How's it feel being a slave for 1/4 of your working life?

Nobody ever said Freedom was free, or do you have a reference?

 

How's it feel being a slave for 1/4 of your working life?

It's fine with me. I've been mostly useless for the other 3/4's so far!

I love my country and the perks we get with it plus I know enough good people who get justified help from what my tax money pays for to not feel too bad in the end anyway.

I just like to think of it as what I pay in goes to the honest programs that help them out.

Now the rest of what you guys are paying for? Well seriously you're getting screwed big time.

 

Nobody ever said Freedom was free, or do you have a reference?

Isn't it funny that the guy's that claim to be so "patriotic" are the same ones that do all they can to not pay their fair share of taxes.

 

Isn't it funny that the guy's that claim to be so "patriotic" are the same ones that do all they can to not pay their fair share of taxes.

Isn't it funny that those who insist others pay a "fair share" never define "fair" (except as "never enough") and have no problem holding a gun to the heads of those who have the capacity and ability to provide it, thereby withdrawing their ability to do so rationally?

@shortbus, how many jobs have you created today?

 

Wbahn I say capital gains tax is the real killer! And it's just mean spirited cuz its like they're trying to penalize success and good judgment with investment! Anyhow I agree that income tax is unfair too cuz rate shouldn't increase with income! It's morally totally wrong and also it's disincentivizing hard work! I know flat tax has snags but it's fairest idea I've heard cuz no one should have to pay like 40% of their income to just feds!

Capital gains are either taxed at your normal income tax rate (if short term) or at the long-term rate. If your marginal tax bracket is either 10% or 15% then you pay 0% in long term capital gains. If you are in the top bracket (39.6%) then your long term capital gains tax rate is 20%. All others (i.e., the 25%, 28%, 33% and 35% brackets) pay 15%. So that can't account for the overall tax rate being higher than the single rate. The big unfairness with the capital gains rate is that the money is taxed twice. First it is taxed at the corporate rate and then it is taxed at the personal capital gains rate. So money that is distributed as capital gains is often taxed at an effective rate approaching and often exceeding 50%.

 

Isn't it funny that the guy's that claim to be so "patriotic" are the same ones that do all they can to not pay their fair share of taxes.

What is their fair share? If you can't answer that question, then how can you possibly know whether someone is or is not paying their fair share? How can you claim that they are doing all they can to not pay their fair share if you can't determine what their fair share is? How is abiding by the tax code established by Congress unpatriotic?

 

...and have no problem holding a gun to the heads...

Oh, and I forgot:

Guess who created and paid for those guns...

 

Ever work hourly and look at your take home pay per paycheck Vs hours worked? I always have and depending on how much I made most of my jobs I have had in my life there was a tipping point in overtime pay were it literally didn't pay to keep showing up for work.

Uh, yeah. I've worked hourly, I've worked salaried, I've worked self-employed, and I've been an employer for an hourly worker. And I've understood where every single penny of the gross pay went and why.

On one of my first jobs I ever had I noticed that on a two week paycheck that at ~95 hours for the two weeks combined I made just over $1100 take home but somewhere between there and 100 hours per two weeks I made around $980. When inquired to what was going with the company HR department on I was told, "welcome to overtime tax hikes kid. Most people never figure that stuff out on their own."

What "overtime tax hikes"? At worst, the additional pay put your into a higher marginal tax bracket, which would only reduce the additional pay. If they withheld more additional taxes than your additional gross pay was, they did it wrong. Your withholding is (almost always) based on the assumption that you make whatever your gross pay was during that period every period all year long. There is no "overtime" tax rate at all -- it doesn't matter if your gross pay is from salary, or for ten hours work, or 210 hours work. They annualize your pay for the period and then effectively figure your tax liability using the filing status and exemptions you claimed on your W-4. This is just to estimate what you liability will be -- the actual tax liability is determined based on your return.

Ever since then I have always watched my paychecks to see what my total working hours were doing for my take home pay and pretty much every job I have had there was always some take home pay drop at a certain number of overtime hours. Some that drop was negligible but at others it was more of a hit than I cared to swallow for the company I worked for.

Have you every taken the simple step of just calculating what the proper withholding should have been? This is very easy to do. If you don't agree with their numbers, then insist that they show you exactly how every penny that was withheld was computed.

Exemptions? What exemptions? I'm a white guy. I don't get no stinking exemptions. Really. I don't ever recall seeing anything about any exemption I have ever been qualified for. Hell, I can't recall ever even having any thing I have ever tried to use as a deductions even go through.

What the hell does race have to do with anything.

https://www.irs.com/articles/2015-federal-tax-rates-personal-exemptions-and-standard-deductions

Have you ever actually filled out your own return?

