Single person LLC, she is a CPA that only does taxes, Bozeman.Quote:
Originally Posted by Master of Energy
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Single person LLC, she is a CPA that only does taxes, Bozeman.Quote:
Originally Posted by Master of Energy
https://media.giphy.com/media/v1.Y2l...STF8/giphy.gifQuote:
Originally Posted by Mustonen
I returned home to my dorm room, long ago, upset because I hadn’t passed my math placement test for 111. I had already been at the university for 2 years and had not taken a math course since AP Stats my junior year of high school. My roommate, a mathematics major, was the first person I vented to. His reply, without a hint of irony, empathy, or any other sign that he indeed possessed some social and emotional intelligence was, “well, you just need to learn how to think.”
I figured my shit out. Thank you to those that provided help or humor.
The taxable income for this W2 was the full amount earned because the standard deduction had already been applied to my first W2. This is what I had failed to originally understand because we have only filed for a standard deduction the last four years, and only one of those years I had an additional W2. That prior filing, no income taxes were withheld form it, so for this W2 I had intentionally set withholdings very high. Basically, I chose to work this job to fund the tax bill I knew was coming.
Here’s the number, all relating to Fed. Income (both taxable and total) $2834. Taxes owed for this income $623 (marginal tax rate of 22.98%). Taxes withheld $2099.07. Therefore, $1476.07 was applied to my overall tax burden reducing our currently forecasted taxes still owed at $7xxx.
My effective rate with this income is 16.06% and if I were not to have had it, it would have been 15.95%
True net take-home for this pay was $1,694.01; give or take a little as we itemize for state returns. Estimated hours of work for this income 10 hours a week for 11 weeks, 110hrs. Hourly wage for this work $15.40. Personal utils, on a scale of 1-10, 3 because I was able to double dip and earn some graduate credits, of which I had to pay for. Because I no longer have a need to earn more grad credits, I will probably be turning this work down in the future. However, I will need to think on the potential social capital before doing so.
Overall lesson learned from this year’s tax picture: we need do whatever we can (excluding my hyperbolic tax shelters) to get back to itemizing deductions. I think will start with changing retirement contributions.
Back to the roommate’s assertion. “… you need to learn how to think.” Even when ignoring the various social emotional intelligence, there is a logical fallacy within the roommate’s position. By stating I need to “learn how to think” he implied that there is a binary way to think, how to think and how not to think. Thus, the black and white fallacy and not sound logic on his own end. It’s a good thing we still had two more years of undergrad, grad school, and a lifetime of learning ahead of both of us because we both showed a need to work on “how we think.”
So glad I don't deal with money I got a guy that charges me 420 a month to take care of my money he's helpful I couldn't imagine filing taxes that's like serious brain rot best of luck to all of you this tax season
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Now they have your social security number.Quote:
Originally Posted by Master of Energy
He at least gives you something on a piece of paper showing where you stand each Q, even if it's handwritten?Quote:
Originally Posted by fastfred
Probably just texts a thumbs up or down on a monthly basis.
Sounds like you're getting a good handle on this stuff.
