Tax return is nearly $3000 LESS because I worked part-time last year!

[Kitten0819]

This, right here. A self-employed person making $48,000 a year who has three kids will get $71 in "welfare" (according to some posters here) from the EIC, but their SS tax bill will be around $7,300. There are NO deductions for the SS tax. The only way to lower it is through refundable tax credits. You can have 25 kids and qualify for every tax "reduction" credit known to man, but you are still going to pay the full SS tax bill without any refundable tax credits.

Some of you are calling EIC 'welfare' simply because it is a refundable tax credit. Let me ask you a few questions:

How many of you have kids and make less than $75,000 single/$110,000 married? Do you claim the Additional Child Tax credit? That is also a refundable tax credit, so you are taking welfare.

How many of you are working and make less than $75,000 single/$150,000 married? Do you receive the Making Work Pay credit in you paychecks? You may get some each week and not even know it, since it is automatic and not something that you have to ask for. But, it is also a refundable tax credit, so you are taking welfare.


If we are going to call the EIC welfare, we must do so for a refundable credits, not just the ones geared towards lower-income families.

The SS taxes have nothing to so with the refundable credits. All wage earners (W-2) have to pay SS taxes just like the self employed. The difference is the wage earners SS tax comes out weekly in their paychecks where as the self employed get hit at the end of the year. The problem most have with EIC is the fact that the income limits for it are so low. For a single person with one child you can get a 3000 dollar EIC refund for making as little at 9,000. There is no way a person who only earned 9,000 paid in more than 3,000.

 

[livie1205]

HA!!! Thank you for letting me know what it means. I have two immediate family members that are in law enforcement but I have never heard of that. I would agree their base pay is low compared to their risk. However, their OT is awesome! Their benefits are outstanding. Maybe it's the type of law enforcement but my family members would never have to leave their children if called in. Many of them have spouses that work when they are off. Their schedule is known months in advance. Yes, they can be forced in if the are next on the list but it wouldn't prevent a spouse from taking another job. Plus, they can pick their shift based on seniority. I find the starting salaries vary greatly with the cost of living as well.

It really depends on what unit they are in to know if they have to be called out..whats overtime? lol they stopped that long ago,they make them comp it out.health care is good but pay sucks.

 

[HHSTigerFan]

This, right here. A self-employed person making $48,000 a year who has three kids will get $71 in "welfare" (according to some posters here) from the EIC, but their SS tax bill will be around $7,300. There are NO deductions for the SS tax. The only way to lower it is through refundable tax credits. You can have 25 kids and qualify for every tax "reduction" credit known to man, but you are still going to pay the full SS tax bill without any refundable tax credits.

Some of you are calling EIC 'welfare' simply because it is a refundable tax credit. Let me ask you a few questions:

How many of you have kids and make less than $75,000 single/$110,000 married? Do you claim the Additional Child Tax credit? That is also a refundable tax credit, so you are taking welfare.

How many of you are working and make less than $75,000 single/$150,000 married? Do you receive the Making Work Pay credit in you paychecks? You may get some each week and not even know it, since it is automatic and not something that you have to ask for. But, it is also a refundable tax credit, so you are taking welfare.


If we are going to call the EIC welfare, we must do so for a refundable credits, not just the ones geared towards lower-income families.

Big difference between EIC and the two you mentioned, already been over that..

 

[rubato]

I haven't read every post, but I've read most. I agree and disagree with almost everyone here. It is so hard to decide who deserves what. I think our system is incredibly corrupt and flawed. However, I think there are so many people that truly need help. It is sad that the OP has to decide between being a stay at home mom with the EIC or working for the equivalent of $3000.

I am a stay at home mom and we have to do without a lot of things that our friends and neighbors don't even think about (going to the movies, huge televisions, new cars). I make our food from scratch, so we don't waste money on prepackaged frozen meals. We walk to school if at all possible to not waste gas money. I also decided that I could afford one child, and stopped there. I waited until I was 30 to have said child, so I would be financially stable. We get a vacation every year and we are truly blessed with a fantastic life. But, we work at it very hard.

