Your TAXES

[Master of Energy]

My wife is self employed so she pays both employer and employee share. I split the quarterly estimated payments up and pay monthly with a reminder in my phone. It's the least hassle and doesn't sting as bad as making four larger payments. We still usually owe a couple grand at the end of the year if she has a good year.

With ST interest rates paying 5+%, I would keep my money as long as possible. Paying estimates early doesn't provide any benefit.

[MagnificentUnicorn]

I don't know but I think its a lot. Gas, sales, property, vehicle reg., licenses, entrance fees and so on.

FICA is about 25% of Federal Government Revenue and it is only paid on W2 income. So think about that when you a focused on Income Tax which is about 40% of Revenue.

Its a lot more complex than "rich people should pay more tax and do it with a smile". Perhaps we get what we deserve but we've basically accepted an unacceptable decree of incompetence from the federal government. This is where we should look in order to make progress. Accepts its all, "old vs. orange" "left vs. right" "right vs. poor".

I don’t think the rich should pay a higher percentage of their income(any source) they should just pay period. If you make more than a certain amount you pay a flat rate regardless, no loopholes, exemptions etc.

It’s not the government that’s incompetent, it’s the elected politicians that pander to lobbyists and vote for their districts/states at the expense of everyone else.


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[Conundrum]

Between this and the what is too much risk thread, looks like we’re proving the old adage of three certainties in life, death, taxes and arguing in circles on the web.

[old goat]

I don't know but I think its a lot. Gas, sales, property, vehicle reg., licenses, entrance fees and so on.

FICA is about 25% of Federal Government Revenue and it is only paid on W2 income. So think about that when you a focused on Income Tax which is about 40% of Revenue.

Its a lot more complex than "rich people should pay more tax and do it with a smile". Perhaps we get what we deserve but we've basically accepted an unacceptable decree of incompetence from the federal government. This is where we should look in order to make progress. Accepts its all, "old vs. orange" "left vs. right" "right vs. poor".

Agree re FICA--tax every dollar of every type of income. As it is, it's a regressive tax.

Re govt incompetence--sure there are plenty of examples, but consider Medicare. Administrative costs are 5%, 95% is payments to providers, including Pharma. Private health insurance--administrative costs and profits average 25%, 75% goes to providers. One can argue that both are paying too much to providers, but at least in terms of efficiency and competence the govt is doing pretty well. Yes, some people scam the system but the govt is pretty good at catching them. (That's because medicare scammers are small fry, unlike the big fish scammers who get buildings named after themselves.)

[TahoeJ]

I don’t think the rich should pay a higher percentage of their income(any source) they should just pay period. If you make more than a certain amount you pay a flat rate regardless, no loopholes, exemptions etc.

It’s not the government that’s incompetent, it’s the elected politicians that pander to lobbyists and vote for their districts/states at the expense of everyone else.

I’m a fan of the flat tax. It would cut out so much BS and while it’s fair to argue that it could unfairly impact low income earners, the flip side is the wealthy would end up paying way more than they do now due to so many loopholes. It would overall be a huge net positive for society. Where would we set that line? I’m not sure but I think 10-15% is a common proposal. This would also coincide with less sales tax (or none on essential items), which already hurts low income earners way more.

[skaredshtles]

I’m a fan of the flat tax. It would cut out so much BS and while it’s fair to argue that it could unfairly impact low income earners, the flip side is the wealthy would end up paying way more than they do now due to so many loopholes. It would overall be a huge net positive for society. Where would we set that line? I’m not sure but I think 10-15% is a common proposal. This would also coincide with less sales tax (or none on essential items), which already hurts low income earners way more.

Seems like a flat tax that only starts at a certain income threshold would be the ticket?

[neufox47]

Seems like a flat tax that only starts at a certain income threshold would be the ticket?

Yes this or just provide a large standard deduction and that’s the only deduction you get. Tax all sources the same, capital gain or income. Also redo the AMT to tax people who take out “loans” against their assets to fund their life I.e. Jeff Bezos. If your assets exceed $10m then you should not be able to avoid taxes by living on loans that will never be paid back until you are dead.

[skaredshtles]

Yes this or just provide a large standard deduction and that’s the only deduction you get. Tax all sources the same, capital gain or income. Also redo the AMT to tax people who take out “loans” against their assets to fund their life I.e. Jeff Bezos. If your assets exceed $10m then you should not be able to avoid taxes by living on loans that will never be paid back until you are dead.

Seems like a tax on financial transactions would also be some low-hanging fruit. Every credit card transaction, stock/bond/mutual fund/ETF transaction?

Disclaimer: I've not give much thought to these suggestions.

[Bunion 2020]

I don't know but I think its a lot. Gas, sales, property, vehicle reg., licenses, entrance fees and so on.

FICA is about 25% of Federal Government Revenue and it is only paid on W2 income. So think about that when you a focused on Income Tax which is about 40% of Revenue.

That figure will vary quite a bit, state by state. Isn't FICA a combination of employee & employer contributions.

For both of them, the current Social Security and Medicare tax rates are 6.2% and 1.45%, respectively. So each party – employee and employer – pays 7.65% of their income, for a total FICA contribution of 15.3%. To calculate your FICA tax burden, you can multiply your gross pay by 7.65%.

With ST interest rates paying 5+%, I would keep my money as long as possible. Paying estimates early doesn't provide any benefit.

Other than the Fed and State requires them for 1099 income.

Who must pay estimated tax. Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

[Kevo]

Regardless of what should or shouldn't happen from a tax policy standpoint, I think the US government is going to need to raise taxes pretty drastically to service debt at some point in the not too distant future.

