Taxes a REAL budget buster!

[ccgirl]

Yes, you are right Taxes suck. no doubt about it but let's get a reality check.

You've got 25% of your income going into your 401K? If you've got that much going into an accoount you can't touch for a few years, you are by no means poor.

You got taxed on your executor fee, in order for that to kick it, the estates was pretty hefty and you got a nice piece of change for it. Once again no way are you hanging out on a corner, pan handling.

won't even touch the Iraqi comment. there isn't enough money in the world to get me to work in a war zone.

and as Crisi pointed out, if you are in the 33% bracket, middle class would not be what I described you.

I think you might just be a bit frustrated in writing that check to the IRS. I totally understand as I average ~3k this year but in the grand scheme of things, I made a decent living and that too is in America

This. Believe me...I get frustrated too. My DH and myself pay more taxes than some people make in a year. I don't say that to brag. Instead I look at it as I am lucky enough to be able to help others. I also pay my local taxes, some of which go to the schools yet I sent my DD8 to private school so I'm not even using that money. I could complain about that too but it all comes down to choices. I don't think it's unfair. We have choices. If I don't want to live in a 1,000 sq ft house that costs over 400K, I move. 100K is way about the national "middle class" standard btw. I get NY/NJ is expensive. So is MA. I chose to live further away from the city so I can make my money work more for me. Again, it all comes down to choices.

This is a great reminder that we need to see tax professionals/financial advisors when expecting large amounts of money. It is always important to know the tax implications. Sure, you can look at how much you had to pay the government out of your inheritance but you can also look at how much the inheritance was and I bet it was a heck of a lot more than you had to pay.

It's the whole glass half empty/glass half full analogy.

Your reference to the contractors working in Iraq. Way over the top.

 

[Claire&TheBoys]

You do get a tax adjustment for living in a high-COL area. You can deduct your property tax on your Schedule A, and your state income tax (most high COL areas have them).

FICA this year is 4.2% Social Security tax (down 2% just for this year) and 1.45% Medicare (no change). Your employer matches them 6.2% + 1.45%.

 

[eliza61]

Whoa. I think what OP might have meant is that she inherited money, once, and did not take out enough to pay the taxes. I also think that the comments about the military folks not having to pay taxes came out of an angry place.

Since I owe about 7k this year, and cannot claim a loss on the house (that I rent out because I could not sell it) I am LOSING MONEY on, I do understand that frustration.

One of my best friends owes 30k because she did not know how to manage her tax implications when her DH died.

Give the OP a break folks. There will be some frustrated people on here this week when they figure out their taxes. Things will pop into your mind when you are upset.

Once on TripAdvisor I complained about the raw hamburger in Paris- lightheartedly, I might add. About 20 pages of posts later beating me up for that comment ensured I would never post there again.

no doubt understand the frustration but thats why I posted the "reality" check. some times when you are so focused on the frustrations and the sucky parts it takes an outsider to point out the blessings.

Yeah taxes suck, no doubt about it and 3.59/gallon gas ain't fun but the reality is op is in a pretty high earning wage group (I'm making an assumption from her original post) so that still is a blessing.

 

[djbleach]

WOW. Do people really trip me out!

We have to send our daughter to Private School because the Gangs have taken over the public schools. (Not in Northern Virginia though. Those schools are top notch)

We have to get our cars align every month because the Roads in Hampton Roads are so F' up that pot holes are like Land Mines!

My point exactaly on the Contractors in Iraq. These people don't have a choice or they wouldn't be there. The Jobs In America that pay well are GONE. That's why my buddy went to Iraq. He worked for International Paper making Top pay for 24 years. They were making profit every year and decided to shut down. So now my buddy gets offered other jobs at half the pay. So what is his choice. Start over at 55 years old? Or go to Iraq, risk his life and hopefully come back. Then he will pay off his debt and can make it off his wifes salary.

If any American really thinks that what we pay as HARD Working, honest people in taxes for what we get back from our Government, please help me understand.
I've said it before and I'll say it again. The wealthy seem to keep getting it, the poor can get a 'hand out', the middle keep footing the bill.

I'll double check on my 36% tax.
And to the person that critizize the Executure fee complaint. I'd love to hear your story after you go through a year of headaches. Family drama, loss of a loved one and then have to give the government ANYTHING after the money has already been taxed before!
They put Robbers in jail

 

[bellarella]

I'll double check on my 36% tax.

