The WSJ numbers don't look right. I don't think those numbers include the increased in payroll taxes these people will pay, or the new 3.9% tax on passive investent income for high-income taxpayers.
Actually maybe it does include the 3.9% investment income tax, but not the payroll tax increase? It's hard to tell.
I do not feel sorry for people pulling down a quarter million bucks suddenly having to pay 1% or so in additional taxes, single moms or not.
I love the single person making $230k. And the four-person household making $650k. Good grief.
The WSJ has been on another planet for quite some time.
That's because you don't understand their pain.
As I pointed out elsewhere, if you're getting $180,000 in investment income right now, you'd almost have to be a millionaire (or you're dealing with such risky products that it's unlikely you're going to see that much income every year).
WSJ Planet is also one where the number of very, very affluent US people who are people of color is much larger than on Earth.
There was a study showing that increased wealth made people happier.
Another study showed that paying more taxes made people sadder.
A follow-up study showed that with progressive taxation the misery caused by paying more taxes trumped the happiness caused by wealth, and so in countries with progressive taxation, the rich are the most unhappy class.
And, yes, I did make all of this up.
I need to learn about what kinds of deductions add up to $25k, or $30k, or whatever the astronomical numbers are. What are these deductions?
Is it mostly mortgage interest deduction? I'm really ignorant about this.
The big deductions are state taxes, followed by charitable contributions, then mortgages on the first two homes. For the extremely wealthy home mortgage might not be a huge part of the total. A million dollar mortgage isn't unusual in some areas, and that will create a $40K or so deduction. Most of the "loophole" type tax breaks are ways to reduce reported income, not deductions.
if you're getting $180,000 in investment income right now, you'd almost have to be a millionaire (or you're dealing with such risky products that it's unlikely you're going to see that much income every year).
Rather more than a millionaire to have that be an "or" instead of an "and." That would be an 18% annual ROI. That's a damn good year!
10: Thanks.
Most of the "loophole" type tax breaks are ways to reduce reported income, not deductions.
Right. That's why I was confused about what the actual deductions were. Deductions are sort of like expenses (as opposed to tax-free thingies, like a children's college fund, I think).
I just learned that you can deduct property taxes! My gosh, I had no idea.
Average deductions in 2009 for returns of filers making between $100K and $200k:
Medical and dental expenses: $799
Taxes paid: $11,094
Interest paid: $11,726
Contributions: $3,518
Casualty or theft losses: $65
Gambling losses: $218
From the IRS Sources of Income tables.
I just learned that you can deduct property taxes! My gosh, I had no idea.
Now that our mortgage has aged out of the big-interest years, property taxes are our big deduction.
11: Yeah, or "multi-millionaire". Even in the dot.com bubble, those would be fantastic numbers to see on a regular basis.
14: I'm not sure how to do a property tax deduction when the property is owned jointly by myself and my brother, and I *may* have to consult a professional tax preparer, but in the meantime, I should probably switch my financial software to something more tax-oriented.
Do people prefer TurboTax, or is there another one?
Not if you send me $199.95 for my sure-pick system of stock market witchery.
16: I'd assume you each can deduct the taxes on the portion your own. However, I don't actually know anything. If you and your brother are leasing the place out, it is probably a business expense and I don't even know how to do those.
I always use TurboTax, but I don't have anything complicated.
Alright. Thanks. I imagine it's time to consult a professional. There are actually two properties, one of which is leased out. This is all completely new to me, of course.
I have friends who go to an actual human being to do their taxes and seem to get a lot back. I've toyed with the idea but I can't imagine what there is really to deduct that I don't already. I imagine there is stuff but it would probably depend on me having kept receipts I definitely didn't keep.
Look, I'm willing to test out the status of single parent earning $260K to see just how miserable it would be. For science.
Those people are all sad because they have internalized the WSJ's stippled-portrait norms of what a decent human being is like, and are suffering cognitive dissonance. Subscribers to eclectic magazines are happier
22: It's not so bad. Let me also say emphatically that my taxes have not gone up nearly enough.
24: the wages of copyright slavery?
16: I use H&R Block's whatever-they-call-it-now (used to be TaxCut). Been using it for years; tried TurboTax for a year or two, then switched back.
As far as jointly-owned property is concerned, my understanding that deductiblity is basically a combination of "legal obligation to pay" and "actually paid." I'm in a similar position - I co-own with my two sisters the house where my parents are now living, but only two of us are in a position to pay the expenses at the moment. My position is that each of us is jointly-and-severally liable (that's the correct term, right lawyers?) for the whole amount of loan payments and property taxes, so we each get to deduct whatever is deductible that we actually pay. In other words, if we stopped paying either the mortgage or the taxes, and seizing the property didn't satisfy the obligation (let's say we discovered a toxic waste dump under the property, making it less than worthless), the bank or town could sue any one of us co-owners for the full amount due and let us sort it out with the others. So given that, if I'm paying half the mortgage (on an otherwise-qualified "second home"), I think I get to deduct half the interest, even if I only own a third of the house.
