Tax question

[cajun_64]

are you possibly referring to Federal Insurance Contributions Act (FICA)? a lot of people I've spoken with confuse that acronym for Federal In Come Assessment for some reason. It's all semantics. They just use a harmless sounding acronym to let you know they're stealing your money.

http://money.cnn.com/magazines/moneymag/money101/lesson18/index4.htm

Do you know that part on your w2 says federal income tax paid.. Not fica not Rico. Income tax man. That part you have to file each year end.

Thanks for the info everyone. I guess my news reading is falling behind. Maybe I should stop by here less.... NAHHHhhhhhh


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[US Infidel]

But on the bright side, the fat a$$ lazy pieces of excrement that don't work for a single thing they get, will not be affected by this!! They will probably end up with more free stuff. Free food, money, cell phones, medical care..... Great, now I went and pissed myself off!!!

 

[JWG223]

The pay-increase would only be be taxed more on amount in the new tax bracket. So, if the brackets look like this:
0-1000 - 10%
1000-3000 - 20%
3000-5000 - 30%
And you made 3500 you would pay 10% on the first thousand, 20% on the next two thousand, and 30% on the remaining 500.

In the end, a pay increase (without a tax increase, which we did have on SS and something else) would yield to you making more money and paying more taxes, but a net increase in take-home pay.

Exactly, I try to explain this to the geniuses I work with who constantly warn me of working overtime. They have all sorts of ridiculous formulas in their heads about "If you work 1 or 3 OT shifts, it's good, but 2 or 4 OT shifts, is horrible."

I have NOT seen that born out on my paychecks, or at the end of the year, and if it were true, people would get pay-cuts and celebrate instead of pay-raises and celebrating. Noone wants a $5/hr pay CUT, but work an equivalent amount of overtime and everyone is all "OMGZ YOU SCREWED YOURSELF!".

Maybe I'm all wet and don't have a clue, but my end of the year net income certainly is preferable to theirs, IMO.

 

[olivs260]

Exactly, I try to explain this to the geniuses I work with who constantly warn me of working overtime. They have all sorts of ridiculous formulas in their heads about "If you work 1 or 3 OT shifts, it's good, but 2 or 4 OT shifts, is horrible."

I have NOT seen that born out on my paychecks, or at the end of the year, and if it were true, people would get pay-cuts and celebrate instead of pay-raises and celebrating. Noone wants a $5/hr pay CUT, but work an equivalent amount of overtime and everyone is all "OMGZ YOU SCREWED YOURSELF!".

Maybe I'm all wet and don't have a clue, but my end of the year net income certainly is preferable to theirs, IMO.

I believe there used to be tax brackets, where 100% of your income was taxed based on which bracket you were in. My dad tells a story of convincing his boss to not give him a raise because he was right at the top of his current bracket, and the raise would have put him at the bottom of the next one. His net income would have ended up being less.

I don't know when the system was changed, but it was long before I started paying the tax man.

 

[AustinBR]

I believe there used to be tax brackets, where 100% of your income was taxed based on which bracket you were in. My dad tells a story of convincing his boss to not give him a raise because he was right at the top of his current bracket, and the raise would have put him at the bottom of the next one. His net income would have ended up being less.

I don't know when the system was changed, but it was long before I started paying the tax man.

From what I know it was never like that, it was just a misconception that people had because the ease of getting information out back then was alittle more difficult than now. I might be wrong, but in none of my finance classes have I learned about the old system being like that. At work I have heard the whole not wanting to get paid more thing from people depositing their tax refund checks and they always look at me like I'm crazy when I tell them that it doesn't work like that. It is just annoying that these uneducated people will listen to people like Obama when he talks about taxes and stuff and vote for him having no idea what he actually means.

 

[Xenon]

I'm not aware of any system that was ever like that either.

Cajun, it's likely that something else in your life changed in the course of the years, making your tax refund different. Most likely it wasn't the tax rates for 11-12 because they were near identical.

The payroll tax holiday did expire, but that is only on your take home pay (net cash), not your tax return. It's an employment tax vs income tax thing.

Depending on your income level and investments, you could see a serious change in 2013 to your income tax bill. It won't affect the average Joe very much, but will affect people selling off capital assets, with a high amount of dividends, or income in excess of $250k ($200 single). There is a new medicare tax of 3.8% on investment (unearned) income that will sting some people pretty bad.

 

[JadeRaven]

The pay-increase would only be be taxed more on amount in the new tax bracket. So, if the brackets look like this:
0-1000 - 10%
1000-3000 - 20%
3000-5000 - 30%
And you made 3500 you would pay 10% on the first thousand, 20% on the next two thousand, and 30% on the remaining 500.

In the end, a pay increase (without a tax increase, which we did have on SS and something else) would yield to you making more money and paying more taxes, but a net increase in take-home pay.

Right. He only said he noticed "more federal taxes coming out of (his) check."

Typically if you make more money you end up with more money, regardless of taxes, unless you're this guy:
http://www.nytimes.com/2012/02/04/business/at-102-his-tax-rate-takes-the-cake-common-sense.html

 

[Xenon]

Right. He only said he noticed "more federal taxes coming out of (his) check."

He also said this:

Myself, and everyone I know also got back less taxes on our return from last year.

 

[JadeRaven]

He also said this:

He also said this:

Not sure if this is the right place for this, if not, mods please move.

 

[cajun_64]

For 15 years I worked for myself. Had an S-corp(sorta wishing I had kept that for NFA pruposes, but that is another story)

Did payroll
Did taxes... by the way, I wish everyone had to write uncle same that tax check each month instead of it coming straight out of pay checks... I bet more would be screaming.

Used quickbooks... alot.
What I used to see, and our AP person here confirmed for us, as that your tax table listed above is configured into each check. In other words, each check is taxed as if that is the amount each check will be for each pay period and you would end up at that income end of year.

Years ago working offshore, I could recite to you how much each 18 hour day would give me take home on my check... and after 110 hours in a week there was a drop off in percent coming to me and an increase in the percent going to uncle sam.

yeah, I tend to be pretty anal about knowing what goes where from my paycheck and understanding it.

All our AP could tell me was yeah, tax tables went up.

I did do some more digging last night and found some information, but nothing that helps.

Give unto Ceasar that which is his. Doesn't mean I have to be happy about it, Just be thankful for what I have left.