Tax Cuts
POSTED BY: THGRRI
UPDATED: Thursday, April 17, 2025 01:12
VIEWED: 22355
PAGE 14 of 20
Wow...
Major correction needed here. I can't believe nobody called me out on this.
Quote:
Originally posted by 6IXSTRINGJACK:
NOTE: Anybody looking at those tables should keep in mind that for the tax brackets you need to add $12,000 to the numbers for a single filer, 18,000 for head of household and $24,000 for married filing jointly before the taxes kick in.
For instance, a single person making $24,524.99 or less doesn't pay a dime in Federal Income Tax. (However, they're still royally screwed from the first penny to the last on the SSI/Medicare taxes, of 7.65% for employees, and 15.30% for self employed. Just look at it as 15.30% for everybody. Your employer does.)
HUGE brainfart on that underlined part.
A single person making $11,999.99 or under doesn't pay a dime. After that, it's 10%. Once that same person hits $25,000, everything they make above $25k will be hit with an additional 2%.
If you're making enough to get hit with 22% (above $50,700 for a single filer), save as much of that as you can because you never know when you're going to lose that nice job. You should also be sheltering as much of it as possible in 401ks, IRAs and HSAs as you can.
Sure... you'd get hit with a 10% fine if you take it out early, but even anything you put in above $12k a year you avoid 10% in federal taxes so it's even. If you're putting money in to dodge 22% you're actually making 12% when you take it out (assuming you take it out when you no longer have that job and your income is low or non-existant).
Do Right, Be Right. :)
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Quote:I saw that and wondered... But didn't look up the chart.
Originally posted by 6IXSTRINGJACK:
Wow...
Major correction needed here. I can't believe nobody called me out on this.Quote:
Originally posted by 6IXSTRINGJACK:
NOTE: Anybody looking at those tables should keep in mind that for the tax brackets you need to add $12,000 to the numbers for a single filer, 18,000 for head of household and $24,000 for married filing jointly before the taxes kick in.
For instance, a single person making $24,524.99 or less doesn't pay a dime in Federal Income Tax. (However, they're still royally screwed from the first penny to the last on the SSI/Medicare taxes, of 7.65% for employees, and 15.30% for self employed. Just look at it as 15.30% for everybody. Your employer does.)
HUGE brainfart on that underlined part.
A single person making $11,999.99 or under doesn't pay a dime. After that, it's 10%. Once that same person hits $25,000, everything they make above $25k will be hit with an additional 2%.
If you're making enough to get hit with 22% (above $50,700 for a single filer), save as much of that as you can because you never know when you're going to lose that nice job. You should also be sheltering as much of it as possible in 401ks, IRAs and HSAs as you can.
Sure... you'd get hit with a 10% fine if you take it out early, but even anything you put in above $12k a year you avoid 10% in federal taxes so it's even. If you're putting money in to dodge 22% you're actually making 12% when you take it out (assuming you take it out when you no longer have that job and your income is low or non-existant).
Do Right, Be Right. :)
Making $12,000 still gets you Zero Tax.
Then 10% on each dollar above 12,000 up to 21,525.
Another 2% on each dollar above 21,526 up to 50,700.
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Yup. I don't know what I was thinking. I know it was because of how the table was presented and how my brain mistakenly interpreted it. Saw it with a fresh pair of eyes this morning when I was going to reply to you in the DOW thread and thought "WTF? I can't believe nobody shot me down on that yet."
Do Right, Be Right. :)
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If you're in the 10% bracket and have access to a 401k and a company match, and can afford to, you really should put the money in there. Even if it just sits there doing nothing in a safe fund.
The 10% you dodge would cancel out the 10% penalty, so you would immediately get whatever percentage that the company matches, which in almost any case should be a multitude greater than any savings account or even a CD where you're really locked in.
At 22%, it's a no brainer. Sure, not only would you have to pay a 10% penalty on top of the 22% income tax if you took it out at a later date while you still had the same job, but if you lose that job you'll have the money to draw under $12k as income you won't be taxed on and it will just be the 10% penalty, netting you a 12% return plus your company match.
Also, if you've never used it before even if you've bought a house, you can take up to $10k one single time in your life out of a 401k/IRA penalty free to purchase a home under the "First Time Homeowner" clause.
It's really a good idea to always put in what your company will match, so long as you're making more than the deductible/exemption and you can afford to do so. No other investment in this current economy has such safe and reliable returns or possibilities.
(NOTE: The above statement is only if you don't gamble with it. You're on your own if you do that. My investment advice is only for putting it somewhere safe, in a low bearing fund. The closer to zero, the better.)
Do Right, Be Right. :)
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Quote:Glad you agree.
Originally posted by 6IXSTRINGJACK:
If you're in the 10% bracket and have access to a 401k and a company match, and can afford to, you really should put the money in there. Even if it just sits there doing nothing in a safe fund.
The 10% you dodge would cancel out the 10% penalty, so you would immediately get whatever percentage that the company matches, which in almost any case should be a multitude greater than any savings account or even a CD where you're really locked in.
