How Retirees Pay Zero Taxes

[kaneohe]

Some data from the tax calculator: MFJ (both >65), std deduction

for a given level of ordinary income, about how much CG to start getting AMT?

ord. inc. CG for AMT
10K 365K
100K 145K
150K 85K
285K 0K

The higher the ordinary income, the less CG it takes to be affected by AMT.
Kind of makes sense qualitatively since the higher total incomes get affected more esp. since the AMT exemption gets reduced and then phased out completely at higher incomes............ some of us peasants rarely see AMT so for those of you who volunteered info about AMT.........your secret is out Now we know where to go for handouts.........

 

[kmt1972]

Speaking of tax calculators

Tax Foundation's Tax Policy Calculator

is very good. It actually takes into account of different scenarios and estimates what the tax brackets would be in 2014 as they are adjusted for inflation.

 

[pb4uski]

You attacked me personally -- twice (calling me "holier-than-thou” and judgmental). That, IMO is very different from expressing an opinion or judgment about an issue or a fictitious individual as I did.

I could have "ignored" you for doing that but I hoped you'd get the message when I called it out the first time. Maybe moderators can do a better job at it. I rarely "ignore" members here.

Be well.

For the record, I did not call you holier-than-thou, I called your attitude holier-than-thou. Go back and read the post.

By opining that "real" Americans are about donating more than 10% of their earnings to charity you inferred that those who do not donate 10% or more of their earnings to charity (the vast majority of citizens) are un-American. Three posters (me and two others) call you out on that one and I'm the one making "personal" attacks?

Whatever.

 

[pb4uski]

Sorry I don't agree. America and Americans certainly give to charity and the US aid budget is biggest. But should we look at total amount of charity, the amount given per citizen or just the percentage of citizens that give. I don't see Americans as inherently more charitable than any other country. Even the tendency to express exceptionalism isn't uniquely American.

Actually, the US led the world in the 2011 World Giving Index and dropped to 5th in 2012 (the most recent year available) and was also 5th in 2010. So the US was near the top in each of the last 3 years.

 

[Beryl]

opining that "real" Americans are about donating more than 10% of their earnings to charity you inferred that those who do not donate 10% or more of their earnings to charity (the vast majority of citizens) are un-American.

I should let this go because it is off-topic but I've never allowed my words to be twisted - unchecked- and don't intend to start now.

Read my post again - I said donating time AND money is American. Picking and choosing parts of my post to support an erroneous interpretation is your choice but I will call you on it as it did your earlier statement about donating 10% being "in fact, virtually unheard of" and then said "Of course I have heard of tithing." If a=b, and b=c, then a=c.

Inferring that I said that those who do not give are UNAmerican does not follow rules of logic. It is as illogical as this:

Me: Dogs have tails
You: You are saying that my Schipperke is not a dog!!
Me: I didn't say ALL dogs have tails.

Infer away because you have that freedom but that does not mean your inference accurately reflects my words.

 

[Amethyst]

Funny, I acquired selective-ignoring as a member of a family, and often apply it at work. Nothing like siblings who infuriate you one minute, and crack you up the next.

In almost 5 years, I have only ever put one forum member on "ignore." I did it so I would not be tempted to respond to their posts. So it was more about my weakness, than theirs.

Amethyst

Learning to ignore what some people say is a skill I acquired at work and often apply at family get-togethers.

 

[pb4uski]

....I said donating time AND money is American. ....

Thanks for the clarification.

 

[eytonxav]

Learning to ignore what some people say is a skill I acquired at work and often apply at family get-togethers.

Come on, folks. Lets take a step back, a deep breath, and remember we're friends who can disagree but stay friends.

Can we infer this is a sign of wisdom?

 

[KingB]

In almost 5 years, I have only ever put one forum member on "ignore."
Amethyst

I hope it is not me.

I love the way this thread went through several topics and I just have to put a mark on it.

 

[MooreBonds]

Learning to ignore what some people say is a skill I acquired at work

lol....+1!

and often apply at family get-togethers.

+10!

 

[FANOFJESUS]

I hope no one has but me on a ignore list. I like you all.

 

[REWahoo]

Did someone post something?

 

[sengsational]

Not to be too cynical, but complex tax codes that legally allow deductions and "tax expenditures" to narrow groups is exactly what campaign contributions buy. That's why they're never addressed despite populist support, they just add new ones and increase complexity. Campaign finance is at the root of many of our policy issues...often making debates on issues irrelevant.

That's why overturning Buckley vs Valeo would be one of the best things that could happen for more responsive (to the people) US politics. But, alas, I seriously doubt it will ever happen. I'm not sure if it was the American thing to do or not, but my donations went to The National Voting Rights Institute (NVRI) for years to help them fight this battle. But the primary mover/shaker, John Bonifaz, finally moved on.