Standard vs. Itemize, very little of that is within your control. It is what it is. Charitable donations are a good one, but other than that, you'd be letting the tail wag the dog to try to get to itemizing. Retirement contributions don't impact standard vs itemize at all. If you're on the fence, you can try to "bunch deductions" and alternate standard vs itemize every other year. You'd pay property taxes 3x in one year and 1x in the next year (rather than typical 2x every year), for example, but many people can't do that (either escrow or the county just doesn't allow it). Standard deduction is fine. Yeah it felt like a raw deal for those that end up with a list of itemized deductions that fall just under the new standard deduction (I'm in the same boat) but it is what it is. At least I don't have to bother keeping receipts for anything. "Can I print you a receipt for your donation?" me: "nah pitch it". 90% of people take the standard deduction now, and the whole point was to simplify taxes a bit. A good thing.Quote:
Originally Posted by Hood26
Keeps things simple. I like that.Quote:
Originally Posted by Conundrum
Standard VS Itemized, if self employed:
https://www.keepertax.com/posts/can-...iness-expenses
Every month I get a report suppose to understand itQuote:
Originally Posted by Timberridge
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Eh, the Fed is already political and has been since at least Greenspan. They're definitely wonkier and semi-independent, but there was a reason Powell didn't raise rates more during Trump, and it had nothing to do with with the conditions.Quote:
Originally Posted by Hood26
Is it possible you could millionaire many times over and just not realize it based on the complexity of the report?Quote:
Originally Posted by fastfred
Right again Bfree on the retirement funds, I should have been more clear I want to first adjust retirement to get that taxable income lower (try and stay in the 22% bracket since we are projected to enter the 24% as is) and thus help the standard deduction be more impactful. I am interested in exploring SALT more; don’t think it will apply, but Oregon takes a good chunk; side note the Oregon Kicker will save us a little this year. Also true about trying to get back to itemizing could be the tail waging the dog, but there are a few to explore nonetheless.
Fastfred, I hope your advisor is helping you stay within the 50/30/20 rule. 50% for what you need, 30% for what you want (think dining out and personal and recreational and vacation) and then 20% should be investments. $420 a month is considerable, so hope you are getting your monies worth and he has his costs not justified as a need.
Ha...I do my own bookkeeping but the CPA keeps me compliant. I simplify shit as much as possible to try and keep my bill down. S Corp is pretty manageable.
Once a quarter they ask a couple of questions and email back how much the is gonna come out of my account. Minimizing your tax exposure is smart. Spending money on things you don't need to pay less taxes is stupid.
Business tax deductions is basically on the honor system. At the Fortune 500 Level salespeople fly half way around the globe to go to a conference, play golf and eat steak dinners. All considered business expense. Hillybilly contractors take Friday off and go snowmobiling with their friends. Whats the difference?
Ha...I do my own bookkeeping but the CPA keeps me compliant. I simplify shit as much as possible to try and keep my bill down. S Corp is pretty manageable.
Once a quarter they ask a couple of questions and email back how much the is gonna come out of my account. Minimizing your tax exposure is smart. Spending money on things you don't need to pay less taxes is stupid.
Business tax deductions is basically on the honor system. At the Fortune 500 Level salespeople fly half way around the globe to go to a conference, play golf and eat steak dinners. All considered business expense. Hillybilly contractors take Friday off and go snowmobiling with their friends. Whats the difference?
Hmmm…. Core PCE (the Fed’s preferred inflation measure) increased at an average rate of about 1.7% from Jan 2017 thru Jan 2020 (then Covid hit). The Fed’s inflation target is 2%, so they were running below target. Why would they have raised rates?Quote:
Originally Posted by schuss
On the other hand core PCE is now back down to 2%, and has been trending down for a reasonable amount of time. Fed should have cut.
I always like the wide lanes in our threads. We have the ability to bounce freely between macroeconomics and mountain town advisory fees.
The overheated housing market and other bad market behavior from the prolonged zero or near-zero rate environment? Like you just have to look at the current clusterfuck of housing, technology companies and other areas to see how it was just a shitstorm.Quote:
Originally Posted by J. Barron DeJong
Respectfully disagree. Plenty of time to make certain inflation is trending the right direction.Quote:
On the other hand core PCE is now back down to 2%, and has been trending down for a reasonable amount of time. Fed should have cut.
The Fed has a legally mandated goal when setting monetary policy: low and stable inflation, and full employment.Quote:
Originally Posted by schuss
So even if they wanted to take into account how low rates affect certain markets, they aren’t legally allowed to.
But, assuming they could, you have to consider the counterfactual of what would have happened if they had raised rates: likely tens of millions more unemployed, slower economic growth, slower wage growth (especially for low earners, who finally closed some of the inequality gap during those years), possibly recession, maybe deflation?