Now, back when I was growing up, my mom got married at 16, and had 3 children, and no husband by the age of 21. She also didn't have a high school diploma. Then, my father left her. So, she worked 2 jobs as a waitress (all she was qualified for) and we stayed home alone a lot. Why? She was unwilling to take welfare. I have to say that we would have been better off if she had. I am proud of her for not taking it, but we basically didn't have any parents. There are people out there that get in situations (yes, they didn't plan ahead) and they are stuck. If I can pay some extra taxes to help them out, I'm willing.

I do not think the wealthy should pay a higher percentage in taxes than the poor. It all evens out, if we all pay the same %. I don't know why someone who makes $200,000 a year should have to pay a higher % than someone who makes $50,000 (what we make). I just want us all to PAY our taxes, including big business.

Here are my issues:

Unless you are a single parent, why should you get a tax break for child care? It's a decision you are making to both work and have child care.

Why should you get a tax break for mortgage interest? It is a luxury to be able to buy a house, not a right.

Just my opinion on these two, but they are the issues I have.


I hope the OP does what is right for her family, not anyone else's.

 

[HHSTigerFan]

Why should you get a tax break for mortgage interest? It is a luxury to be able to buy a house, not a right.

That one actually makes sense to me, incentive to get people to buy houses..

 

[luvsJack]

Would have NO problem if minimum wage was scrapped, if a person feels they aren't making enough they can find another job..

As for the second part..Not much of a solution needed, how about they get a job that allows them to take care of themselves? Stop killing the business community with taxes and let the open markets do what they do best.

Really? Where? Where would you like someone with very few marketable skills going to get another job? Do you actually think that people work at minimum wage jobs because they don't WANT something better?

And you do realize there is a reason why there is a minimum wage law?

You obviously think you have all the answers but yet have never walked one step in the shoes of the people you have the answers for.

As for minimum wage being livable--try it sometime. I know several that do that very thing and I see how hard it is for them. I see the panic in their eyes in something comes up at their child's school that requires a couple of dollars and know they don't have the money for it. Or how upsetting it can be if the light bill is $20 higer, or the car needs an oil change.

I made minimum wage when it was $3.75 an hour and the cost of living was much lower, it was not a liveable wage then and its not now.

 

[luvsJack]

Here are my issues:

Unless you are a single parent, why should you get a tax break for child care? It's a decision you are making to both work and have child care.

Why should you get a tax break for mortgage interest? It is a luxury to be able to buy a house, not a right.

Just my opinion on these two, but they are the issues I have.


I hope the OP does what is right for her family, not anyone else's.

So you would rather one parent stay home and the family go on government assistance? Its not always a choice.

 

[HHSTigerFan]

Really? Where? Where would you like someone with very few marketable skills going to get another job? Do you actually think that people work at minimum wage jobs because they don't WANT something better?

So now its MY problem someone didn't go out and get marketable skills?

I have worked min wage jobs(maybe $3.35 at the time), when I was working myself through college, learning marketable skills.. see how that works?

Instead we make it harder on companies to remain profitable in the US by taxing them to death, they send quality jobs overseas and now people working those jobs are now working minimum wage jobs.. see how that works?

 

[Colleen27]

The SS taxes have nothing to so with the refundable credits. All wage earners (W-2) have to pay SS taxes just like the self employed. The difference is the wage earners SS tax comes out weekly in their paychecks where as the self employed get hit at the end of the year.

And the other difference is that the self-employed pay 100% of that tax, while employees split the burden with their employers. Again, if that isn't a disincentive for entrepreneurship, I don't know what is.

That one actually makes sense to me, incentive to get people to buy houses..

The having of the house and building equity should be incentive enough. Besides, it isn't just the whether or not to buy decision that is influenced by the interest deduction - there is also the question of how much house to buy and how to finance it, and exempting mortgage interest from tax skews borrowing behaviours in potentially undesirable ways.

