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should I feel quilty
Old 12-24-2005, 11:48 PM   #1
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should I feel quilty

Lets just say. If you could legally not pay absolutely any taxes other then fica and medi.. , would you and would you feel quilty about it? And what if you received about 4.5k on top of that in the form of earned income credit and child tax credits as well. Or, what if you and your family could continue to live their current lifestyle and contribute all future raises, bonuses, tax refunds(EIC and child tax credit) into tax deffered accounts? And what if you could do all this with Uncle Sam only seeing 26k-28k as taxable income for a family of 5 when in reality its double that.
This isn't a sales attemp. Its my past and future till retirement (15 years to go)
and its all legal. SHOULD I FEEL GUILTY?
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Re: should I feel quilty
Old 12-25-2005, 12:27 AM   #2
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Re: should I feel quilty

Quote:
Originally Posted by aimhigh
* This isn't a sales attemp. Its my past and future till retirement (15 years to go)* * * *
* and its all legal. SHOULD I FEEL GUILTY?
No; but you should maybe feel concerned about how much you will like prison.*
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Re: should I feel quilty
Old 12-25-2005, 12:42 AM   #3
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Re: should I feel quilty

No prison needed. I'm military so only my base pay is taxable. What ever I put away into tax deferred accounts only brings down my taxable income as well. Its like a slide bar investment strategy. The more we make the more we save to keep us in that tax free zone. We're both Oregon residents as well and as long as we're not stationed in the state then we're exempt from Oregon taxes. I don't get matching contributions to my TSP so I look at the 4.5k I recieve from child tax credits and earned income credit as matched contributions(in a way).
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Re: should I feel quilty
Old 12-25-2005, 12:45 AM   #4
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Re: should I feel quilty

believe me everything is legal and legit. All laws are followed. I just feel a little guilty for actually using all the tax advantages that are thrown my way.
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Re: should I feel quilty
Old 12-25-2005, 04:14 AM   #5
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Re: should I feel quilty

Quote:
Originally Posted by aimhigh
believe me everything is legal and legit. All laws are followed. I just feel a little guilty for actually using all the tax advantages that are thrown my way.
I hope you are kidding but expect you are not. If I could figure out a way
to get food stamps (legally) I would do it. DW says if I ever do, I would have to do the shopping.

JG
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Re: should I feel quilty
Old 12-25-2005, 04:36 AM   #6
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Re: should I feel quilty

Nope - we are in the same situation and don't feel guilty at all. About half of husband's military pay is completely tax free (housing, generous overseas COLA, plus a few other allowances). Since he's also been deployed to Iraq several months of 2004, 2005, and also will be in 2006 and 2007 (all income tax free for those months) and because we stuff a ton of money into TSP we'll have several years of paying very little in federal income tax. Washington residency also means paying zero in state taxes.

If Congress has a problem with this then they would change the rules - as it stands the tax breaks given to the military are a cheap way to give active duty (especially those deployed) a temporary pay raise. Use the benefit to get yourself ahead and to make up for some of the financial harship you endure from having to move every few years.
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Re: should I feel quilty
Old 12-25-2005, 05:26 AM   #7
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Re: should I feel quilty

glad to hear that others are in the same boat. Everytime I mention this to fellow military they give me looks like I'm playing the system. If they only understood that they could be doing the same thing and helping themselves in the long run. If the government is going to give me these large breaks because I choose to save for my retirement, then I'll do just that.
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Re: should I feel quilty
Old 12-25-2005, 05:41 AM   #8
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Re: should I feel quilty

As long as you are following the law, I do not believe you should feel guilty in reducing your taxes, even if you approach zero.
The problem I have is with Congress that cannot match the income and expenditure sides of governmental cash flow, a problem that I believe we all will have to come to terms with in the future.
As an individual, I follow, and take full advantage of the tax law, and vote for those who I hope will best try to act responsibly in Washington (seems too few actually do)!

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Re: should I feel quilty
Old 12-25-2005, 05:51 AM   #9
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Re: should I feel quilty

Quote:
Originally Posted by aimhigh
SHOULD I FEEL GUILTY?
No. Unless you mean that your taxes are easier to do than if you are given more money and return it in taxes. Then, by all means, feel guilty that you don't need a tax preparer for a couple hundred bucks but don't feel guilty about the tax money you didn't receive in the first place.

Does all of this "free" stuff reduce the retirement you would get if it were added to your salary and you paid for it?
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Re: should I feel quilty
Old 12-25-2005, 09:03 AM   #10
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Re: should I feel quilty

Never feel guilty about not paying taxes if you're following the law. It's not your duty to pay more than required, no matter what your income. Remember it's your money.
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Re: should I feel quilty
Old 12-25-2005, 09:37 AM   #11
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Re: should I feel quilty

I didn't feel guilty living overseas and excluding all our income from US taxes. I don't feel guilty now getting hundreds of thousands of dollars in unrealized capital gains (don't count your chickens before they hatch), maxing out my and DW's 401(k) contributions and reducing our AGI to the lowest possible value.

I don't intend to feel guilty when I have an AGI of $0 when my kids start to go to college. In theory I could have a year of living expenses in a money market account plus sell stocks to generate income to live on. The stocks I would sell would probably be losers, so I will offset ordinary income by $3K in those years. I still have carryover losses from 2000, 2001 2002 that I can use.

OTOH, your are in the same cruise ship as a large number of Americans: they pay no income taxes. FICA, sales tax, and property taxes overwhelm any Federal income taxes.

