Another year another tax filling

[SMSgt]

Filed mine today as well. No state income tax here. We pay a small fortune in property tax, though. They're gonna get you one way or another.

My business-class instructor called that making up on the oranges what you lose on the bananas.

 

[SMSgt]

Because you get to deduct state taxes paid against your federal taxes. So a refund of part of those state taxes that you deducted now becomes additional income at the federal level.


It's actually perfectly logical if you think through the numbers.

Maybe I'm illogical, but the state taxes "paid" and deducted is only the amount the state kept, not what was withheld or returned. Logic like mentioned is one reason some states never go on my go-to list.

 

[Denverd0n]

Maybe I'm illogical, but the state taxes "paid" and deducted is only the amount the state kept, not what was withheld or returned. Logic like mentioned is one reason some states never go on my go-to list.

No. You deduct the state taxes WITHHELD from your salary on your federal form. Then, when you get some of that refunded, it becomes income for the next year.

See this page... Topic no. 503, Deductible taxes | Internal Revenue Service

Here's the relevant quote: "You may deduct as an itemized deduction, state and local income taxes withheld from your wages during the year..."

 

[jscheck]

Did ours last week. Screwed by the Feds but the state paid a bit back.

 

[dockmurgw]

I'm trying the Sovereign Citizen angle this year and not filing...see how it works out.

 

[HJBM&P22Custom]

I took things one step further and finally hired an accountant. The first year he found enough legitimate credits/deductions to pay for his fee and I eliminated a whole lot of stress from my life.

So what did he find that you didn't know about without him, and how much did it save you?

 

[LVSteve]

The expectation of a refund so many have always makes me smile. It's the Internal Revenue Service. I don't see where it claims to be a savings plan that many seem to rely on. If you lack the moral fibre to save for yourself during the year, that's on you.

 

[fiasconva]

My bottom line is simply: I JUST HATE WRITING THEM THAT CHECK!

 

[pharmer]

Did ours on Saturday. Took 45 minutes because the program asks the same questions over and over. Let's just say there are lots of "Underprivileged" that should get a fat bonus this year. Joe

 

[ladder13]

Depending on how much you have to pay, it might be a good thing. Much better to pay a little than it is to get a big refund. Big refund means that you have been loaning money to the government, interest free, for the year.

As painful as it is to have to pay a lot, what that means is that the government has been loaning YOU money, interest free, for the year. That sounds better to me than the other way around!

Personally, I estimate as well as I can, and try to end up either paying just a little, or getting back just a little. This year I'm getting back about $700, which is more than I would prefer, but not too bad.

Our investments, cap gains, are fluid. We have an old CPA friend doing the estimates, so we pay quarterly as not to be-in that penalty area.
It's like trying to post without getting dinged.

 

[kaaskop49]

Ladder13 might remember: In the early 80s, NYS came up with a 2-sided, one-page form to calculate a meaningless tax, about 60 steps, as I recall. Small percentages of amounts had to be multiplied by decimals going 5 characters deep. The final amount after these dozens of steps came to less than $20...

You can't make this stuff up... Oh wait, they could!

Kaaskop49
Shield #5103

 

[Engineer1911]

When I have to pay income tax on 85% of our social security checks, it just burns my corn flakes. Where is my $800 cell phone, $1,000 monthly housing allowance, free health care, and $1,800 monthly grocery allowance?

Is it our fault we don't have a mortgage payment and have to use the 'Standard Deduction', not itemized? Oh, don't forget to write Uncle his check before 4-15.

 

[ladder13]

Ladder13 might remember: In the early 80s, NYS came up with a 2-sided, one-page form to calculate a meaningless tax, about 60 steps, as I recall. Small percentages of amounts had to be multiplied by decimals going 5 characters deep. The final amount after these dozens of steps came to less than $20...

You can't make this stuff up... Oh wait, they could!

Kaaskop49
Shield #5103

And crazy hippie chicks running around Central Park and The Village before that.

 

[Denverd0n]

When I have to pay income tax on 85% of our social security checks...

Really? My wife and I both receive Social Security. It's enough that it covers more than 80% of our expenses. Nonetheless, we only paid tax on less than half of it. You might want to double check your 1040, and compare line 6a to 6b.

 

[kaaskop49]

Standard Deduction? What is that? Is that like the 45 minutes after lunch we were supposed to wait before stepping into a wading pool?

Kaaskop49
Shield #5103

 

[johngalt]

Predicting an uptick in people getting paid in tips next year.

 

[TX-Dennis]

Really? My wife and I both receive Social Security. It's enough that it covers more than 80% of our expenses. Nonetheless, we only paid tax on less than half of it. You might want to double check your 1040, and compare line 6a to 6b.

All that depends on the amount of your other income.

I still think social security benefits shouldn't be taxable. PERIOD.

In my mind it's the same as a Roth account. You already paid tax on what you put into it. The payments should be tax free like a Roth.