If you file 1040EZ look at line 5 (for 2015).

https://www.irs.gov/pub/irs-pdf/f1040ez.pdf

If you single you enter $10,300 and if you are married you enter $20,600. These are the sum of your standard exemptions ($4000 each) and standard deductions ($6300 each). A single person that has less than $258k in income ($310k if married) is entitled to the full $4000 exemption for every person in the household that is not claimed as a dependent on someone else's return.

If you file 1040 look at lines 38 and 40.

https://www.irs.gov/pub/irs-pdf/f1040.pdf

So how is it that you aren't eligible for the standard exemption or standard deduction?

If you haven't claimed valid deductions, then just claim the standard deduction. You are entitled to choose whichever one results in a lower tax liability.

Is there some other form I have should have been filling out all these years that give me those sizes of exemptions?

No, but it might have helped to actually read the forms you used.

There's a whole bunch of other things they take out for that come on a W-2 form than just those two federal and state tax rate and I consider anything on that W-2 that I don't get to chose not to pay as part to my taxes.

So if they take out premiums for life or health insurance or contributions to retirement plans, you consider that part of your taxes?

 

I did some digging to find my tax info so here's the numbers as they stand on my paperwork done by H&R Block.

Box 1. 99,102.54
Box 2. 13,538.63
Box 4. 7020.96
Box 6. 1686.06
Box 14. 2824.98
Box 17. 1942.68

So that's 99,102.54 - 26,013.31 = 72,087.36 or ~28% of my gross pay.

Opps my bad. I guess it was just over 1/4 of my pay not 1/3. Still I'm not going to complain about making ~$100K and paying ~$28K in over making <$20K and getting $500 back.

I assume those box numbers are from your W-2?

How did you file? Single, Married filing joint? What form was used?

The amounts withheld really don't matter since they might be too low or too high. What matters are the amounts after your tax return is filed.

 

I've been doing my taxes all my life except for that year the Ex insisted we should have professionals do it so that we would get a bigger refund and that the one where I got hit with the extra $2000 something to pay in above what I had withheld from my pay.

I file with the 1040Ez online and if the numbers don't show up on my W-2 I have no clue what else there is for deductions, credits or anything else. If it's not listed there I don't know about it.

As for the whatever drop at so many hours over time if it's not directly tax related then I have no idea what is from but I know too many people who agree they have all seen that with their paychecks too and the general belief is/was its got to be tax related. To be honest those of us who have ever questioned an employers accounting department over it not one of us has ever gotten a straight answer other than the computer software just figures out what is what based on our logged working hours and they put the pay stubs in the mail.

Maybe you have just been lucky at not having ever noticed it but I for one always question when a paycheck comes in looking smaller than I think it should and do the basic math on pay rate Vs hours put in and I know damn well that I have seen that drop when overtime hours went too high too many times to be imagining it and have talked to to many people with way more meticulous math skills than mine who agree they have seen it too. I don't know when, where or how but I know it happens.

Now for health insurance deductions from my paychecks well I got to looking I think that's where my ~34% total withholdings number came from. And yes in a way I damn near consider that a tax being I have no say in it and I have never gotten anything of more value from it for what I have paid in over the years.

I'm very good with applied mathematics but as for taxes and company pay rates I have given up and just accepted that it's math that I am not supposed to understand being none of it ever adds up when I do the numbers based on what they say Vs what I see as shown in this thread. You guys say ~21% but my math based on my W-2 says it's closer to 28%.

Now for me being a generic white guy? Well if you haven't figured that out by day to day life now try going back to college as a older than average 'generic white' adult once. You will learn real fast about who's skin color is really on the bad list for financial help but yet seems to be at the top of the list for paying out to whatever can be thought of real or imagined. Believe me I did a long time ago and it wouldn't surprize me if it wasn't incorporated into my pay and tax scales too in that area of odd things that don't add up yet no one can seem to explain to me either.

 

If you are going to figure how much you pay in taxes based on your W-2 and not based on your actual return, then just file a new W-4 that says that you are single with 20 exemptions. That would have reduced Box 2 and Box 4 to zero. I don't know what the amount in Box 14 was for on your form, since that is Other. There should be additional information somewhere indicating what that is for.

Of course, doing this will almost certainly make you realize that it's what your return says that matters!

As for the health insurance, just decline it.

 

I just work with what I got.

Couldn't decline it. I was married at the time.

 

Maybe I'm missing what the problem is but consider how your hourly rate - take home pay per hour - looks as you work more and more hours. Initially the rate goes up because the overtime rate is higher. With enough hours, it starts to level off at the higher overtime rate. But at the same time your tax rate is increasing, so instead of going flat, the hourly rate drops as your income raises your bracket. Your check still gets bigger, but your pay rate seems to drop.

 

TCM ....

I would agree your W2 shows alot more withholdings than you legally owe.

