getting bumped up in taxes 2013

[highland145]

I 'm going from paying a lot in to getting E.I.T.C. Thanks for your contributions to my beer fund.

<--job creator.

 

[jagec]

It's good to go to a tax professional at least once, so you can see the standard deductions you can take.
We met with one last year and saved a lot more.
Tons of home office and work related deductions, we were paying a local income tax that we weren't required to (we lived outside city limits), etc.

You don't need a professional to tell you all that, it's all there in the IRS publications. You just have to take the time to read through them and see what applies to your situation. There is nothing magical about H&R block, in fact, they screw up all the time.

 

[Strk]

It's always sad to see people passing on the urban legend about "a friend" who got a small pay increase and ended up with less money because he "moved into a higher tax bracket."

As we all explain in the posts above, it does not work that way. Only the new, extra money is taxed at a higher rate. The old, existing money is still taxed at the lower rate.

By the way, if you itemize then your donation to Child's Play could lower your tax bill. Free monies!

It reminds me of a guy at work trying to tell me how me pays around 50% in taxes. He has two kids, a stay-at-home mom for a wife and a mortgage (less than 100k is owed). He makes around $60k a year. He got mad when I told him if he actually pays that he needs to fire his accountant and immediately. He was not amused

It really does amaze me how few seem to know how our tax system works.

 

[ichy]

"I just know H&R Block gets me money back."

- said by a coworker who paid H&R Block to fill out the EZ form.

I had a friend in college who paid an accountant to do his 1040EZ. The sad thing is that he's absolutely not an idiot, he ended up getting an engineering PhD and now works for Intel.

Sometimes I think I should work as a "life consultant." I'll take care of all the common sense tasks that people with a lot of book knowledge seem to fail at.

 

[ichy]

It's good to go to a tax professional at least once, so you can see the standard deductions you can take.
We met with one last year and saved a lot more.
Tons of home office and work related deductions, we were paying a local income tax that we weren't required to (we lived outside city limits), etc.

You don't need to be a tax professional to figure that stuff out. This stuff is NOT hard, it just requires a little bit of research on your own.

Also, the home office deduction is an audit magnet.

 

[HardcoreRobot]

id pay .25% tax any day. .50% even...

THIS is why the tax code needs to be rewritten. average people dont even understand the very very basics

 

[gorcorps]

Why do so many people still not understand how the tax brackets work? You can NOT take home less after getting a raise via taxes alone.

 

[gorcorps]

id pay .25% tax any day. .50% even...

THIS is why the tax code needs to be rewritten. average people dont even understand the very very basics

The code does not need to be dumbed down simply because stupid people exist.

 

[SphinxnihpS]

The code does not need to be dumbed down simply because stupid people exist.

Why not, everything else is?

My biggest hate is definitely the red left turn arrow.

 

[DrPizza]

You don't need a professional to tell you all that, it's all there in the IRS publications. You just have to take the time to read through them and see what applies to your situation. There is nothing magical about H&R block, in fact, they screw up all the time.

It's not "all" there. Or rather, some of the things aren't explicit enough where you would realize that you qualify for some of the deductions. Heck, I remember just chatting for a couple minutes with our accountant after giving her what we thought was all of the information. "Oh, a goat that you purchased died? That's a business loss."

 

[notposting]

Holy crap. I am embarrassed that I didn't know about this.
I am suddenly having a huge moment of clarity. So many things make sense now.
If this topic ever comes up in real life, I will act like I knew it all my life.

FTFY and same for me :$

 

[HardcoreRobot]

The code does not need to be dumbed down simply because stupid people exist.

When I see smart people that are incapable of filing their own taxes and people that don't know how withholding, refunds, mortgage insurance deductions or even how the brackets work, that tells me its too complex.

The code is 10s of thousands of pages long.

You have professionals that can't even file taxes correctly.

I am not saying it needs to be dumbed down so every citizen is a tax master, but it needs to be simplified so the AVERAGE citizen is confident and comfortable with it.

 

[IronWing]

When I see smart people that are incapable of filing their own taxes and people that don't know how withholding, refunds, mortgage insurance deductions or even how the brackets work, that tells me its too complex.

The code is 10s of thousands of pages long.

You have professionals that can't even file taxes correctly.

I am not saying it needs to be dumbed down so every citizen is a tax master, but it needs to be simplified so the AVERAGE citizen is confident and comfortable with it.

Most of the tax code doesn't concern the average citizen. The bulk of the code is written to provide tax breaks to special interests. The tax code does need to be greatly simplified but not for the reason that it is too complicated for the average taxpayer. It needs to be simplified as it has become the preferred method for Congresscritters to pay back campaign contributors, ie, corrupted.

 

[edro]

A major complications is all of the regional and local tax implications.
Every city/state is different as to which taxes you pay regarding where you work versus where you live.

 

[Jeffg010]

If you do a 1040ez then HR is not needed but if you itemize then it can be a real pain in the ass. I found a guy at HR that knows his shit and I never had a problem. Instead of me taking 2 or 3 hours to do the taxes it take him less then an hour.

 

[Phynaz]

You can NOT take home less after getting a raise via taxes alone.

Actually, if that raise bumped you into the AMT it could happen.

 

[DaveSimmons]

Actually, if that raise bumped you into the AMT it could happen.

I'm no CPA, but: Probably only if you have a lot in itemized deductions. AMT sets a minimum % but it's not really higher than the standard tax tables.

I did get bit by the AMT a few years ago because of some stock options. The main effect was that I had to pay taxes then, instead of later when I actually sold the stock shares. That only shifted when I needed to pay the taxes.