It might make you feel better, since you either are very off on your numbers, or have an unrealistic vision of middle class. In order to have an effective tax of 36% you'd have to make in the millions. In order to hit a marginal tax rate of 36%, you'd have to be making over $300,000 per year.

And to the person that critizize the Executure fee complaint. I'd love to hear your story after you go through a year of headaches. Family drama, loss of a loved one and then have to give the government ANYTHING after the money has already been taxed before!

While I am very sorry for your loss, I disagree with your objection to tax on executure fees. First, it is a job (and does not have to be handled by a family member, for many of the reasons you mentioned). As such, it would make sense to tax it as ordinary income. It sounds like it is taxed much lower than that. Second, allowing for inheritance is probably one of the biggest ways that the "rich get richer," which seems to be an objection you have. IMHO, inheritance taxes are far too low.

 

[eliza61]

WOW. Do people really trip me out!

We have to send our daughter to Private School because the Gangs have taken over the public schools. (Not in Northern Virginia though. Those schools are top notch)

We have to get our cars align every month because the Roads in Hampton Roads are so F' up that pot holes are like Land Mines!

My point exactaly on the Contractors in Iraq. These people don't have a choice or they wouldn't be there. The Jobs In America that pay well are GONE. That's why my buddy went to Iraq. He worked for International Paper making Top pay for 24 years. They were making profit every year and decided to shut down. So now my buddy gets offered other jobs at half the pay. So what is his choice. Start over at 55 years old? Or go to Iraq, risk his life and hopefully come back. Then he will pay off his debt and can make it off his wifes salary.

If any American really thinks that what we pay as HARD Working, honest people in taxes for what we get back from our Government, please help me understand.
I've said it before and I'll say it again. The wealthy seem to keep getting it, the poor can get a 'hand out', the middle keep footing the bill.

I'll double check on my 36% tax.
And to the person that critizize the Executure fee complaint. I'd love to hear your story after you go through a year of headaches. Family drama, loss of a loved one and then have to give the government ANYTHING after the money has already been taxed before! They put Robbers in jail

Sorry djbleach,
That's about as weak of an argument that I heard in a long time.

Yes you're 55 year old buddy did have a choice. NO one kidnapped him and forcefully made him go to Iraq. He saw the salary and too a gamble. Believe it or not 55 years old is not the end of life, they are plenty of mid aged people who actually manage to start over and live happy, healthy productive lives. If he had wanted to stay stateside, he should have took the other job offers and learned to live frugally off of his new salary. Would it have been easy or pleasant? No but no where in the constitution does it guarantee you a life free of working hard or having to pick yourself up. Please, he is not some matyr.

You want to talk about no choice, talk to me after he's seen a 30ft Tsunami rip through his town and wash his love ones out to sea.

Every living person on this board has to deal with family drama, loss of a loved one and headaches. It's called being a HUMAN Being. Yeah you lost a loved one, Why does that make you so special you should not have to pay taxes? I lost my father, father in law and grandmother in the span of 10 months. not to mention having a father in law that did not have a red cent so had to deal with family drama just to bury the man.

We have posters who have had to deal with horrible illness (and still pay taxes), lost of a child (which is unfatomable to me) and still have to pay taxes.

Now as far as getting back the equivalent to what we pay, that's an entirely different argument all together and one that could and has gone on for centuries.

You work, you pay taxes. If you are alive, you will eventually have to deal with unpleasantness. Your personal situation does not have any thing whatsoever with those basic principles.

 

[JoiseyMom]

People do it all the time. In fact it's so common they have a name for it, voting with your feet. If you are making excuses then you obviously aren't as unhappy about your situation as you claim to be.

Those mid-Americans with the 4000 square foot houses probably don't get paid as much as the people in NJ either. Then again, with lower taxes, housing costs and overall cost of living companies don't have to pay as much to attract them, which is why companies are moving out of places like New Jersey and into mid-America, the South and other parts of the country that place less of a burden on them.

Ummm..I am not the OP, I don't have a situation, except high property taxes in NJ, and of course the high cost of living. But then I don't have to pump gas .

 

[momof2intx]

I don't have much to say on this topic, but if a tax percentage of 36% puts the OP at a salary of over $300,000 and they consider that middle class.......then our family of four(with DH and my salary averaging under $80k combined a year) I guess would be considered way under the poverty level!