(Actual tax question if there are any true tax experts in the house: this year, my sister would like to pay the full amount of the mortgage directly to the bank and have me pay her back for half, instead of my paying the bank directly as I have been. Would that affect the deductibility, and if not, what records would we need to keep to support the deduction?)
24: Anonymous anecdotes can't trump imaginary data!
Why would anyone making in the $200k range even notice the loss of $3k?
You don't get that much money without loving each dollar as an individual.
(Not actually true, I used to make that much.)
28: Because she said the lap dances were only $20 each and they were counting.
29.1 should have been signed "Opinionated Mr. Krabs".
So, offtopic question for Halford:
Say you have some hobby that involves following sets of instructions, published by designers. And say there's a particular designer known to be ferociously aggressive about protecting her copyrights. And say that she sells a particular set of instructions only packaged with the (very expensive) materials to follow the instructions, as a kit.
Still with me? Now say you've purchased such a kit, and are the legitimate owner of a copy of the instructions. And have been following those instructions for about six months now (it's a time-consuming process) and are just getting to the finishing stages. At which point you have realized that you don't have the last of the pages of the instructions -- either it wasn't in the package with your kit, or you've lost it. Customer service at the vendor is unresponsive to pleas for help (couched as "is there any way to just buy a copy of the instructions, rather than a whole second kit?")
So, would approaching another person known to have made the kit in question, and therefore to have a copy of the instructions, and asking for a copy of the last page count as fair use? Or is it a copyright violation? That is, is there any sense in which having purchased a copy of something that is now imperfect (either through my own or the vendors fault) gives me a right to fix that copy by copying someone else's?
(I mean, I've done it already and I'm not sorry. It just struck me as a marginally interesting IP question.)
We like TaxAct better than TurboTax; TurboTax was kind of slimy for a while (maybe still is) in terms of how they tried to upsell the various online services and locked you in to one. It's been worth the money to use the software; it found a couple of deductions that I didn't know about (for example, I had foolishly thought I would have to have some capital gains to be able to deduct any capital losses).
Technically, you're now a felon.
The good news is I don't think you're required to register as a sex-offender, unless the article of clothing you're knitting (you're knitting, right?) in connection with this crime is for someone who is underage.
I'm not Halford, but I feel pretty sure that that's not fair use. If you were sure they never gave you the last page, you'd have a warranty issue with them, but if you lost it, you lost it; your rights to the information reside in your possession of the copy. If it were electronic data, you'd have had the right to make a backup in advance, but that's about it.
It might be fair use, depending on how much you copied and for what purpose. The analysis wouldn't hinge on what you'd purchased before. It might also be fine under the first sale doctrine or depending on how it was copied and shared. You also would have an equitable defense to any infringement suit by the owner of the instructions. In reality, of course, this kind of thing doesn't have any lmpact on anything and is fine.
I recommend you go explain the situation the local US Attorney, and throw yourself at their mercy.
Mostly, I just wanted to gripe about the damn vendor. I was hyper-aware of the copyright issue, because the designer is worldfamous in the relevant community for being batshit intense on the subject, and I tried to be a good respecter of IP rights by begging to be allowed to purchase a replacement copy of the pattern. But noooo.
We have to type "lmpact" now because someone copyrighted the word "impact".
I love equitable defences, and situations where I can say, "but even if the merger of the freehold and leasehold failed, the heirs of X would be estopped from making any claim to still have a leasehold interest" or some such.
39: The local AUSAs I've met professionally would, I think, be puzzled by that course of action. Depends on what they're into, I guess.
I tried to be a good respecter of IP rights by begging to be allowed to purchase a replacement copy of the pattern
Why did you go that route instead of telling them they'd omitted a page from your kit and asking them to fix the defective thing they sold you?
Because knowing myself, there's a very good chance I did lose it -- I opened the package over six months ago, and losing things is kind of a hobby. I'd bet strongly that it's me, not them. I only contacted the company because I was being scrupulous: if I were going to cut corners I would have gone straight to someone else with a copy as less of a hassle than getting help from the vendor.
I have friends who go to an actual human being to do their taxes and seem to get a lot back.
I am 100% certain that going to an actual human being last year cost me $600 with no benefit, including no time saved - because I was a new client, and because AB & I are both self-employed (so complicated finances), I had to do almost exactly the same amount of work as I do every other year, and he didn't find a single fucking deduction I didn't know about. It's entirely possible that he correctly erased deductions/expenses I've incorrectly claimed in the past.
