Who feels they too much taxes?

[lucille]

Originally Posted by amyschiff

The withholding allowances can really make the difference in what you get/owe at the end of the year. I file Single 0 which makes it so they deduct more throughout the year, but then I get a nice refund back.... like a forced savings except that the government gets to earn the interest on your money =(

The more allowances, the higher each paycheck is. But then you will likely end up owing a lot.

For me, it makes more sense to get used to a lower monthly income and then have a nice refund at the end of the year.

If you can locate that sweet spot with deductions where you know about how much your income is going to be that year, know how much you overpaid last year and how many deductions you took on your employer form. I have been able to do this in the past when I had a solid idea what the next year would look like. I would rather overpay $100 than $1000. You can always put that money to work somewhere better. Keeping it accessible as an emergency fund or at least putting it into a savings account. Some employers and some banks will let you do an auto deduction that goes straight into your savings each payday.

[rstlne]

I took the overall percentages from my Federal and State tax returns and added the Social Security, Medicare, and state UI/DI taxes and came up with a total tax of about 32%. That doesn't include the 7% state sales tax, property tax, and various tolls and fees around the state.

Too much? Here's some perspective: Our Founding Fathers fought a Revolution over a tax that was a mere 3%. Now, we're taxed 10 times as much with hardly any protest. But at least we have "representation".

[NaturallyCheap]

Taxable income>>>>>Tax on this income>>>>>>>>>>>>>>>>>>>>>>Effective Tax Rate
$0 – $6,000>>>>>>>>Nil>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>0 %
$6,001 – $30,000>>>>>15c for each $1 over $6,000>>>>>>>>>>>>>>>>0% – 12%
$30,001 – $75,000>>>>$3,600 plus 30c for each $1 over $30,000>>>>>>>>12% – 22.8%
$75,001 – $150,000>>>$17,100 plus 40c for each $1 over $75,000>>>>>>>>22.8% – 31.4%
Over $150,000>>>>>>$47,100 plus 45c for each $1 over $150,000>>>>>>> 31.4% – 45%


Look at the Australian tax rate. Its like robbing you!

[Kathryn]

Originally Posted by andyfvp

Kathryn - The reason I had the high tax bill was that I did set to many witholding allowances, and when my wife got a well paying job mid-year, I should have reset my withholdings. I also have some overseas income which I have to declare as well. So I am not saying my tax due was wrong, it was just a big hit for one payment. However, when I did work out all the taxes (federal, state, medicare, social) I pay it comes to about 45% of my income.

Yeah, but are you looking at your total (joint) tax bill and then calculating how it falls as a percentage of your (single) income? Because you're filing jointly, you should really be comparing your tax bill to your combined income. When you're married, you really can't think in terms of "I pay" and "my income"--it's "we pay" and "our income," even if you do the married-filing separately smoke-and mirrors.

I think it is very close to a mathematical impossibility to owe 45% of household income in fed&state income tax + employee's portion of payroll taxes. If your income is from self-employment, it might be theoretically possible to hit that figure, since you have to pony up the employer's half of FICA taxes.

I don't know where you were living before, but when I compare tax rates and tax complexity in the US, I don't think we have it any worse (and in fact, probably have it better) than most European countries. I'm a freelancer in a field with a lot of European colleagues; I know they have to gross more than I do to produce the same after-tax income, and I am mercifully glad I don't have to deal with the self-employed accounting procedures they do.

[alex]

I'll be paying $7246. Yeah, I feel it's too much.

[Livingalmostlarge]

You're probably not calculating right. I think we barely hit 15% in federal taxes because of deductions. It is hard when married to actually hit 15%, you need to be earning like $150k+. I can't imagine how much you have to earn to pay 33% federal, mainly becuase it's graded. So like everyone else said you pay on each bracket, so to actually pay 1/3 of your income, you'd be earning a LOT!

IE, if you earn $100k but usually only pay $8-10k so 10% at most.

[hermione]

Originally Posted by amyschiff

For me, it makes more sense to get used to a lower monthly income and then have a nice refund at the end of the year.

It might be nice to get a higher refund, but you could be putting the extra monthly income into a high-interest savings account and earning interest on it for yourself rather than giving it to the IRS as an interest-free loan.

I think a moderate withholding allowance would be more preferable. Maybe one that would allow you to still get a refund or pay just a small amount of tax the following April.

Just my two cents. I'm not a tax expert, so I'd recommend getting some advice from someone who knows more about it.

[Milehimama]

Andy,
I did not include medicare, SS, etc. I do not itemize deductions, but I DO have 7 children!
SC gives a bonus credit for each child under the age of 6, and I also qualified for 4 of those.

[kav122]

found this interesting article today:

http://articles.moneycentral.msn.com...es.aspx?page=1

[gtwise]

As Oliver Wendell Holmes wrote, "Taxes are what we pay for civilized society."

While I do think that taxes are excessive, I don't see much of a way to turn it around. I'll just suck it up. Sure I'd love to have lower taxes but it still gives me peace to be able to walk down the street and not worry so much about getting mugged.