatriotic?

Is a company being unpatriotic when it pays for its employees' health insurance and deducts the premiums as an expense?

Is a company being unpatriotic when it contributes 25% of its employees' annual gross income into their retirement accounts and deducts the contributions as an expense?

 

I employ accountants to assure 'compliance' only -- Frankly the paternalistic attitude seemingly endemic to said profession puts me right off! So... Am I paying more than necessary? probably - but then at least it's my mistake!
To any accountants reading this whom are not paternalistic, condescending jackasses -- you have my humble apologies -- As per my mantra: "never ruffle a Rara Avis"

Best regards
HP

PS
Please note that said bracket represents a very 'low bar' which being yet another example of theft by redistribution!

HP I don't say you are hypocrite at all to have accountant check transactions, contracts and taxes for compliance! Cuz when RK (which is totally another RK, ppl) was making deposits less than $10k they tried to say he was violating bank secrecy act and even though he proved it was legit he still had to pay almost $500k in fines!

 

I employ accountants to assure 'compliance' only -- Frankly the paternalistic attitude seemingly endemic to said profession puts me right off! So... Am I paying more than necessary? probably - but then at least it's my mistake!
To any accountants reading this whom are not paternalistic, condescending jackasses -- you have my humble apologies -- As per my mantra: "never ruffle a Rara Avis"

Best regards
HP

PS
Please note that said bracket represents a very 'low bar' which being yet another example of theft by redistribution!

That's basically my take on all of this. If they feel they are justified stealing from me fine.

If what I take home from the job exceeds my expectations for the work I do I could care less what they claim the gross numbers are and why. As I said before the up front gross pay numbers are meaningless to me. It's what I take home that matters and if that number does not match my expectations for the work I do I have zero problems with not working for that employer any more.

If you are okay with paying an extra $1,125.67, then that's your choice.

By my standards the oil field job I had paid extraordinarily well on what I did take home for what little they had me doing.
I have zero reasons to greedily to argue over any of it.

 

WBahn and joeyd, if you are patriotic(loving the country your living in) you should just use the standard deductiond. To help your country in what it gives you. If you don't like some of the things the country does, just assume all of your taxes go into the pile for what you do like. Joeyd thought I was on your ignore list?

Shortbus I can say one thing is that I'm glad to pay into all SSA programs cuz that's insurance policy NOT charity! So if I lost everything and became disabled at least I wouldn't have to sleep in dumpster
It makes me so angry to hear SSDI beneficiaries called bums cuz they are really like any other insurance claimants who paid their premiums!

 

And the bottom line question still remains -- how is abiding by the tax code put in place by your country unpatriotic?

First, @shortbus made an unfortunate mistake when he said,

WBahn and joeyd, if you are patriotic(loving the country your living in) you should just use the standard deductions.

. I'm sure he meant, "allowable deductions" - meaning, patriots pay taxes and they don't complain and they don't expect someone else to provide their roads, provide basic education to a workforce, national security, local and state police, and all the other agencies that create out government. If you don't like it, do something about it but don't expect someone else to pay your way.

Also for joeys claim of creating jobs, big deal and who cares - his definition of a job and society means creating another slave for his government and minimum wage is too high (or shouldn't exist) so what's the difference between working for a government or working for Joey (a slave to government or a slave to Joey)?

And no, @WBahn, you are wrong about the bottom line question. The bottom line question is, why does Joey think people are slaves for the fraction of the year equivalent to their tax rate. Patriots pay taxes. People who think their taxes are too high (and imply that others are freeloaders) confuse how taxes are paid.

Finally, the real bottom line question is - how does this apply to the price of a battery?

 

...a slave to Joey

Nope. Don't own any slaves.

And never have I threatened violence against anyone who didn't wish to work for me.

There is a difference. But you are blind.

 

First, @shortbus
. I'm sure he meant, "allowable deductions"

No, he very clearly meant "just use the standard deductions". His entire point earlier was that people that abide by the tax laws and use legal deductions to lower their taxes are not paying "their fair share".

 

@Hypatia's Protege I did taxes at H&R Block for the last six years. My ethics were to get the people the most they were legally entitled to OR pay the least they were legally responsible for. I know of one client who I advised the year before about early withdrawls, and they took additional taxes out, more than before, this year and were happy they ONLY had to write a $10,000 check this year.

When it comes to your money and taxes topic, I cite my references, after all, this is the internet.

@shortbus There is absolutely NOTHING stopping anyone from writing a check to the Treasury to be placed back into the general fund to "help" the country. The problem becomes, you have 535 critters in the legislature who think that money needs to go to their constituents. Till then, I recommend paying the lowest legal tax you are required to pay. Take every deduction, ITs YOUR MONEY. Now if you think they can spend YOUR MONEY better than YOU CAN, write them a BIG CHECK.

 

What @tcmtech did not tell us was if the boxes 3 and 5 matched the number in Box 1. If they were higher, BOX 12 mentions how much was distributed to the various places, like a 401k or other tax deferred savings. I'm sure tcm's tax person had a conversation with him.

As far as the flat tax goes, I'm all for it. If it were a "sales tax", it would REMIND everyone on every purchase how much it costs to operate the government. If it were a flat income tax rate, where everyone paid a single percentage, it would be so high that term limits in congress would be effective the next election with a wholesale replacement of the legislature.