It will probably surprise people given my positions on other things, but I'm actually all for a flat tax. Social engineering via the tax code has too many unintended consequences and creates too many loopholes. A flat tax rate with a fixed per-person deduction, with no other deductions or credits whatsoever, seems to me the best way to accomplish what taxation is supposed to accomplish - that is, funding the government rather than manipulating the populace's financial decisionmaking.

 

[sam_gordon]

I do not think the wealthy should pay a higher percentage in taxes than the poor. It all evens out, if we all pay the same %. I don't know why someone who makes $200,000 a year should have to pay a higher % than someone who makes $50,000 (what we make). I just want us all to PAY our taxes, including big business.

I think the easy answer to your question is if we didn't have a progressive tax, the government would be even more in debt (because they don't bring in enough money). Again, if you really want to understand it, google "reasons for a progressive tax".

Here are my issues:

Unless you are a single parent, why should you get a tax break for child care? It's a decision you are making to both work and have child care.

Why should you get a tax break for mortgage interest? It is a luxury to be able to buy a house, not a right.

I'm pretty sure the thought is the child care break helps encourage people to get a job.
The break for mortgage interest (as has been mentioned) helps encourage people to buy houses.

I still say use a flat tax, but make it progressive. If you make less than $10K, you pay nothing. From $10,001 - $20K, you pay 1%. $20-$30K 3%, etc, etc. Cap it when you get to either $200K (20%) or $250K (25%). No deductions, no credits, no different kinds of income.

People rich enough to afford it will find lawyers/CPA's to use every possible deduction, no matter how shady or underhanded in order to minimize their tax burden.

 

[indimom]

Really? Where? Where would you like someone with very few marketable skills going to get another job? Do you actually think that people work at minimum wage jobs because they don't WANT something better?

And you do realize there is a reason why there is a minimum wage law?

You obviously think you have all the answers but yet have never walked one step in the shoes of the people you have the answers for.

As for minimum wage being livable--try it sometime. I know several that do that very thing and I see how hard it is for them. I see the panic in their eyes in something comes up at their child's school that requires a couple of dollars and know they don't have the money for it. Or how upsetting it can be if the light bill is $20 higer, or the car needs an oil change.

I made minimum wage when it was $3.75 an hour and the cost of living was much lower, it was not a liveable wage then and its not now.

Agreed. Living on minimum wage is like treading water, nothing more. No Way, can you live on minimum wage jobs and still afford a vacation every year. And you won't be funding your retirement either.

 

[Colleen27]

So now its MY problem someone didn't go out and get marketable skills?

I have worked min wage jobs(maybe $3.35 at the time), when I was working myself through college, learning marketable skills.. see how that works?

Instead we make it harder on companies to remain profitable in the US by taxing them to death, they send quality jobs overseas and now people working those jobs are now working minimum wage jobs.. see how that works?

We will always need people doing the jobs that currently do not pay a living wage. There's no way around that. We will always need more burger flippers and cashier jockeys than lawyers or doctors. That's why it is so important that treating employees fairly goes top-to-bottom rather than taking that "so what" attitude about a fixed and fairly large share of our workforce.

It isn't primarily taxation that sends jobs overseas. Most of the companies that are moving so many functions overseas are still taxed as American corporations. What lures businesses overseas is the difference in labor costs, environmental regulations, and absence of other requirements of doing business in the US.

 

[indimom]

So now its MY problem someone didn't go out and get marketable skills?

I have worked min wage jobs(maybe $3.35 at the time), when I was working myself through college, learning marketable skills.. see how that works?

Instead we make it harder on companies to remain profitable in the US by taxing them to death, they send quality jobs overseas and now people working those jobs are now working minimum wage jobs.. see how that works?

Once again, you keep avoiding the very idea that some people are NOT ABLE to get a college degree. I'm going to come out and say what we all seem to be avoiding. Some People Are Not Smart Enough. No Amount Of Assistance Will Get Them A College Degree. What do you propose we do with these people? Toss them in the ocean because they are a burden on society, because they are taking the minimum wage jobs which should be available as proving grounds for high school and college age students who are bettering themselves?

