What's your average tax rate?

[audreyh1]

Well I won't know this until early April!!!

But we usually end up paying 26% AMT rate. More than half our income is taxed at the capital gains/qualified dividend rate of 15%.

So somewhere between those two numbers!

Audrey

[Empty Pockets]

Don't ya just love that AMT

[jazz4cash]

It's not the Federal taxes that killya. As Justin can attest there's all sorts of ways to get those down if you have kids, tuition, mortgage, etc. I did a detail breakdown last year including FSA, 401k w/ employer match, and other stuff and I'm usually down around 5%. That also included some capitol losses that recently expired. This year I'm around 10%. Turbotax "effective rate" went from 5.9% to 12.7%. Marginal rate is 25%. I have no complaints about this level of taxation, except I'm pretty worried about AMT. Lemme say that again...I think my Federal taxes are reasonable. I've pretty much exhausted my capacity to do tax schemes planning, anyway. Actually, our return is pretty conservative because we can't afford to be audited.

[d]

Quote:

I think my Federal taxes are reasonable

i finished my first pass at my 1040 just the other day and last night was thinking that the feds take a mighty big chunck of my $, and that i'm not getting my money's worth. (taxes are by far my largest expense.) sadly, i doubt that congress cares about how well our dollars are spent, only that they get to spend them, then go looking for more.

[audreyh1]

According to my estimated taxes, the taxes we will pay for 2006 will be almost the same as my (other) total expenses for the year!

We have no kids, no mortgage, no tuition, no state income taxes, no business deductions, no IRA or 401K contributions (we are retired). And any other deductions that we might claim (like charity contributions) get disallowed under AMT.

Audrey

[Telly]

0

[whitestick]

Quote:

Originally Posted by audreyh1 And any other deductions that we might claim (like charity contributions) get disallowed under AMT.

Actually, Charity Contributions are one of the very few things that do get allowed under AMT. At least according to TurboTax, and the CPA neighbor of mine who first told me that.

I actually made a mistake when putting together my income this year, I had started before I got my 1099xxxs so I put in a plug number, and forgot to take it out, and it was buried among all of the trade activity. I thought the AMT monstor had grabbed my by the neck and was choking the life out of me. Couldn't understand why my tax bill exceeded all of my exemptions. When I found the mistake and dropped below the AMT level, I was so relieved, that I didn't even complain about the estimated taxes that I'll have to do do next year just to stay out of the penalty box.

[LOL!]

We're under 15% average this year for income over $200K+. We will also pay about $60 in AMT because we didn't make enough charitible contributions this year. Our first AMT hit ever.

[audreyh1]

Quote:

Originally Posted by whitestick Actually, Charity Contributions are one of the very few things that do get allowed under AMT. At least according to TurboTax, and the CPA neighbor of mine who first told me that.

Oh well - maybe it's the other things that limit charitable deductions that get us (likely). Or maybe something changed and I haven't been paying attention.

Audrey

[sgeeeee]

I'm still waiting on late forms I need to file.

[scrinch]

Quote:

And any other deductions that we might claim (like charity contributions) get disallowed under AMT.

Similarly, our 5 exemptions netted us $5500 in deductions this year. Hit hard by AMT also.

[CyclingInvestor]

AMT virgin no more - I will owe about $275 AMT tax for 2006.

This was mainly due to the "present" I gave myself. I retired in
Oct 2006, and then started my 72t distributions in Dec 2006
with a full year withdrawal.

I figure about 19% fed, 7% state total.

[Sam]

Quote:

Originally Posted by justin $8000 in traditional IRA deductions

Justin, help me out here. I was playing with the 2006 IRA Deduction Worksheet on page 32 of the 2006 1040. If I read it correctly, the maximum IRA deduction is only $1,600 per person if one or both is covered by a pension plan (401k).

Where did I do wrong?

[justin]

Quote:

Originally Posted by Sam Justin, help me out here. I was playing with the 2006 IRA Deduction Worksheet on page 32 of the 2006 1040. If I read it correctly, the maximum IRA deduction is only $1,600 per person if one or both is covered by a pension plan (401k). Where did I do wrong?

dunno... I think for a married filing joint couple, the phase-out of the deductibility of trad IRA's starts at an adjusted gross income (or MAGI?) of $75000. I ended up with "the number" being just under $75000, so I got the full deduction for both of us. If you make too much (and have a pension/401k plan), then you have a partially or wholly nondeductible trad IRA contribution. Not sure where you went wrong with the worksheet on pg 32, but you might be seeing the effect of the trad ira phaseout.

For 2007, it looks like I'll be switching to a roth

[Sam]

Thanks, I will try it out tonight using your number, 75K AGI.