FinanceDude
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Aug 3, 2006
- Messages
- 12,483
Just a little fair warning, this is only the beginning.....2014 will hit us a lot harder........
Has new tax rate in 2013 harmed you?
- Thread starter LeavingOhio
- Start date
FANOFJESUS
Thinks s/he gets paid by the post
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?
QQ47?
scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,699
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.
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.
obgyn65
Thinks s/he gets paid by the post
I don't know since my 401k percentage deduction has changed, and I haven't checked the precise amounts.
Last edited:
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.
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.
Similar threads
