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Do the math

Posted by H6163741 10 years, 2 months ago to Economics
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So, it's tax time again, and again I am furious. Apparently, the federal and California governments believe that we make too much money. Unfortunately, 'too much money' is not enough to buy a house in Los Angeles, so we get royally screwed every April 15th. We are a family of three; my husband claims 1 on his W4, and I claim 0 AND have extra money taken out! I would love to go Galt, but I really do like my job. (I get to fight the looters!). I am seriously wondering if I should asking company to reduce my pay. Does anyone know the math formula? Is there some 'magic number' that will keep us from feeding the looters, but not so much that I become one?


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  • Posted by cranedragon 10 years, 2 months ago
    Actually, the governments you list don't think you make too much money; they think you keep too much money, and left to your own devices, you wouldn't direct it to the support of the people, places, and things that they want to see supported [mainly their staff, of course, but also their cronies and the looters that will give them a job when they finally time out of the system]. So, they remedy your misunderstandings and oversights, and your selfish insistence on spending your earnings on things of relative unimportance in their Weltanschauung [groceries, say, or rent...?]

    But, moving right along from the irrelevant digression to your question, the best suggestions are the ones below -- start your own business, take yourself out of the employee/required monthly/quarterly tax withholding morass, and build your own small Atlantis.
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  • Posted by $ prof611 10 years, 2 months ago in reply to this comment.
    I was simply objecting to your statement, since a tax is a violation of our property rights. Your solution of fee for service is certainly an acceptable alternative. There are others. As to "Fair Tax", that is certainly an oxymoron.
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  • Posted by $ jlc 10 years, 2 months ago
    Given the parameters you state: living in CA, raising a family, liking your job and hence not wanting to move, I have some general ideas.

    Spend money on things that have rebates. If you spend money on an electric car, you get a looter-rebate...but it is actually a refund of some of the money that has been taken away from you in taxes.

    Buy a house, even if there is a commute. I am not a tax savant, but I have always heard that a house is a tax advantage. If there is some way you can arrange for at least some of your house and car to be a business expense, do so.

    Once you have a house, get solar with batteries. (This is in the first category - but you need the house first.)

    There are definite breaks in payscale, but often these are also linked to corporate medical coverage (which you do not want to loose). Back in the 1980's, when there were more steps in the payscale, I found a spot that allowed me to keep my medical coverage but was below the IRS break point. Working 34 hours a week, I made the same amount as my co-workers who worked 40 hours, when taxes were taken into account.

    Good luck.

    Jan
    PS I live about 15 min NW of Magic Mountain...
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  • Posted by $ MichaelAarethun 10 years, 2 months ago
    It's not just the math or even the math for one year. Case in point. In my old job a federal circuit Judge, the 9th in California, decided the instructions issued by the IRS for travel per diem were wrong and bade them change and go back three years to collect the difference. This after we had faithfully and as exactly as possible followed the rules. Three years of difference was finally paid with no fines because I used a credit card to make up the shortfall. Interest on the card was cheaper than government fines and interest on the fines etc.

    Some where in there I began drawing social security. Again followed the rules as exactly as I could figure them out which wasn't easy. Different every year.

    A few months after paying off the back due was completed I got a check for around $100 more than what I had paid in. This was for not using the correct formula and paying too much on the social security share of income tax! I don't know what it will be this year for taxes. It's never the same and there is no crystal ball for planning ahead.

    The point is the government giveth and taketh and you never know except one thing. Sign the bottom of that form and you commit a felony.

    Nowadays no signature is required it's just complete the annual form and send it in. There is NO WAY anyone can sign the bottom of that form and be truthful.

    The purpose of income tax is not raising revenue. it's all about controlling the population especially those who work for a living. Another reason to be against the flat tax or any additional Value Subtracted taxes (the ones Pelosillynni calls VAT which is already embedded. All income tax is a control tool or weapon.

    End User Consumption tax is the other way around.

    However returning to your question I planned ahead, bought a boat and moved across the borders as part of my formula.

    There is no magic number except not voting for the Government Party. Live in the USSA you are doomed to frustration so treat it like the game it is and cure frustration by doing it in Roman Numerals, sending the return and the check in two envelopes, or stuffing those teeny marshmellows up your nose and seeing how far they will go when you sneeze.

    I'll put it another way. If they were interested in efficiency and raising money WHY do they pay me their money and have me give it back some months later? Why? Cause they like to harass citizens.

    Practically speaking move out of California or Michigan or Massachusetts to a non income tax state except Washington. That cuts out the State part of the problem. Moving to those states which also lowered my true cost of living was like a big aspirin. Then move on a boat and out of a house. Big deduction in living expenses.