Are there lazy people? Yes
Are there people taking advantage? Yes
But there are also living breathing loving human beings who are doing their best to survive in a world filled with people who do not want them to be THEIR problem.
I hope you feel very, very blessed, because you are.

 

[morgan98]

And the other difference is that the self-employed pay 100% of that tax, while employees split the burden with their employers. Again, if that isn't a disincentive for entrepreneurship, I don't know what is.

The incentive for being self-employed is that you get to be your own boss, charge what you can negoatiate for your services and hopefully keep the profits of your business. The flip side of this is you are the "employer" of yourself and therefore need to fund both halves of the social security tax. After all, in order to be eligible for the same social security benefit as a W-2 employee, the same contribution to the social security fund would need to be made. If one feels that this is a disincentive to being self-employed, then one can always go work for someone else as a W-2 employee. However, that generally comes with restrictions with regard to keep the company profits, controlling your own work, etc.

I really don't understand why people keep bringing up social security tax in a thread about federal income taxes. They are NOT the same thing. I understand they are all money we pay the government, but they are not interchargeable. If you expect social security benefits you have to pay into the system.

 

[HHSTigerFan]

Agreed. Living on minimum wage is like treading water, nothing more. No Way, can you live on minimum wage jobs and still afford a vacation every year. And you won't be funding your retirement either.

So a vacation is a legal right??? By all means, lets raise my taxes so everyone can go on a vacation..

 

[HHSTigerFan]

Once again, you keep avoiding the very idea that some people are NOT ABLE to get a college degree. I'm going to come out and say what we all seem to be avoiding. Some People Are Not Smart Enough. No Amount Of Assistance Will Get Them A College Degree. What do you propose we do with these people? Toss them in the ocean because they are a burden on society, because they are taking the minimum wage jobs which should be available as proving grounds for high school and college age students who are bettering themselves?

Are there lazy people? Yes
Are there people taking advantage? Yes
But there are also living breathing loving human beings who are doing their best to survive in a world filled with people who do not want them to be THEIR problem.
I hope you feel very, very blessed, because you are.

I know a lot of people that didn't go to college and are doing quite well for themselves because they have a solid work ethic.. but heaven forbid we expect that!

 

[indimom]

I know a lot of people that didn't go to college and are doing quite well for themselves because they have a solid work ethic.. but heaven forbid we expect that!

What do they do? Does it involve any math? Any reading? It's pretty hard to get a decent job without those skills.

FYI, my husband did not go to college, has a solid work ethic, and has a decent job. I'm well aware it's possible. My father never went past the second grade (passed an 8th grade equivalency test) and built his own business from the ground up and raised four children and paid for all of us to go to college.
BUT, both of them are also smart, not lacking any social skills or life skills or general educational skills that would hold them back. You are still avoiding the hard question. What do we do with those people?

 

[indimom]

So a vacation is a legal right??? By all means, lets raise my taxes so everyone can go on a vacation..

No, that comment was in reference to an earlier post which stated they could easily live on that AND afford a vacation every year. I found it laughable, so I added it into my post as sarcasm.

 

[StuckInKS]

The question, as it pertains to taxes is whether he owes the employees anything above and beyond the salary that was agreed upon when they started working for him.

What I find funny is that business owners think $10 or $15 an hour is a "fair wage" because that is what was agreed upon, but want to complain that these same people are getting too much money in public assistance or refundable tax credits. That these families should starve or go without heat/lights/water because they can't make it on the $20,000 to $30,000 a year that they are so generously being paid.

Companies take advantage of workers to increase their bottom line. If unemployment is so bad that you have 100 overqualified people fighting for one $10 an hour job, then why pay more? (Even though your bringing in millions or billions in profit?)

You're against EIC? You think it is "stupid"? I think SS is stupid and would LOVE to put that money in my own retirement account. Instead, the entire fund will be bankrupt years before I am old enough to benefit (2046, under the current rules.) I would like to see kind of SS reform just as much as you would like to see the EIC eliminated.

 

[HHSTigerFan]

I bet most people that dislike the EIC, would also be in favor of ending Social Security, I know I would.. Let me invest that money myself, would do a heck of a lot better!