X percent ensures that everyone pays their "fair share". The problem is some define "fair share" as progressive based on income. Is it fair for some to pay a lower rate than others? Can you support yourself on the "standard deduction" and "exemption" for a year? That's what Congress allots you and taxes the rest of your income. Of course you can reduce or increase your income by taking the Itemized Deductions, in lieu of the Standard Deduction. Your tax person can force the itemized deductions IF it is less than the Standard Deduction so you pay MORE taxes they you are legally required to do. After all, it's YOUR Money, your choice. What I think of someone paying more then they are legally required to do is my own opinion and does NOT reflect on their choices in life.

 

https://www.irs.gov/taxtopics/tc409.html

"Net short-term capital gains are subject to taxation as ordinary income at graduated tax rates."

What do you mean by "all said and done"?

IIRC the additional expenses are referred to as 'surcharges'?

You need to keep different taxes accounted for separately in order to be sure you are doing it right.

I thought I was... -- I am, however, very, very certain that I am not underpaying and that all actions and submissions are compliant with applicable regulations - which passes as 'good enough' for the nonce -- Without wishing to appear 'petulant' or 'apostate' my 'semi-lone wolfishness' in this regard owes to the fact of my having experienced much trouble with financial 'handlers' -- the details of which don't bear further public ranting (on my part)

Cuz when RK (which is totally another RK, ppl) was making deposits less than $10k they tried to say he was violating bank secrecy act and even though he proved it was legit he still had to pay almost $500k in fines!

Indeed, well I recall --- FWIW The charge was 'Structuring' which, as I understand it, is an offense in and of itself -- despite intent! ---- IOW it's unlawful to duck governmental snooping even in the absence of misconduct or criminal intent

I can say one thing is that I'm glad to pay into all SSA programs cuz that's insurance policy NOT charity!

That's my take on (so called) 'entitlements' as well -- If, heaven forbid, my family or I would be eligible under similar conditions then it's insurance I'm happy to support!

Best regards
HP

 

at least I wouldn't have to sleep in dumpster

That can be nasty should you oversleep on a Tuesday!

TTFN
HP

 

. I'm sure he meant, "allowable deductions" - meaning, patriots pay taxes and they don't complain and they don't expect someone else to provide their roads, provide basic education to a workforce, national security, local and state police, and all the other agencies that create out government. If you don't like it, do something about it but don't expect someone else to pay your way.

That's where I largely sit on this. I know what those things cost and what I pay seems more than justified to keep having them at my disposal.

I just wish they were handled more efficiently and by better people though.

What @tcmtech did not tell us was if the boxes 3 and 5 matched the number in Box 1. If they were higher, BOX 12 mentions how much was distributed to the various places, like a 401k or other tax deferred savings. I'm sure tcm's tax person had a conversation with him.

They are all the same. I wasn't aware they could be different.

 

I would probably opt for a national sales tax IF it was done via a constitutional amendment that prohibited corporate and personal income taxes. If that isn't done, we will simple end up with both. I would also like to see the sales tax applied universally and that it not be legal for congress to apply different rates to different things or to exempt categories of things from the tax. The only thing I would make an exception for would be incidental sales and services between individuals, such as the neighbor kid mowing someone's lawn or one person selling something to another person.

We also need a balanced budge amendment since Congress is incapable of living within its means.

The fairest tax, in my book, is one in which the government taxes each person equally. If you are an American citizen, then you (or your parents, in the case of a minor) have to pay X dollars to the federal government this year. Family of four? You pay 4x. THAT would wake people up and get them to hold Congress accountable for its spending!

In 2014 (that last year that figures are available for) the median household income was $53,657. For the proverbial "family of four" making that amount and filing 1040EZ (meaning that they are paying the most tax possible), they had a standard deduction of $12,400 and four exemptions of $3,950 each, leaving them a taxable income of $25,457. They were taxed 10% on the first $18,151 and 15% on the remaining $7,306, for a total federal income tax liability of $2,911, or just 5.43% of their income (and $728/person). Someone that was single making that much paid $6,733 in federal income tax, or 12.55%.

Now consider that federal expenditures in 2014 were $3.5 trillion (although revenues were barely over $3 trillion) and that the population was 319 million, the feds spent $10,972/person ($43,887 for that family of four).

 

The only thing I would make an exception for would be incidental sales and services between individuals, such as the neighbor kid mowing someone's lawn or one person selling something to another person.

That's what cash is for.

 

They are all the same. I wasn't aware they could be different.

They can be very different.

Let's say that you elect to contribute $20,000 into a pre-tax retirement plan. That $20k would NOT show up in Box 1 because it is tax deferred (for income tax), but it is still taxable for Social Security and Medicare, so it would show up in boxes 3 and 5. Other things that would fall into that category or amounts paid pre-tax for insurance premiums, HSA/FSA contributions, etc.

On the other hand, let's say that you worked for a government entity that had it's own pension plan and therefore didn't participate in Social Security. So then Box 3 would be zero (but not box 5, since you still have to pay Medicare tax).

 

That's what cash is for.

That's how it is often avoided (but doing so is already against the law in most cases). I'm a pretty firm believer in not making laws that you know won't be obeyed, so make such transactions legal and above board.