    Worked for me as I was not chained to a location in my employment.

    Works Great for retirement too!

    Sorry too long and wordy but it's a matter of choosing options and being willing to give up a lot of things that for me I find I didn't need anyway.
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  • Posted by DrZarkov99 10 years, 2 months ago in reply to this comment.
    Alternatives? Fee for service is one way for an agency to be funded. Certainly that avoids paying for school by people with no children. Law enforcement paid as a security firm (and how does that work for low income areas?). Just curious. I understand the "Fair Tax" idea, that winds up about as complicated as our current system, so I'd like to see your solution.
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  • Posted by Mamaemma 10 years, 2 months ago in reply to this comment.
    I have had people come in my office to get me to document that they broke several teeth in a fall at a store, and I proceed to tell them that these teeth were rotted, and that's why they broke, and the store should not pay to fix these teeth, which I then tell the adjuster. I don't get many of those patients anymore!
    Once I had a lawyer offer to send me patients if I would say what he wanted. He said I could charge up to $2000 for X-rays and exam (normal fee at that time was about $105).
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  • Posted by strugatsky 10 years, 2 months ago
    Loot as much as you can. The sooner the system collapses, the better. Just try to preserve your skills - they may still be needed.
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  • Posted by 10 years, 2 months ago
    I can't even read Atlas right now. It's too real- Like watching Office Space when you hate your job...
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  • Posted by DennisKebrdle 10 years, 2 months ago
    why have them withold so much extra? makes no sense for them to have a free loan of your funds. doesn't make sense if you're witholding at the payroll rates that youre so short. problem we find is that income under 100K esp in the 60K range is not much extra beyond freebees. who's going to back those reductions needed? surely not big retailers, the casinos, or the lottery stations lets pass out more $$$ and tax it back with phoney crap
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  • Posted by scojohnson 10 years, 2 months ago
    I live in California as well, you really need to buy a house, condo, whatever, or at least buy one outside of LA, pocket the rent and deduct the mortgage like its a primary or something. Unfortunately, there isn't an easy answer.

    Max out your 401k before you take a reduction. Same thing, but you keep it, not your employer, you can go up to something around $18k a year plus whatever matching (in my case), the amount varies to a high range of average for your employment group...
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  • Posted by $ allosaur 10 years, 2 months ago
    I decided last June to get out of the stock market and now have several thousand in my savings account.
    Haven't done my taxes yet.
    I fully expect to get my clock cleaned.
    I don't wanna do the math! I don't wanna do the math!
    Spreading the wealth around! Wheee!
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  • Posted by waytodude 10 years, 2 months ago
    I know how you feel. What I did is not for everyone I bought land started raising cattle. In Missouri I'm able to buy most everything tax free for the business I get to deprecate nearly everything. When it gets close to the end of year I see you accountant and buy what ever it takes to not pay which helps the busy. I'm so happy now and not living in California anymore.
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  • Posted by DrZarkov99 10 years, 2 months ago
    Flat tax is the only rational solution. Everyone contributes, and people start to pay attention how the money is spent.
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  • Posted by term2 10 years, 2 months ago in reply to this comment.
    And there isn't an incentive to work hard and leave money in an inheritance when they get half again over I think $5m
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  • Posted by term2 10 years, 2 months ago
    I hate to give government anything. I left california for nevada to avoid state income taxes. As to federal taxes you can stop getting a paycheck and start your own business. Borrow from it and live off that and then sell the business and pay capital gains tax 23.8% now.
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  • Posted by peterchunt 10 years, 2 months ago
    I would get out of Dodge (i.e. California) as it has been taken over by the looters.
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  • Posted by $ Thoritsu 10 years, 2 months ago
    The worst is Alternative Minimum Tax (AMT). Stay the phuck away from that!
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  • Posted by $ rainman0720 10 years, 2 months ago in reply to this comment.
    WOW. I get to keep at least half of what I earn? That's one hell of an incentive to go bust my butt some more.
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  • Posted by 10 years, 2 months ago in reply to this comment.
    I'm an insurance claims adjuster. When people get into a car accident (or fall in a store, etc), they think they've won the lottery. And there are plenty of shady attorneys out there who think they can (and often do) make a lot of money 'assisting' them.
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  • Posted by khalling 10 years, 2 months ago
    One possibility is to consider asking your company to move you to part time and pay you as an independent contractor instead. I don 't know how that would affect your benefits but it might free up your schedule, allow you to consult to other companies, and you 'd be eligible for taking Expenses against your income. Uncle sam dearly wants you to stayon a regular paycheck.

    expenses
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  • Posted by Mamaemma 10 years, 2 months ago
    Tell me about your job. I'd like to hear about fighting the looters. It sounds great
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