 

[Tyro]

Funny, I acquired selective-ignoring as a member of a family, and often apply it at work. Nothing like siblings who infuriate you one minute, and crack you up the next.

Sis? Is that you?

 

[Tyro]

Did someone post something?

 

[pb4uski]

What was this thread about?

Oh, I remember now. Actually I was proud to be able to structure my finances so that my federal income tax last year, my first full year of retirement, was zero! Probably the first time since I was a young teenager.

 

[obgyn65]

I have only one name on my ignore list, I must say it is very helpful.

Try it, you will like it.

 

[travelover]

I have only one name on my ignore list, I must say it is very helpful.

Yea, it is a feature that grows on you.

 

[pb4uski]

I have only one name on my ignore list, I must say it is very helpful.

None for me, but there have been a few close calls over the years.

 

[brett]

Years and years ago, in another life, I worked for the Canadian version of the IRS. I was in a group that conducted personal and business audits.

Computerization was used to scan returns for anomalies, but those that were got spit out were reviewed by our supervisors.

One type of return ALWAYS got marked for audit. It was the returns where the individual appeared to tithe at 10 percent. But when the donation and the income were matched, the numbers did not jive.

Invariably, on those returns that were selected for audit, the charitable donations were spot on.....while the income was understated by a considerable amount. They were the easiest audits for us as we had a goal of how much we should be recovering per hour of audit.

 

[haha]

Years and years ago, in another life, I worked for the Canadian version of the IRS. I was in a group that conducted personal and business audits.

Computerization was used to scan returns for anomalies, but those that were got spit out were reviewed by our supervisors.

One type of return ALWAYS got marked for audit. It was the returns where the individual appeared to tithe at 10 percent. But when the donation and the income were matched, the numbers did not jive.

Invariably, on those returns that were selected for audit, the charitable donations were spot on.....while the income was understated by a considerable amount. They were the easiest audits for us as we had a goal of how much we should be recovering per hour of audit.

Well my heavens, how could this be Must be a solely Canadian thing, you think?

Ha

 

[ERD50]

Years and years ago, in another life, I worked for the Canadian version of the IRS. I was in a group that conducted personal and business audits.
....

Invariably, on those returns that were selected for audit, the charitable donations were spot on.....while the income was understated by a considerable amount. They were the easiest audits for us as we had a goal of how much we should be recovering per hour of audit.

I'm curious about this. I would think it would be rather tough to find understated income. Wouldn't that take some detective work?

-ERD50

 

[brett]

It is very easy...unless it is cash income or cheques deposited in an offshore account.

Tax authorities have access to bank accounts-whether or not the taxpayer is cooperative.

If you have the bank accounts, it is a fairly simple process to add up the deposits, then subtract all the non income items such as term deposits being redeemed, etc. You will then have a handle on income and can go back and tick off the items that are accounted for. I can recall a few of my audits where the charitable donations to churches were especially high compared to declared income. Once I had the bank statements it did not take long to find the unreported income.

And if it is a cash situation, a net worth can be done for each year and the income deduced. The latter is more difficult.

 

[pb4uski]

Years and years ago, in another life, I worked for the Canadian version of the IRS. I was in a group that conducted personal and business audits.

Computerization was used to scan returns for anomalies, but those that were got spit out were reviewed by our supervisors.

One type of return ALWAYS got marked for audit. It was the returns where the individual appeared to tithe at 10 percent. But when the donation and the income were matched, the numbers did not jive.

Invariably, on those returns that were selected for audit, the charitable donations were spot on.....while the income was understated by a considerable amount. They were the easiest audits for us as we had a goal of how much we should be recovering per hour of audit.

Just curious - if the donation and income numbers didn't "jive" how would you know that the individual "appeared" to tithe at 10%? versus that their contributions were just lower than 10% of their reported income?

IOW, if all you know is the reported income and reported contributions number how could you have any insight as to whether a taxpayer tithed or not? (absent some sort of profiling based on surname or whatever).

 

[ERD50]

Just curious - if the donation and income numbers didn't "jive" how would you know that the individual "appeared" to tithe at 10%? versus that their contributions were just lower than 10% of their reported income?

IOW, if all you know is the reported income and reported contributions number how could you have any insight as to whether a taxpayer tithed or not? (absent some sort of profiling based on surname or whatever).

I think what he is saying is, if they see $50,000 reported income, and $5,000 reported donations, that it raised red flags.

They maybe reporting all their donations, but not reporting all their income. Based on his observation that actual 10% donations was rare.

-ERD50