Taxes fcuking taxes

CPA, change your witholding. And for the love of God, don't withdraw your retirement money. When the economy is in recession, you need to be DUMPING money into your retirement account, not taking it out!

Just take no deductions and get it back in the return. It's less hassle that way.

As for feeling like your money doesn't go as far, it doesn't. It's not that people in this country are making less gross dollars, it's that inflation has gone crazy over the past three years during this economic downturn. The government statistics don't show it, but the average US wage has DECLINED since the 70s. People make more dollars on paper, but those dollars buy less, which is what matters.

You can thank deficit spending on endless wars and bank/auto bailouts along with the huge trade deficit we've been running for the past 25 years for that.

 

I'm thinking that's his household income and he got married. Also, some of that was spending his retirement.

 

yes i understand that, but how can u jump 40 grand each year for the 3 years.?

 

What you want for investment purposes and lower your tax hit on withdrawal is called universal variable life with a guaranteed wash loan provision.

Generally universal life is a suckers bet. This is not standard life insurance but a tax-free investment under an insurance umbrella and is only worthwhile if you have extra cash you can consistently invest monthly.

Basically insurance isn't taxed as income. This is a form of life insurance where your payment is invested as you direct. You can claim prepayments on the value of the insurance as a wash loan as you wish. It's your value, you don't have to pay it back in this case, you just lower the net value of your coverage. Thus the variable and the wash loan.

I'm no tax pro nor investment pro, and last I looked into this was some years back so things might have changed. But it was way cool back then.

 

Did you not pay any tax on your income throughout the year? Seems odd that you'd owe that much at the end of the year, even with the withdrawals. Definitely talk to an accountant.

 

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61k - Him by himself.
101k - Gets married, add wife's income, possibly a raise for him as well.
150k - Both he and wife get yearly income increase, withdraw some IRA funds. Perhaps one of them changes jobs/careers, jumping salary considerably.

There are plenty of ways to do it. Think a little.

It depends. He could also be getting fucked by the AMT. I don't know the details of his finances, but 15ish k on 150k is nothing, and I imagine he HAD to pay some tax on his income during the year as well.

 

Yeah, I guess looking at it, at $120k (I'm just throwing that number out there) for income before the withdrawals, I guess your tax rate would probably be in the 40-something percentile. Man, that sucks. But I agree with everyone else - the withdrawals killed you. Good luck getting everything paid off, and hopefully you avoid it in the future.

 

Taxes and the IRS are a joke. They should just flat tax us. I have been making less than half than I usally due. But also got back less. There should be a link to find a good acountant. I know one in Huntsville. I will use him next year. I really don't trust the turbotax anymore. In was also a real pita to install this time.

 

Flat tax makes sense for the middle 80%...the bottom 15% and top 5% would shoulder an undue burden.

The current bracket/deduction system is a mess though. There should be maybe 4 brackets and no more than 20 deductions at most.

Really though, any tax system would work FINE if our "elected" "representatives" actually had to budget. But their spending methods are a reflection of America: Spend it all (and more) now and don't worry about the consequences.

 

Just change your withholdings. If you end up having to send in $15k, it's b/c you didn't have enough held from each check. The IRA withdrawal hurt you, too, but you should have seen that coming. (Your post, at least, indicated that you knew you'd have to pay tax.)

If you really think you'd be better off w/o a job and depending on the gov't, go ahead and try it.

 

1. I would rather owe than get money back. Why should I give them an interest free loan, then get it back only to have to figure it back into the next year as income?

2. Everyone should have to work for one year as a 1099 contractor. Pay both halves of your SS Medicare/Medicaid and all federal and state taxes. Then pay your own unemployment insurance, workman's comp etc. Then add to that, if you want a vacation, you need to plan and budget for it because when you are not working, you are not getting income. The whole discussion would change.

3. If you actually total up what you pay in income and hidden taxes through the year you would puke.

Tea anyone?

 

He might Hire you when you can spell HIRE....

 

Not sure I follow here. Care to elaborate on the "figure it back in as income"?

 

Every year it never fails- Most of the folks you talk to around Tax Season go "I can't wait to get my Tax return so I can buy ....." Why give to the gov't for a year and then get excited when they give back what is yours anyways??

 

1. 56k + bonus - self
2. 100+k - Married (combined income with wife)
3. 150k - lost my job in this economy but found another one paying $20k more, cashed out of $20k Rollovers (paid off some bills) + wifes income increase.

I'm an auditor, I saw the 20% coming for the $20k in rollovers but still that's only $4-5k that I was prepared to pay. But damn where did the other $10k come from. I paid taxes last year but not nearly as much as what Turbotax is saying I owe. I know AGI is the key and I could get creative here but I don't want to do that I want to be able to lower the tax burden legally.

Oh yeah, we have no dependents and as of right now rather heathly and we are both done with college. I do have a Bulldog but I don't think he'll qualify for the EIC credit.

Thanks for the comments.

 

Also, how great is like the triple and quadruple taxation we have in our society?

Take your Taco as an example. When you earn the money you'll use to buy your Taco, the gov't taxes it. And then, when you buy your Taco with after-tax money, there's sales and/or road use tax on it. And then every year, they're going to charge you property tax (again, after tax income) just to have it. And then, if you sell it, they're going to charge you capital gains (if you modded the shit out of it) or at least income tax for what you get for it.

And these fuckers still can't balance a budget. Sad, isn't it?

Because the only way people save money in this country is when someone else does it for them. They're too weak willed to actually save it themselves. They don't seem to realize that if you have a good chunk of money in savings you can act as your own interest-free creditor...if you have the discipline to actually pay yourself back before buying something else outside your monthly disposable income.

 

Agreed!

 

^yes!

 

This the kinda of stuff I'm looking for, I know there are all kinds of ways to lower taxes..........never heard of this but I'll check it out.