 

[Christypl]

Well......
My husband spent 22 years in the Marines. He retired after being in Iraq or Afghanistan almost nonstop for 3 years. He had rank...but the pay is crap. With his experience and government clearance he was able to go to
Iraq and make 3 times as much. He could have gotten a job here, or stayed in the military but didn't. Yes it was his choice. About taxes, in order to get the exemption the contractor can only be in the US 30 days out of 365. Most contracts are 3 or 4 months in country and 1 month home. So most contractors don't get the tax break. My husband has been a defense contractor now for 4 years and never gotten the tax break. So, we pay taxes on every penny he makes plus his military retirement and my glamorous job as a teacher.
If you'd like to send your husband...have at it. It isn't what most people think it is that is for sure.

 

[Tiger926]

Good thing OP doesn't live here in Canada! Between taxes, unemployment insurance, pension and a few other deductions, I don't see 50% of my paycheque. And, we don't make anywhere near $300,000+. This does not count $5,000/yr property taxes, 13% HST, etc. But, we do have health care and a pretty good education system.

It's always interesting to read tax discussions on here, as we pay some of the highest taxes in the world, and yet, we still have a huge deficit! Go figure!

Tiger

 

[ilovemk76]

I don't have much to say on this topic, but if a tax percentage of 36% puts the OP at a salary of over $300,000 and they consider that middle class.......then our family of four(with DH and my salary averaging under $80k combined a year) I guess would be considered way under the poverty level!

I think the op was adding federal, state, local if they have it, FICA and may e even property taxes in the 36% total. Plus they may have used their gross less 401k, health insurance and the like.

I was offered a job in Iraq and there was no way I was going.

 

[Celidh]

Good thing OP doesn't live here in Canada! Between taxes, unemployment insurance, pension and a few other deductions, I don't see 50% of my paycheque. And, we don't make anywhere near $300,000+.

It's always interesting to read tax discussions on here, as we pay some of the highest taxes in the world, and yet, we still have a huge deficit! Go figure!

Tiger

I hear ya! I would love to have a chance to complain about all the taxes I have to pay on an income of somewhere around $300,000.00 instead of the $27,000 income I support myself and my three kids on. (That's why it has taken me 3 years to save enough to go to Disney only if I get free dining)

That said, I am happy to pay taxes and live in North America. Is it always fair? NO WAY! Does it suck paying taxes instead of keeping the money, OH YEAH! But ya know what, it could be a lot worse, whether we are in Canada or in the US (although, no offense to most of you here, I prefer my Canada) Both countries have governments that seem to be run by quacks sometimes but neither of our countries are anywhere near as bad as many countries in the world. I know we have poverty in our countries, severe poverty, but all in all, we are way better off living where we do than in a third world country.

I'm sure someone will have something negative to say about this but this is just my opinion. I'll take paying taxes and of course, like human nature, complain about it and our government but it is still way better than many alternatives.

 

[Purseval]

Ummm..I am not the OP, I don't have a situation, except high property taxes in NJ, and of course the high cost of living.

But you are the one who made excuses as to why it would be so hard to pack up and leave, which is the situation I was replying to.

I was born in NJ, raised in NJ (still have family there), graduated from college in NJ so I know a bit about the cost of living there. I also moved into a 4200 square foot house that cost half the price (we downsized into a 2700 square foot condo when the kids grew up) when I voted with my feet and moved out of NJ. But I do pump my own gas.

 

[BeckyKay]

If you have to pay substantial taxes, then you are making money. I'd take that over the opposite any day of the week.

Now, the comment regarding contractors in Iraq, uncalled for. There is no pleasure in the work that they do. Their money should be tax free for all they sacrifice. My DH is active duty military and has seen several tours in Iraq and Afghanistan. His schedule, while miserable, is not as grueling as some of the contractors we know.

 

[j's m]

OP, be thankful you have a 401K to shelter your money in. Most of us don't.

To the others posters that said move out of Jersey, I would if I could find someone to buy my house. We live next door to an abandoned house that's been for sale for a year and a half, the sale price is half of what it started out, and is now close to foreclosure. Who would want my house? We've been there 22 years and back then, taxes were affordable.

 

[SaraJayne]

For some perspective, if the OP is correct in saying they are in the 36% tax bracket. These are 2011 tax brackets.

OK, that didn't work. LOL Check out the link below to find out the salary the OP is complaining about.

http://taxes.about.com/od/Federal-Income-Taxes/qt/Tax-Rates-For-The-2011-Tax-Year.htm

 

[ccgirl]

WOW. Do people really trip me out!

