Who here has finished their taxes?

The Coffee Shop
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Stayed up late last night and completed them. Turbo tax, along with Quicken is a beautiful thing. I still can’t figure out how you can screw up on your taxes with these products. In light of the news of our spending bill getting passed and such. I know in my heart my tax rate will be increasing at some point in the future…2008 was one of my best years despite the economic downturn. The only deductions I can use at this point are 401K savings, mortgage interest, charitable deductions. I have 3 kids, but I guess I am too “rich” to get a tax credit. My wife stays home, but it seems I am too “rich” to get to deduct her IRA. But I did get the opportunity to learn about AMT, thank you congress. My effective tax rate has increased pretty drastically from 2007…when you add SSI (both my share and I am an owner) and Medicare (both sides too) it came in at 29.77%. Of course this doesn’t include anything on the state level, sales taxes, property taxes, etc.

So in light of all this, I just what to tip my glass to our leadership and say “Cheers”

2

I have!

And my refund has already been deposited in my bank account.

3

Just submitted mine yesterday.

4

I haven’t done mine yet because I haven’t gotten all of my info.

Hey if your wife has time she could start a home business and you could probably cut your tax bill in half.

5

I have!

And my refund has already been deposited in my bank account.

Same here!

clm

6

Yay refunds!

7

I think I will skip taxes this year :wink:
.

8

Nope. Still waiting on a brokerage acct statement. They’re delayed for some reason.

No biggie…it won’t go in with the check until April 15th anyways. I work hard to avoid getting a refund! :wink:

9

I did mine last weekend. And I didn’t pay a penny to file!

10

While I haven’t done mine yet, I did review 15+ returns today as part of our local United Way’s Volunteer Income Tax Assistance program. 9 to 3 on the warmest Saturday of the year. Not exactly how I had it planned out. :-/

11

I am done with the hard part (reviewed and classified all receipts, determined all long and short terms gains and itemized my deductions), but I do paper and I will not file until at least Mid-march. If you file early and/or electronically you greatly increase your chances of getting audited.

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The tax code is ~67K pages long. I completely and totally understand how people screw them up. I started a thread about household help and there were multiple opinions, none of which agreed with each other.

Do you have to track all purchased made that did not have state tax applied, and then pay the state sales tax to your state? I wouldn’t even know where to begin…

I’d bet a burrito, that there is not one filer in the whole country, that does not have some sort of error on their tax return.

Did I read that right that your federal tax burden is ~14% of income? Doesn’t seem too bad for a high income…

Also, if self employed, I’d bet there is at least a little bit of grey in your business expenses.
Here’s my response to a thread a while back,

Here goes. You’ve gotten a lot of hypothetical answers. I’ll give you some actual numbers.

The BS, if you will, with the US tax system, is that it is designed to have all sorts of legal loop holes. The big ticket deductions are 401K (retirement contributions) ($15.5K/person/year), mortgage interest deduction (on everything up to $1M in home value - on a 300K mortgage, this will be ~$20K), real estate taxes deduction (~$6K on 300K home), job expenses (including education if its job related). That’s ~$60K in deductions before you even get into the $3.4K/person deduction.

I think that gross income could be in the $225 range before you had a taxable income of ~$150…

Income (picked a year that was close to your number, during the Bush tax cut years)

Married filing jointly with one child

Total Fed Tax % (Fed Taxes/Gross Income) = 8%
Total State Tax % = 2.5%

Property taxes in VT on a $300K home would be $6000

We also have sales tax on everything but food and clothing of 6%

The marginal rate (every $ above that) would have 28% fed, ~7% state, 0%SS/medicare. You need a taxable income of ~$173K to get to the 35% bracket, which would put you in the Gross income range of ~$250.

13

just made an appointment with my accountant!

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My federal income tax effective rate is 18%, when you add in the FICA/Medicare (I pay 13% on for first 100K or so and then just medicare on up) its around 30%, the only reason why its that low is we give about 20% of our income away and I max out my 401K, I don’t own much house so the interest deduction is not very much. So yes I made about 250K, but I live on much less. With other burdens, I am probably paying around 35-37% - and I live in a low tax state. The year before I made about 175K, my effective tax rate was considerbly less. The way to look at this is your TOTAL tax burden, not just your federal income tax.

Whats interesting to me is as I expand the company and take on more risk, the tax burden on each dollar at the margin is insane - why should I grow the company? We have having those discussion now; at what benefit/risk level does the effort not make sense. I just think this idea of taxing income is so out of date. Its an incentive killer. We should tax consumption with prebates for those below the poverty line, forget about income.

As far as the grey area…there really isn’t much. I guess I get to eat our on the company but its only for business meals…which you only get to deduct a small %. Most of my travel is air fare. My life insurance is covered via work. I don’t belong to a country club or have any dues deducted.

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Coming from someone who benefits tremendously from our current code (I take advantage of every deduction they’ll allow), my main problem is that a single guy with no deductions earning $75K/yr pays more in Fed taxes than I do, with a Married filing jointly status, lots of deductions and an income of more than 2X the single guy’s… Not that life is fair, but I have a bit of a problem with all of the loopholes. That said, I’d bet that if we had a flat tax, both you and I would pay more than we do now.

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FWIW - I just installed TaxCut. Went to the “household employee” section. Clear as mud.

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I probably would pay more under a flat tax or under a consumption tax but then it would be a whole lot more transparent. If I knew that each additional dollar I earned wouldn’t be taxed at 33% just at the federal level alone I would want to work harder, take more risk, hire more employees. Right now, if I make more money in future years I most of the deductions are being phased out. The sweet spot for our tax code is someone making about 140K, married with kids. You effective tax rate is pretty low assuming you have a mortgage and fully fund your 401k.

Nothing like making the middle class welfare dependent.

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**Turbo tax, along with Quicken is a beautiful thing. **

For sure. I was doing my return with Turbo Tax this weekend and I couldn’t remember how long I had been using it so I hit the filing cabinet. My first Turbo Tax return was submitted in 1992 - printed on a dot-matrix printer. I can’t remember for sure but I think back then it was one of those huge programs that came on 5 or 6 floppies. There was no import from Quicken back then and no state version either, I had to do that by hand.

No e-file either, I had to walk 5 miles to the post office and back (up hill both ways) to file my return . . .

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…
No e-file either, I had to walk 5 miles to the post office and back (up hill both ways) to file my return . . .
Barefoot, in the snow?

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Submitted today. Hopefully I’ll have to pay in about $1000.