It's all I can do not to call him on the phone and chew him out, but what good would that do? He sent me an unsolicited package in the mail a couple weeks ago. We'll see when I feel calm enough to politely tell him no thank you, instead of suggesting where he might put said package.
It's entirely possible that he correctly erased deductions/expenses I've incorrectly claimed in the past.
Well that's just as valuable as finding deductions you didn't know about. Possibly moreso. Maybe not in a strictly financial sense.
BTW, 46 isn't at all to suggest that real live tax experts have no value. I'm sure they help people all the time. But for me, it constituted lighting $600 on fire. And saving maybe an hour on Turbo Tax (because, again, every single piece of info I would have entered on TT I had to hand write for the tax guy).
47:But AFAIK there's no penalty for honest mistakes (and I'm really quite scrupulous about being honest on taxes), so, unless there's a pattern of cheating, the IRS would simply say, "Hey, you didn't qualify for that, give us $1,000."*
Given my income, I'm really not that concerned on that end. I'm sure as fuck concerned about pissing away $600.
*this basically happened once, so I know whereof I speak. I don't recall the details, but it was painless and didn't cost me any more money than it would have to have gotten it right in the first place**. I was never in any legal jeopardy.
**some nominal interest charges, I suppose. BFD.
I wasn't meaning penalties or interest; I was thinking more of the psychic benefit of knowing that documents you'd signed were scrupulously accurate.
26: My position is that each of us is jointly-and-severally liable (that's the correct term, right lawyers?) for the whole amount of loan payments and property taxes, so we each get to deduct whatever is deductible that we actually pay.
Huh. Thanks, Dave W., for spelling out part of what I'd been wondering: it is in fact the case that I'm the one who's been in a position to pay the property taxes this year, and I'd been debating with myself whether to explain to my brother that I'd therefore like to take the whole of the deduction myself. Or whether he'd think I was being an asshole (since he does actually, technically, "owe" me his half ... sometime ... if he's ever in a position, you know).
LB, the funny thing is that your description doesn't even uniquely identify the designer for me.
16
14: I'm not sure how to do a property tax deduction when the property is owned jointly by myself and my brother, and I *may* have to consult a professional tax preparer, but in the meantime, I should probably switch my financial software to something more tax-oriented.
I think tax software generally just does taxes.
Do people prefer TurboTax, or is there another one?
I use TurboTax and Quicken which are made by the same company. They both have annoying features but not enough to get me to switch. There are alternatives.
28
Why would anyone making in the $200k range even notice the loss of $3k?
Lots of people (even people making 200k) spend every dollar so this means finding $3k of stuff to cut.
51
Huh. Thanks, Dave W., for spelling out part of what I'd been wondering: it is in fact the case that I'm the one who's been in a position to pay the property taxes this year, and I'd been debating with myself whether to explain to my brother that I'd therefore like to take the whole of the deduction myself. Or whether he'd think I was being an asshole (since he does actually, technically, "owe" me his half ... sometime ... if he's ever in a position, you know).
If he has no income he should let you take the entire deduction (assuming this is legal which I expect it is) since it won't do him any good. And it would be simpler for him to repay you by paying the entire tax (and taking the entire deduction) in some future year in which he is doing better. This is not legal advice, I don't know what the limits are in assigning the deduction to the person who benefits most.
IANATL, but the whole deduction thing seems to me to depend entirely on who pays the deductible expense. You pay it, you can take it. You don't, you can't. If you each pay some, you deduct the amount you paid.
We have to type "lmpact" now because someone copyrighted the word "impact".
Limpact: a disappointing result. "Obviously, no one was happy with the limpact of the latest advertising campaign."
Its kind of evil that the tax preparation software companies have conspired with Congress to prevent the IRS from publishing its own tax preparation software, which everyone could use, for free.
I believe Urple to be scrupulously literal at all times.
I believe Urple to be scrupulously literal at all times but not in a way that we can understand anymore.
I believe this as well.
||
For the concerned, DogBreath seems to be recovering. Still weak, but walking and eating. Crisis maybe averted for a few months.
|>
That's awesome news, LB. I've been spending an inordinate amount of time worrying about her.
For what it is worth, it once cost me $3500 to have a few years of (dual filing) taxes gone over, involving two countries. Frustratingly I turned out to be better at sorting out the tax treaty stuff than the accountants, but at least any audit can't find me at fault for not trying to get it all right.
What's with the single parent's kid's arms? Particularly the left one, which apparently has an extra elbow hidden behind his Mum's head?
Also - if you imagine that the kid's arms are connected to the hands on his sister's shoulders, it looks like the WSJ graphics person was taking their cues from John Carpenters's remake of The Thing.
