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01-16-2013, 03:40 PM
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#41
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
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Quote:
Originally Posted by donheff
Since I am not going to be in a high rate for the foreseeable future and am not subject to payroll tax all I see is a permanent tax cut.
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Same for us.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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01-16-2013, 03:54 PM
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#42
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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Got hit with the sunsetting of the SS reduction. Planned for it - so no biggy.
Slight increase in sales tax here in Cali... haven't really noticed because... well... I hate shopping for anything other than groceries...which are tax free.
I'll continue to benefit from the child deductions since those were extended.
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01-16-2013, 04:09 PM
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#43
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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I am absolutely delighted - nah thrilled - that income tax rates remained at the incredibly low levels I've seen for the last decade. My Federal tax payments have been near non existent since I retired at the end of 2002 and for this gift to be made "permanent" is amazing to me. I've just started collecting SS (turned 62 a few months ago) So am also very pleased that the wage slaves are contributing to my pot in the appropriate manner
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01-16-2013, 04:21 PM
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#44
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,655
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I pay 7% into a DB pension plan and don't pay into SS, so the FICA tax holiday did me no favors and I don't miss it
Others at work are moaning, though. Funny, I remember people dismissing the small gain they saw from the payroll tax holiday when it first came into effect. I guess that is human psychology: We tend to regret a loss more than we appreciate a gain of the same amount.
We make way below the "rich people" threshold, so our Federal tax rates will stay the same. We have been paying AMT for years and I guess we will continue to do so.
OTOH, our property tax went up $400 last year - despite no increase in valuation - as MD passed teachers' pension costs to the counties. I guess in the end, we are all robbing each other to pay for each other
Amethyst
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
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01-16-2013, 04:36 PM
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#45
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by ejman
I am absolutely delighted - nah thrilled - that income tax rates remained at the incredibly low levels I've seen for the last decade........
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It is amazing isn't it? And we haven't borrowed a dime to cover our expenses.
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01-16-2013, 04:46 PM
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#46
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Noted. Was tempted but decided not to veer off into political lala land...
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01-16-2013, 04:50 PM
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#47
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,901
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IF (big if) restoration of this tax means scheduled SS benefits will be fully funded for my lifetime, it will not hurt but rather help.
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01-16-2013, 05:03 PM
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#48
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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The 2% payroll tax is noticeable but has no bearing on my already light spending. It's just a little less put into savings. I never saw the sense in the temporary reduction anyway. That's all I've got to say about that. Any more and I'd go political real quick.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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01-16-2013, 06:04 PM
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#49
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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I don't really know, since this is the first year I will only have pension income (besides investments). I never paid the SS payroll tax, only money to the state. For some unfathomable reason, my state does not currently tax retirement income, so my guess is that I'll be better off (until they completely run out of money!)
__________________
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01-16-2013, 08:24 PM
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#50
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,719
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My pay is down about 5% from end of last year. That's some combination of 2% more to SS, 401(k) bumped up a few points, and more withholding for certain state taxes until a max is reached.
I might get another whopping 2% raise this year, so that will offset the SS tax going back to normal.
Oh yeah, it will have some effect on my consulting income taxes, but I don't consider that harmful.
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01-16-2013, 08:28 PM
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#51
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Just a little fair warning, this is only the beginning.....2014 will hit us a lot harder........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-16-2013, 08:34 PM
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#52
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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Quote:
Originally Posted by FinanceDude
Just a little fair warning, this is only the beginning.....2014 will hit us a lot harder........
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SS and Medicare are on the table. My guess is they each go up a year in age. I thought that was in 2013 what happens in 2014?
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01-16-2013, 08:39 PM
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#53
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,708
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Quote:
Originally Posted by FinanceDude
Just a little fair warning, this is only the beginning.....2014 will hit us a lot harder........
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QQ47?
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01-16-2013, 10:40 PM
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#54
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,695
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Having ERed in late 2008 I did not benefit from the payroll tax reduction so I am not hurt by the end of the payroll tax holiday. I pay zilch, of course.
I have benefitted more and more from the 0% federal income tax on QD and LTCG. When I combine that with the tax-free interest on the muni bond funds in my taxable accounts, I end up with only 62% of my income subject to federal income taxes.
My ladyfriend has not been happy about seeing her first 2013 paycheck drop compared to 2012's. But I reminded her that she has seen a reduction in two key expenses in 2012 so it was good timing that she had that payroll tax cut when her expenses had not yet dropped. Some of her other expenses have risen so is not in as good a shape as she was only a month ago. However, she is better shape than she was 2-3 years ago.
New York State slightly cut some of the state income tax rates starting in 2012 so I get a small tax cut there, too. What is kinda amazing is that despite my marginal tax rate for NY being about 6.5% and my marginal tax rate (for ordinary income) being 15%, I pay nearly the same amount in state income taxes as I do federal income taxes.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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01-17-2013, 04:36 AM
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#55
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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I don't know since my 401k percentage deduction has changed, and I haven't checked the precise amounts.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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01-17-2013, 09:49 AM
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#56
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Full time employment: Posting here.
Join Date: Jan 2013
Posts: 681
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Even though I am retiring next month, I will be getting about $65,000 in earned income for the year because I am eligible to convert a significant amount of accrued leave into a cash payment upon retirement. So the higher payroll taxes this year will cost me $1,300 compared to retiring before the end of 2012. Retiring last year would have left me a net loser, however. All of the cash payment would have been taxed in the 25% bracket last year, whereas this year I should be able to stay in the 15% bracket.
As others have remarked, making permanent the 0% tax on capital gains and qualified dividends for people in the 15% bracket leaves me a big net winner from the new tax law. This 0% rate is worth far more than the immediate $1,300 hit I am taking due to higher payroll taxes.
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