Now if you were making $200K a year from your job, then you should feel guilty.
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Re: should I feel quilty
Old 12-25-2005, 09:52 AM   #12
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Re: should I feel quilty

Both me and my wife were in the military and used every legal tax break we could research and find. Also had a real estate business on the side that generated more deductions and plowed all the refunds into more savings and real estate. I don't regret it or feel guilty at all. If congress didn't want me to have them then they need to change the laws. Until then I'll be deducting my butt off.
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Re: should I feel quilty
Old 12-25-2005, 10:22 AM   #13
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Re: should I feel quilty

Quote:
Originally Posted by aimhigh
If the government is going to give me these large breaks because I choose to save for my retirement, then I'll do just that.
The government is just delighted that military veterans aren't living under freeway overpasses and that active-duty families aren't queuing up on base for the bus to take them downtown to fill out the food-stamp applications.

You've found a way to become a productive member of society without requiring govt charity. I don't think that any taxing authority can ask for more, even if you're not paying into the system any more than they ask for. Anything above that would probably qualify as a charitable deduction!

The military pay & benefits system is a wonderful thing for survivors. Let's not forget that one of the reasons you're getting such a great deal is because at any time you can be asked to go into combat and get those assets shot off. You've worked hard to enjoy the benefits and you've earned them-- let's just hope that you don't have to PAY for them.
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Re: should I feel quilty
Old 12-25-2005, 02:50 PM   #14
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Re: should I feel quilty

Thanks for all the input everyone. It's just that there's always a lot of talk this time of year concerning taxes. When ever I'm asked how much I paid in it seems to raise the eyebrows a little when I answer... nothing. Some actually get upset when I talk about the EIC and child tax credits. I always take the opportunity to tell them how I do it by increasing my tax deferred contributions, thus staying in the "non-tax bracket". Most tend to lose interest at this point once they realize it means maybe giving up those expensive cars and toys. Every now and then someone listens and starts investing in their retirement. I didn't know a thing about compound interest until I was around 28 so I feel great reward in letting others in on the secret. I guess a lot of people out there are just like me and never really understood. I actually had a talk with my parents about investing... wow what a turn around.
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Re: should I feel quilty
Old 12-25-2005, 03:10 PM   #15
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Re: should I feel quilty

Quote:
Originally Posted by aimhigh
It's just that there's always a lot of talk this time of year concerning taxes. When ever I'm asked how much I paid in it seems to raise the eyebrows a little when I answer... nothing.
I think my response would be "No more than I absolutely had to pay" or "About the same as last year", and move the topic of conversation to another subject. The amount of taxes you paid aren't anyone's business but yours (and your spouse if filing a joint return) and the IRS.

No reason to feel guilty...tax evasion is illegal but tax avoidance is as American as apple pie.

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Re: should I feel quilty
Old 12-25-2005, 06:27 PM   #16
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Re: should I feel quilty

Quote:
Originally Posted by REWahoo!
No reason to feel guilty...tax evasion is illegal but tax avoidance is as American as apple pie.
It isn't tax avoidance if no tax is due.
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Re: should I feel quilty
Old 12-25-2005, 07:59 PM   #17
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Re: should I feel quilty

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Originally Posted by MJ
It isn't tax avoidance if no tax is due.
I believe it is. Tax avoidance is why the OP didn't pay any tax. It isn't wrong, unethical, illegal, or even something that would cause you to sweat not finding a gift from Santa under the tree with your name on it. Every tax deduction is a form of tax avoidance. Per Wikipedia:

"Tax avoidance is the legal utilization of the tax regime to one's own advantage, in order to reduce the amount of tax that is payable by means that are within the law. Examples of tax avoidance involve using tax deductions, changing one's tax status through incorporation or, depending on citizenship, establishing an offshore company, trust or foundation in a tax haven."

The OP says he took a number of deductions and made contributions to tax deferred accounts. Absolutely nothing wrong with that, but it IS tax avoidance.

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Re: should I feel quilty
Old 12-25-2005, 08:56 PM   #18
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Re: should I feel quilty

Quote:
Originally Posted by REWahoo!
I believe it is. Tax avoidance is why the OP didn't pay any tax. It isn't wrong, unethical, illegal, or even something that would cause you to sweat not finding a gift from Santa under the tree with your name on it. Every tax deduction is a form of tax avoidance. Per Wikipedia:

"Tax avoidance is the legal utilization of the tax regime to one's own advantage, in order to reduce the amount of tax that is payable by means that are within the law. Examples of tax avoidance involve using tax deductions, changing one's tax status through incorporation or, depending on citizenship, establishing an offshore company, trust or foundation in a tax haven."

The OP says he took a number of deductions and made contributions to tax deferred accounts. Absolutely nothing wrong with that, but it IS tax avoidance.
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Re: should I feel quilty
Old 12-25-2005, 10:17 PM   #19
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Re: should I feel quilty

Quote:
"Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes[. . . . ]" Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).
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Re: should I feel quilty
Old 12-25-2005, 10:38 PM   #20
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Re: should I feel quilty

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Originally Posted by aimhigh
* * . . . SHOULD I FEEL GUILTY?
Yes. Absolutely. I'm sure you should and do feel guilty. I see this as a progressive problem for you. The guilt will build until you can't sleep at night. Eventually, the lack of sleep will drive you quite mad. The insanity will cause you to turn violent -- maiming or killing your own pet, or perhaps a small farm animal. Your crimes will progress until you are imprisoned for life.

Fortunately, I can offer you a way to repent and redeem yourself -- thereby eliminating your guilt and possibly saving an innocent sheep or goat. You need to carefully calculate the value of your tax breaks and send 1/2 of that amount to me. By sharing your good fortune with someone who is not eligible for the tax breaks, you will alleviate the guilt, allow yourself to sleep again, and save an innocent animal.

You don't have to thank me. Just send the check.
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