We have to send our daughter to Private School because the Gangs have taken over the public schools. (Not in Northern Virginia though. Those schools are top notch)

We have to get our cars align every month because the Roads in Hampton Roads are so F' up that pot holes are like Land Mines!

My point exactaly on the Contractors in Iraq. These people don't have a choice or they wouldn't be there. The Jobs In America that pay well are GONE. That's why my buddy went to Iraq. He worked for International Paper making Top pay for 24 years. They were making profit every year and decided to shut down. So now my buddy gets offered other jobs at half the pay. So what is his choice. Start over at 55 years old? Or go to Iraq, risk his life and hopefully come back. Then he will pay off his debt and can make it off his wifes salary.

If any American really thinks that what we pay as HARD Working, honest people in taxes for what we get back from our Government, please help me understand. I've said it before and I'll say it again. The wealthy seem to keep getting it, the poor can get a 'hand out', the middle keep footing the bill.

I'll double check on my 36% tax.
And to the person that critizize the Executure fee complaint. I'd love to hear your story after you go through a year of headaches. Family drama, loss of a loved one and then have to give the government ANYTHING after the money has already been taxed before!
They put Robbers in jail

I think you are out of touch with what middle class really is though. You send your daughter to private school because you choose to do that rather than send her to public. I'm sure there are plenty of people that still have to send their kids to those gang ridden public schools because they have difficulty putting food on the table nevermind coming up with tuition for private school. If there was so much gang activity, personally, I would look for another place to live. There are people that couldn't even dream of sending their child to private school. There are people that couldn't even dream of purchasing a house for $200,000 let alone $400,000. BTW, I'm pretty sure the "wealthy" you speak of pay more taxes than you do; do they not? Guess they should be complaining too because they pay more taxes than you?

As far as the bolded quote....freedom isn't free. Public schools aren't free. They need money to run as well. How about police, fire, EMT's. Where do you think all this money comes from?? Taxes!

BTW, the median household income in the US is $52,029. My guess is that you are more than double that judging from the tax brackets you are quoting.

Again, I get the frustration with taxes. My DH and myself pay more in taxes than most of his family make for the entire year. Am I mad about that? No, I think we are very lucky to even be in that position.

 

[bettymae1121]

Remember, what is withheld from your paycheck isn't necessarily what your tax rate is. When you file, if you get a refund your tax rate is lower, if you owe it's higher. That's why you should base it off your tax forms and not your paycheck.

You can figure out your effective federal tax rate quite easily. On form 1040, divide line 60 (your total tax liability) by line 37 (your adjusted gross income, before deductions, exemptions, etc.). That's the percentage of your income you pay in federal income taxes. If you used another form other than 1040 it might be in different spots, but you get the idea.

Now, you still may feel you pay too much in taxes, but at least you'll be looking at an accurate picture.

For example, for DH and I (no kids and no deductions or credits other than mortgage interest, state income tax, property tax, and charitable contributions) our marginal rate is 25%, that is to say that's the top income bracket for us. But our effective rate, the actual percentage of our income that goes to federal income tax, is 10.28%. If we had kids, it would be even less. I don't think that's an unreasonable amount, myself.

Now there's SS and Medicare. Personally I don't look at those the same way as income tax, because when I'm 65 I start getting what I paid in back. YMMV but that's how I feel about it. Sure it's money out of my check, but when I'm 65 I'm guaranteed a check and health care. Now there is plenty of room to disagree about the programs themselves, the fixes they'll need done the road, etc. but at the end of the day, we do get direct benifit from what we pay in.

State taxes, last year was 3%, this year is 5% (IL raised taxes to help cover the budget deficit). DH and I are okay with that, 5% is still pretty low, we think.

Property taxes, well...I don't mind the amount I pay so much ($4300 on a 1300 sqft house) but I wish we had better public schools. For what we pay I think the schools in my district should be way, way better than they are. As far as taxes are concerned, that's my biggest beef.

Thankfully, I haven't had to inherit anything so I can't comment on the inheritance taxes.

Now that's just DH and I. We see the value in our taxes. We like clean air, clean water, safe skies, safe food, safe work places, national parks, the Smithonians, the national highway system, and the biggest and best military in the world. All those things cost money, and we're willing to pay our share. Other people may feel differently. That's cool, it's part of living in a free society. That isn't to say there isn't wasteful spending, of course there is and we don't like any more than anyone else. There are many changes we'd like to see. But the bad stuff we don't like doesn't negate the good stuff we do like.