Death and Taxes

[Conan71]

quote:Originally posted by MichaelC

I guess that's that.

Conan, you're up.  

quote:Originally posted by Conan71

quote:Originally posted by MichaelC

quote:Originally posted by Conan71

Not true.

Link please.

http://www.irs.gov/newsroom/article/0,,id=109817,00.html

Here's the '07 tax table to see what the difference would be on this year's earnings when filing next year:

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

Keep in mind, the actual net tax rate at the 15% federal tax level (families earning betw. $15K and $77K) actually works out to just over 30%, taking into account employer contribution for FICA and SSI.

Assuming that's true (since I can never tell for sure what the IRS is trying to say), the only people that would pay at those rates, would be dependents.  Everything else is adjustable.  If you want the IRS to take that amount, you can do that by claiming Zero deductions on the W-4.  Most people claim at least one deduction, a large number of people even if single with no dependents, can claim themselves twice.  With one or two, that drastically reduces payroll deductions on the individual.

On the SE tax, let's just say I'm fully aware of it.

I'm not sure I'm catching what you are saying with "the only people that would pay at those rates, would be dependents".  Please explain.

Personally, my witholding works out to where I wind up owing a small amount to the gov't or I wind up giving them a very small, interest-free short-term loan. []

Regardless of the number of exemptions on the W-4, the FICA and SS taxes remain constant and aren't reduceable when you file your 1040.  

I'm Assuming from your comments you are self-employed, and I would assume your income tax range is 15% or higher.  So your net taxation winds up being 30+%, and you have all the compliance issues and new things to decipher in the tax code every year.  Sounds as if a Fair Tax would be in your favor, as well as millions of others.

Here's another reality which I've seen more than once is single "guest" workers claiming nine exemptions on their W-4.  There is nothing to prevent them from doing it, and I seriously doubt they wind up settling up on April 15.  The gov't still get's their full share of SS and FICA from them, but they get shorted big-time on the Fed. income tax.

[cannon_fodder]

quote:Originally posted by MichaelC


If there's no baseline for agreement on what is real and what is not, then there's really nothing to talk about.  I certainly could come at it from a different angle, but I'm really not looking for "The Fair Tax is 'Fair' because it has the word 'Fair' in it".

And I never made that argument. I don't think anyone has.  I even agreed to call it a ridiculously long name just to avoid that claim, but YOU kept calling it the Fair Tax.

I explained in great detail my position on the matter and answered many of your questions, to no avail.  You simply restated and reissued your questions whenever I answered them in a way that you did not like.  So don't pretend that I am the one avoiding discussion.  Discussion is a two way street, you haven't discussed anything - only attempted to quell the opposition.

I even ask what your main opposition was so that I might be able to enlighten you or, conversely, that you might be able to enlighten me.  You chose not to take me up on the offer and instead to continue maneuvering to make some grand "I got you" point.

Then you come back and imply that I failed to present an argument.

[MichaelC]

quote:Originally posted by Conan71

I'm not sure I'm catching what you are saying with "the only people that would pay at those rates, would be dependents".  Please explain.

 

It's a base rate.  If that is what we're assuming it is, claiming zero on the W-4 would get the listed amount deducted from payroll.  I'm not sure if I explained enough there.

quote:Personally, my witholding works out to where I wind up owing a small amount to the gov't or I wind up giving them a very small, interest-free short-term loan. []

That's the same with me, if I'm employed by another company.  I give as little as possible, and expect very little refund or payment due on April 15th.

quote:Here's another reality which I've seen more than once is single "guest" workers claiming nine exemptions on their W-4.  There is nothing to prevent them from doing it, and I seriously doubt they wind up settling up on April 15.  The gov't still get's their full share of SS and FICA from them, but they get shorted big-time on the Fed. income tax.

I understand that.  But a lot of that depends on income level too.  For example, if you are single and claim 2 W-4 deductions at 20K a year, you've maxed out your deductions pretty much.  It won't go much lower with 3 or 4 or a greater number.  The only way to rob the IRS beyond 2 W-4 deductions at that income level, would be to falsify a 1040, which we're assuming illegals won't even bother with.

[Conan71]

quote:Originally posted by MichaelC

quote:Originally posted by Conan71

I'm not sure I'm catching what you are saying with "the only people that would pay at those rates, would be dependents".  Please explain.

 

It's a base rate.  If that is what we're assuming it is, claiming zero on the W-4 would get the listed amount deducted from payroll.  I'm not sure if I explained enough there.

IOW- base rate, assuming no dependents.  Basically the people who like to use the IRS as a savings account.

My bonuses are payable quarterly, rather than to have them taxed at a higher rate if they are paid as a lump sum, I have them spread out over the next 12 weeks along with my base.  It would all wash out the same at the end of the year, but I have a problem giving interest-free loans.

The Fair Tax sounds like a good deal to me, but I don't want to base my enthusiasm soley on what I've heard a handful of Congressmen and a few comments on Boortz' show.  I think I'll buy the book and learn some more on it, or if I have time spend more time on the web site.

[cannon_fodder]

So after my argument with the IRS I requested a letter of explanation (they claimed I was out of compliance but would not tell me where over the phone).  They sent me the ENTIRE regulation guide for employment taxes as their letter of explanation.  

IRS - "You're wrong."
Me - I thought we complied.  Where were we wrong?
IRS - "We wont tell you where, and we will waive the fine, but you were wrong somewhere."
Me - If I was wrong, I want to make sure this doesnt happen again, where was I wrong.
IRS - "Somewhere."

Gee thanks.  It's damn near impossible to comply when I'm trying as hard as I can to give them their frikken money.  When you have to pay someone to figure out how to pay someone - the system is screwed.

[Conan71]

About the same experience I had this year as far as no help.  I tried to e-file.  It was rejected due to a dependent's last name not matching the SSN.  We claimed one of my daughters (yes, I had the proper paperwork from my ex) and my step-daughter who is living with us while going to school.

They wouldn't tell us which one was wrong.  I double checked the socials went ahead, printed my return and filed it.  I got a letter a couple of weeks ago stating the same thing about incorrect SSN, wouldn't say which dependent, and they very thoughtfully re-calculated my taxes for me- about an $1800 difference in their favor.

Turned out my ex was off three digits on my daughter's SSN.  Called the IRS and they corrected it.  It would have made it a little simpler if they would have just said in the first place which dependent didn't match up.

Pretty much they can't tell you where you effed up, just that you did and you have to figure it out on your own.

[cannon_fodder]

lol Conan, dont get me started on SSA.  They got my Son's card wrong at birth and my wife's card wrong since we have been married.

[Conan71]

quote:Originally posted by cannon_fodder

lol Conan, dont get me started on SSA.  They got my Son's card wrong at birth and my wife's card wrong since we have been married.

Amazing though, certain immigrants can get a new card overnight. []