Box 1 - Total Compensation
Box 2 - Federal Tax Withholdings
Box 4 - Social Security Withheld --- your portion, Matched by your employer
Box 6 - Medicare withholdings --- your portion, Matched by your employer
Box 14 - Other ... probably your share of your medical ... or other things
Box 17 - State Tax Withholdings

Now, since you have filed your taxes, you should reduce those withholdings by the amount of your Federal and State tax refunds. Your 28% number will reduce.

from IRS instructions:
Box 14—Other. If you included 100% of a vehicle's annual lease value in the employee's income, it also must be reported here or on a separate statement to your employee. You also may use this box for any other information that you want to give to your employee. Label each item. Examples include state disability insurance taxes withheld, union dues, uniform payments, health insurance premiums deducted, nontaxable income, educational assistance payments, or a minister's parsonage allowance and utilities.

In addition, you may enter the following contributions to a pension plan:
(a) nonelective employer contributions made on behalf of an employee,
(b) voluntary after-tax contributions (but not designated Roth contributions) that are deducted from an employee's pay,
(c) required employee contributions, and
(d) employer matching contributions.

 

I remember years ago it was illegal in the UK to sell furniture on a Sunday, but you could sell vegetables. One enterprising person offered a pound of onions for 500 pounds sterling with a three piece suite thrown in.

 

TCM ....

I would agree your W2 shows alot more withholdings than you legally owe.

Box 1 - Total Compensation
Box 2 - Federal Tax Withholdings
Box 4 - Social Security Withheld --- your portion, Matched by your employer
Box 6 - Medicare withholdings --- your portion, Matched by your employer
Box 14 - Other ... probably your share of your medical ... or other things
Box 17 - State Tax Withholdings

Now, since you have filed your taxes, you should reduce those withholdings by the amount of your Federal and State tax refunds. Your 28% number will reduce.

How so? They took all that out of my paycheck and hit me for another just over $2000 more when I filed. There was no refund and to be honest once I passed the poverty level and broke into the as defined middle class income bracket I have never gotten a refund of any kind. Every year has always been a pay in for one reason or another.

When I get back into the oil field again and start working those hours at those pay scales it looks to me that I need to have more taken out so that I don't get hit with that having to write a check for more on top of what they took up front.

The thing is I don't look at it gross pay Vs whats taken out. I look at what pay goes in my pocket period. For all I am concerned they can say they are paying me $1,000,000 a year and taking $950,000 of it back and I just look at it as I get paid $50,000 a year since that's what I get out of it.

For me I have never looked at money as anything but a inconviniant necessity. I know it does for many but for me it just never made sense to chase after every nickle so I can say I have more of a useless item stashed away than someone else. I have no want or greed to have more than what pays the bills and pays for what I do want and need. What I look at is simply how hard and long do I have to work to pay for the things I have and want.

Sure extra pay for easy work is great, I can afford to buy more stuff with it that serves a purpose to me, but as far as serving any other purpose it doesn't rationalize for me to want more of something that in itself is basically a useless number on some piece paper or computer screen some where. If I want to see big numbers on paper or computer screens that what have pencils and calculators for.

 

The Social Security tax rate is 6.2% (for the employee). If your total compensation subject to SS tax was $99,102.54 then your SS tax should have been $6,144.36 (though it might be a bit different due to accumulated error from multiple payments). The $7,020.96 shown on your W-2 is consistent with $113,241.29 in SS wages. What does Box 3 of your W-2 show? If it shows $99,102.54, then your employer withheld $876.60 too much and you are entitled to that money back. First work with the employer to get a corrected W-2 and payment of the excess. If they won't work with you, then file IRS F0rm 843.

The Medicare tax rate is 1.45% (for the employee). If your total compensation subject to Medicare tax was $99,102.54 then your Medicare tax should have been $1,436.99. The $1,686.06 shown on your W-2 is consistent with $116,280.00 in Medicare wages. What does Box 5 of your W-2 show? If it shows $99,102.54, then your employer withheld $249.07 too much and you are entitled to that money back. First work with the employer to get a corrected W-2 and payment of the excess. If they won't work with you, then again use Form 843.

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

 

Capital gains are either taxed at your normal income tax rate (if short term) or at the long-term rate. If your marginal tax bracket is either 10% or 15% then you pay 0% in long term capital gains. If you are in the top bracket (39.6%) then your long term capital gains tax rate is 20%. All others (i.e., the 25%, 28%, 33% and 35% brackets) pay 15%. So that can't account for the overall tax rate being higher than the single rate. The big unfairness with the capital gains rate is that the money is taxed twice. First it is taxed at the corporate rate and then it is taxed at the personal capital gains rate. So money that is distributed as capital gains is often taxed at an effective rate approaching and often exceeding 50%.

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

 

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

You are in the 39.6% bracket and getting tax info from the Off Topic section of an electronics Forum? If it's on the Internet, it must be true!

 

You are in the 39.6% bracket and getting tax info from the Off Topic section of an electronics Forum? If it's on the Internet, it must be true!

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!