At 22%, it's a no brainer. Sure, not only would you have to pay a 10% penalty on top of the 22% income tax if you took it out at a later date while you still had the same job, but if you lose that job you'll have the money to draw under $12k as income you won't be taxed on and it will just be the 10% penalty, netting you a 12% return plus your company match.
Also, if you've never used it before even if you've bought a house, you can take up to $10k one single time in your life out of a 401k/IRA penalty free to purchase a home under the "First Time Homeowner" clause.
It's really a good idea to always put in what your company will match, so long as you're making more than the deductible/exemption and you can afford to do so. No other investment in this current economy has such safe and reliable returns or possibilities.
(NOTE: The above statement is only if you don't gamble with it. You're on your own if you do that. My investment advice is only for putting it somewhere safe, in a low bearing fund. The closer to zero, the better.)
Do Right, Be Right. :)
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Well... not sure that agree is the word.
I agree that you should use your 401k as a savings account, that's about it.
There's far too much market manipulation out there to actually say that investing is a good idea for anybody. That's actually something that you and Second agree on.
I don't care what historical values were. Everything is far too unpredictable today and the rules to the game are always being changed by the rich who are really the only sure winners in the end.
I'd give anybody the same advice about investing as I would playing slots on the Boat. Go ahead and have your fun if you aren't prone to a gambling addiction and it's with money you can afford to gamble.
Do Right, Be Right. :)
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Quote:at taxfoundation.org I did a search for "2019 Tax bracket" and found a link for full analysis of the Reform bill. There is a full report PDF which I cannot see. It also says property taxes are allowed with state, local taxes for combined $10k limit. See if they ou can find brackets in that PDF.
Originally posted by 6IXSTRINGJACK:
Do you have any for 2019? I can't find any.
Do Right, Be Right. :)
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I'm not finding what you're talking about. You'd have to tell me the article title maybe?
I did see this: https://taxfoundation.org/conference-report-tax-cuts-and-jobs-act/
About above the line deductions:
Quote:
Repeals the moving expense deduction (except for active duty military personnel) and eliminates the alimony deduction effective 2019 (though those receiving alimony no longer count it as income). Retains other above-the-line deductions, including educator expenses and student loan interest. Graduate student tuition waivers also remain in place.
The poor schmucks that have to pay alimony will now have to pay Federal Tax on it to add insult and injury to insult and injury. But the ones sitting on their ass doing nothing for the money won't have to pay income tax on it anymore. Yay.
It also says this at the top:
Quote:
Here, then, are the major provisions of the conference committee report. All figures (both current law and conference report provisions) are for 2018. Most individual income tax changes will revert to current law after 2025 unless extended.
I don't know if that means that we'll go back to a standard deduction and personal exemption in 2025 or not.
Do Right, Be Right. :)
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Quote:the article was dated 19 Dec.
Originally posted by 6IXSTRINGJACK:
I'm not finding what you're talking about. You'd have to tell me the article title maybe?
I did see this: https://taxfoundation.org/conference-report-tax-cuts-and-jobs-act/
About above the line deductions:Quote:
Repeals the moving expense deduction (except for active duty military personnel) and eliminates the alimony deduction effective 2019 (though those receiving alimony no longer count it as income). Retains other above-the-line deductions, including educator expenses and student loan interest. Graduate student tuition waivers also remain in place.
The poor schmucks that have to pay alimony will now have to pay Federal Tax on it to add insult and injury to insult and injury. But the ones sitting on their ass doing nothing for the money won't have to pay income tax on it anymore. Yay.
It also says this at the top:Quote:
Here, then, are the major provisions of the conference committee report. All figures (both current law and conference report provisions) are for 2018. Most individual income tax changes will revert to current law after 2025 unless extended.
I don't know if that means that we'll go back to a standard deduction and personal exemption in 2025 or not.
Do Right, Be Right. :)
Final tax cuts jobs act details analysis
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Quote:Did you find it?
Originally posted by JEWELSTAITEFAN:Quote:the article was dated 19 Dec.
Originally posted by 6IXSTRINGJACK:
I'm not finding what you're talking about. You'd have to tell me the article title maybe?
I did see this: https://taxfoundation.org/conference-report-tax-cuts-and-jobs-act/
About above the line deductions:Quote:
Repeals the moving expense deduction (except for active duty military personnel) and eliminates the alimony deduction effective 2019 (though those receiving alimony no longer count it as income). Retains other above-the-line deductions, including educator expenses and student loan interest. Graduate student tuition waivers also remain in place.
The poor schmucks that have to pay alimony will now have to pay Federal Tax on it to add insult and injury to insult and injury. But the ones sitting on their ass doing nothing for the money won't have to pay income tax on it anymore. Yay.
It also says this at the top:Quote:
Here, then, are the major provisions of the conference committee report. All figures (both current law and conference report provisions) are for 2018. Most individual income tax changes will revert to current law after 2025 unless extended.
I don't know if that means that we'll go back to a standard deduction and personal exemption in 2025 or not.
Do Right, Be Right. :)
Final tax cuts jobs act details analysis
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