Just because low rates caused some undesirable outcomes doesn’t mean higher rates wouldn’t have caused different more undesirable outcomes.
It’s just my opinion (and the opinion of many people I trust) so no issue with disagreeing, but I’m concerned they’re getting way behind the curve. Inflation has been falling very fast, it’s basically down to where they want it (though data is noisy month to month, so can’t be 100% certain), and unemployment has been trending up.Quote:
Originally Posted by Bunion 2020
Given the lags in effect, and that the current rates are well above the expected long run ‘neutral rate’ I think they could have easily justified a cut.
Assuming inflation is under control, chose your favorite metric, what general level of interest rates would do the most to combat wealth inequality? Too me, that is a bit of the unspoken challenge. A well performing economy appears to be benefiting fewer and fewer. It sure seems to me that the asset owning class keeps winning and everyone else keeps losing.
The lowest possible rates that keep inflation in check. That’s the rate that maximizes employment.Quote:
Originally Posted by Foggy_Goggles
Not having a large pool of unemployed workers is what forces employers to fight for workers - especially low-wage workers - by raising wages.
I keep hearing 30yr mortgage rates of about 5% as the number that could get many of us in “golden handcuff” low rates to be interested in moving or investing in a rental property. 5% too seems accessible to a lot of first time buyer. Easiest accessible asset that brings the greatest benefit is home.
Federal Funds Rate is sitting 5.25-5.5 and has had 11 recent increases to get here.
I know I don’t know it all, but I think it’s time to slowly get back on the throttle since inflation has slowed and consumer confidence has improved.
I also know every time I show my wife a house for sale she is like, eh maybe if the rates get to 5sh.
She's telling you she doesn't love it. I think we've been so conditioned with abnormally low interest rates, we've forgotten the 30yr fixed has averaged about 7.5% since 1972 or so.Quote:
Originally Posted by Hood26
H&R Block charges like a grand for that and they ain’t cpas.Quote:
Originally Posted by Bunion 2020
assuming she does a good job you should never leave
So the increasing wealth gap during historically low rates were not connected? Honest questions. I guess my opinion is that objectively, the system does not appear to be working for many. And that's not to say the Fed either can or should do anything about it.Quote:
Not having a large pool of unemployed workers is what forces employers to fight for workers - especially low-wage workers - by raising wages.
Its just an observations that while the economy is "good" more and more people seem to be "not good" financially.
I remember my folks trying to manage a variable rate mortgage at 22% in late 70’s/early 80’s. And this was when value of median wage was far greater against the average cost of purchasing a property.Quote:
Originally Posted by Timberridge
I’m pretty confident that the low rates was not what caused increasing inequality.Quote:
Originally Posted by Foggy_Goggles
The period of low rates was to try and bring back workers:
Attachment 485157
That massive drop in employment after 2008 is what depressed wages and increased inequality. Inequality finally started coming down ~2017 when employment finally got to a high level again.
(Note that the continual increase from 1950 was basically women entering the workforce. And the huge negative spike in 2020 was Covid layoffs.)
But low rates do tend to make the stock market soar, which I imagine is a large driver of inequality
Yeah, but at the same time, the cheap money era bid up housing prices. Health care, higher education, food and many of the other expenses of the working/middle/choose your term seam to be increasing at a greater rate than income (for the same class).
I don't have statistic or links or so on, but my cut feeling is that quality of life my many metrics is declining even when the chosen economic metrics seem positive.
Both things can be true. Companies hired a lot when rates were excessively low, but there were also covid money making programs being utilized too.Quote:
Originally Posted by J. Barron DeJong
At the same time, the investors and moneyed classes were making money in the market and buying up real estate w near zero interest loans
I want to be clear that I agree that there is an issue with the major economic inequality in this country, I just don’t believe at all that that’s due to the Fed being too loose with monetary policy since the Great Recession.Quote:
Originally Posted by Foggy_Goggles
Regarding house prices, yes low rates cause prices to rise, but that’s (partially) because they were becoming easier to afford because of those low rates:
Attachment 485161
Health care has been increasing, but the cost curve has actually bent down, and by more than anyone was predicting when Obamacare was passed. (Sorry, can’t find that chart, but saw it a week or two ago.)