[Bunion 2020]

Regardless of what should or shouldn't happen from a tax policy standpoint, I think the US government is going to need to raise taxes pretty drastically to service debt at some point in the not too distant future.

Probably so. Cutting spending will not do it alone.

[MagnificentUnicorn]

I’m a fan of the flat tax. It would cut out so much BS and while it’s fair to argue that it could unfairly impact low income earners, the flip side is the wealthy would end up paying way more than they do now due to so many loopholes. It would overall be a huge net positive for society. Where would we set that line? I’m not sure but I think 10-15% is a common proposal. This would also coincide with less sales tax (or none on essential items), which already hurts low income earners way more.

That’s why I would propose no income tax for low income people. We just need to decide what threshold that would be. Most households that have an income lower than $50k don’t pay much if any income tax as it is.


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[MagnificentUnicorn]

Yes this or just provide a large standard deduction and that’s the only deduction you get. Tax all sources the same, capital gain or income. Also redo the AMT to tax people who take out “loans” against their assets to fund their life I.e. Jeff Bezos. If your assets exceed $10m then you should not be able to avoid taxes by living on loans that will never be paid back until you are dead.

No deductions for the people that make over say $50-60k household income. Of course just not taxing these folks would be easier


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[Master of Energy]

Other than the Fed and State requires them for 1099 income.

I didn't say don't pay them. the poster I quoted said he pays them monthly instead of quarterly. That is stupid

[Bunion 2020]

Missed that. It is stupid.

[riser4]

With ST interest rates paying 5+%, I would keep my money as long as possible. Paying estimates early doesn't provide any benefit.

I didn't say don't pay them. the poster I quoted said he pays them monthly instead of quarterly. That is stupid

There are other benefits besides money. It reduces our stress levels. And when we started doing it, interest rates were basically 0. It is worth another look, but my sanity is worth a lot. It avoids IRS penalties and having to nail down a bunch of cash. Once the IRS has it, we can't spend it on something else. I spose I could open a money market account somewhere, pay into that monthly and pay the taxes from there. I need a roundtoit to accomplish that. Got a spare roundtoit?

[neckdeep]

Regardless of what should or shouldn't happen from a tax policy standpoint, I think the US government is going to need to raise taxes pretty drastically to service debt at some point in the not too distant future.

Sure, and then the post office will issue a stamp memorializing the baby boomers as the most selfish greedy assholes ever to walk the earth.

I mean, why raise taxes when you can just magically reduce debt via inflation and also send rich people's asset values sky high? That's been the underlying basis for the American economy ever since the Reagan era. Who's going to raise taxes? The person who never wants to be elected again? Fat chance.

Taxes will go up if the GOP is reduced to a rump party. Until then, it is not happening. It is an actual GOP policy to put everything on credit and keep the nation hovering on the edge of bankruptcy. It's a well documented political strategy euphemistically called "the two Santas strategy", brought to you by the same psychopaths who still push the "trickle down theory" of tax policy. Look it up.

[skaredshtles]

<snip> I spose I could open a money market account somewhere, pay into that monthly and pay the taxes from there. I need a roundtoit to accomplish that. Got a spare roundtoit?

If you have a brokerage account somewhere (for retirement, perhaps?) it should be super-simple to get a MM account rolling...

[liv2ski]

Probably so. Cutting spending will not do it alone.

Cutting spending??? OMG that is so funny. Are you here all week?

[Diamond Joe]

Have always set things up to be about neutral….no payment/ little bit of a refund……this year all of sudden a 2000.00 payment……ridiculous.

My college age kids even have payments…..which is like unheard of.

This has all of us saying wtf?……

So did your accountant shed any light?? We're in the same boat. Both have been in the same jobs 15+ years, same house for over a decade, same fucking EVERYTHING. Every year, we get a modest refund, a couple grand usually. THIS year, despite nothing changing, not only are we not getting a refund, but we owe. And not only do we owe, which has never itself happened, but we owe close to 4 grand?!?

[Danno]

So did your accountant shed any light?? We're in the same boat. Both have been in the same jobs 15+ years, same house for over a decade, same fucking EVERYTHING. Every year, we get a modest refund, a couple grand usually. THIS year, despite nothing changing, not only are we not getting a refund, but we owe. And not only do we owe, which has never itself happened, but we owe close to 4 grand?!?

Have you compared tax returns, i.e. 2023 with 2022? Is it possible that something changed at the employer end, they withheld less taxes, but you didn't notice the extra in your paychecks? IOW, did what get withheld change and you ended up owing, but your overall annual tax burden didn't change? Or was there a significant change in your tax burden?

[Diamond Joe]

Have you compared tax returns, i.e. 2023 with 2022? Is it possible that something changed at the employer end, they withheld less taxes, but you didn't notice the extra in your paychecks? IOW, did what get withheld change and you ended up owing, but your overall annual tax burden didn't change? Or was there a significant change in your tax burden?

It would certainly be helpful to compare this years return with previous years, and I appreciate the advice on what to look for, but since my wife does the taxes, and her filing/organizational habits can best be described as "racoon on meth", we have not (yet) been able to locate where our previous years (physical) tax paperwork ended up. She has also not been able to figure out where the previous returns were saved, and is wondering if they were lost when she got a new computer a couple of months ago

Pretty sure you can get your previous years returns from Turbo Tax (who we've always used) but when I suggested that I was informed that she would look into that "when she has a minute". OK! Standing by.

[Conundrum]

Yes, turbo tax has prior returns. Good luck with the meth.

[riser4]

Meth? You have my attention.

[concretejungle]

Yes, turbo tax has prior returns. Good luck with the meth.

And you get to answer a sweet question about why you want your previous years tax return. "Because, fuck you, that's why." I hope that makes it to an actual employee.