I think a major part of wealth inequality is due to policy outside the Fed though: income tax cuts favoring high earners, tax breaks, low capital gains tax, joke of an estate tax, etc.
For the Fed’s part though, I wish they would err on the side of too low vs. too high rates to err on the side of maximizing employment vs. minimizing (and often undershooting) their (arguably too low) inflation target.
Regarding inflation in general: Service inflation increases at a faster pace than Goods inflation in a wealth country because domestic service workers become higher and higher paid, and unlike manufacturing, that labor can’t as easily be substituted with technology or by importing from lower wage countries, so areas like education are going to see higher than average inflation, though even higher education has (I believe) been seeing a slowdown.
Edit: shit like this (currently making it’s way thru congress), done over and over again, is the driver of inequality:
Attachment 485164
Yes, a faster growing economy is good for profits, and being able to borrow for less is good for profits.Quote:
Originally Posted by bfree
But trying to keep the stock market low by having more people unemployed, and wages suppressed seems like the wrong way to go about trying to reduce inequality to me.
I would not trust a guy who charges a 420 every month to take care of my money. For obvious reasons. (U assume you left the dollar sign out on purpose.)Quote:
Originally Posted by fastfred
If you have a bunch of cash lying around and want to take advantage of the charitable deduction, you can put a big chunk in a donor-advised charitable fund one year, take the deduction and any other itemized deductions you have, and then make your contributions from the fund every year until you empty it.Quote:
Originally Posted by bfree
Boots with bootstraps are more accessible in low interest environments.
The mean effective tax for the 25 richest Americans for the years 2014 to 2018 was 15.8% (Propublica)
2018 really helped their average with an effective rate of 13.3%
Shifting to corporate tax. In 2021 19 of the Fortune 100 companies, despite being profitable, claimed little to no taxes. Here are some sample effective tax rate percentages Amazon 6.1 Exxon 2.8 Ford 1.0 UPS 9.9 Nike 5.9 GM .2 AT&T -4.1 (Cap20)
For the year 2022 The S&P 100 US Fed average was 17.1% and their average when including international taxes was 23.84%
This means that many of in this thread have paid higher effective rates than the ultra wealthy, and those of you with businesses have paid higher effective rates than many of Americas largest corporations.
How does this affect our conversation on the wealth gap?
Thanks JBD, I think we probably agree on most thinks. That said I think that that generically talks about income is possibly skewed by high income. And how that I think about it, wealth inequality is probably not really the issue I'm interested in.
I actually don't have a problem with the rich getting richer is the rising tide floated all boats. Socioeconomically, I think more and more people just ain't makin' it. And if it were my circus, the conversation would be highlighted on the stereotypical family a 4 with 2 working adults and what we as a society want life to look like for them. In the short term, tax and fiscal policy seem like they could address this.
Don't these two statements somewhat contradict each other? If tax cuts for the rich are fire, something like a fraudulently low interest rate seems like gasoline to allow those already well off to increase leverage to create more means to make lots of $. Add the items you mentioned (tax cuts) and they are not only getting tax benefits for income and "normal" investments but also for the extremely lucrative ones like derivatives which most common folk don't even consider playing.Quote:
Originally Posted by J. Barron DeJong
Well, that was incoherent. You did nothing to address the presumption that low rates are meaningfully better for those who have money than those who don’t, in spite of calling them fraudulent.Quote:
Originally Posted by Shaaarrrp
What axe you grindin here?
Don’t forget that low rates bring houses, cars, etc into the reach of more people. And it’s a grade A bitch to find margin when you’re bouncing against a hard lower bound of zero percent.