Oh come on - a 44% tax increase for 2007?

[whitestick]

Dirty sums of beaches I just found out who's paying the bill for all those 600 checks - and it's me
I thought the problems with increases were going to be with health care costs - with this kind of general tax increase, that makes planning for a health care increase really difficult.
If you want to get your dander up too, check out the increase in federal tax you will pay from 2006 to 2007 if you make 123,700 after your exemptions and deductions. The math shows a 44% increase over 2006. They changed the formula to apply the next band of income to apply to the whole amount, rather then only applying the next higher percentage to the amount over the band. Didn't check, but it may be a similar effect for folks going over the 15% band as well, which could really play hell with people wanting to convert to a Roth and that exceeded that 15% band. Who's responsible for that? Democrats, Republicans, IRS, Iraq, Arabs, Indians, I've got a few words I want to exchange with the responsible party

 

[mathjak107]

i didnt look yet but you sure your not looking at an amt figure which is a flat rate.?

 

[chinaco]

Yes... those rebate checks are not rebates.... they are loans that the tax payer is making.

The problem is that the general citizen has spent until they are deeply in debt. $600 may inject some short-term spending (I understand the ecnomics of it)... but there are some root problems related to American debt that seems to be making us vulnerable.

I look at it like this if everyone is spending tomorrows money. And that borrowed money is driving the economy. Then the growth is based on much personal debt... is that really sustainable growth or is it just huge leveraged risk to our economy and to investors. It seems like a shell game.

 

[OAG]

Dirty sums of beaches I just found out who's paying the bill for all those 600 checks - and it's me
I thought the problems with increases were going to be with health care costs - with this kind of general tax increase, that makes planning for a health care increase really difficult.
If you want to get your dander up too, check out the increase in federal tax you will pay from 2006 to 2007 if you make 123,700 after your exemptions and deductions. The math shows a 44% increase over 2006. They changed the formula to apply the next band of income to apply to the whole amount, rather then only applying the next higher percentage to the amount over the band. Didn't check, but it may be a similar effect for folks going over the 15% band as well, which could really play hell with people wanting to convert to a Roth and that exceeded that 15% band. Who's responsible for that? Democrats, Republicans, IRS, Iraq, Arabs, Indians, I've got a few words I want to exchange with the responsible party

What are you reading? What IRS chart shows this information (1040ES)?

 

[megacorp-firee]

If you want to get your dander up too, check out the increase in federal tax you will pay from 2006 to 2007 if you make 123,700 after your exemptions and deductions. The math shows a 44% increase over 2006. They changed the formula to apply the next band of income to apply to the whole amount, rather then only applying the next higher percentage to the amount over the band.

Whitestick, are you sure you read that correctly?

Sorry I tried to paste in the tax tables, but they did not format correctly so I removed them.

url instead: 2007 Federal Tax Rate Schedules

 

[jIMOh]

My effective tax rate for 2007 was 8% according to turbo tax. My gross income was under what your was by around 20k.

 

[whitestick]

My apologies, that's what I get for posting at 3:00 AM after 3 days of working on taxes. Nevermind, I went back and relooked and realized that I forgot about the amount to be subtracted on the 2006 calculation. Also, I was comparing different AGI amounts for tax bands. The 2006 amount was 123,500 and the 2007 amount was 128,500. It's from the calculations at the end of the tables, in the 1040 tax tables.
The reason, I thought that, was, somehow I apparently have a much higher tax bill (8k more) this year then last, even though gross income, deductions, and income distributions are all within 1000 of last years. Thought I had found the reason, which was why the above rant, but in the light of day, it appears that was incorrect.
Crap! Now to look some more. Sure hope that I don't have to pay that much. Bummer!
Again, my apologies!

 

[Bestwifeever]

And here I thought you lived in my neighborhood and your house too was just reassessed at 50percent over last year's assessment....

 

[Gumby]

And here I thought you lived in my neighborhood and your house too was just reassessed at 50percent over last year's assessment....

Piker. My assessment tripled this year. "Didn't the mill rate come down to compensate?" you might ask. The answer, sadly, would be "no".

 

[free4now]

How tax rebates work in stimulus package

As if this could be more confusing, this article says the "rebate" is based on your 2007 taxes paid, but it has to be paid back when you pay your 2008 taxes.

 

[Dave J]

How tax rebates work in stimulus package

As if this could be more confusing, this article says the "rebate" is based on your 2007 taxes paid, but it has to be paid back when you pay your 2008 taxes.

Help me with my reading comprehension. I don't see where it says you have to pay it back with your 2008 taxes. Please cut and paste the sentence that states that.

I read it just the opposite.

 

[jazz4cash]

Help me with my reading comprehension. I don't see where it says you have to pay it back with your 2008 taxes. Please cut and paste the sentence that states that.

I read it just the opposite.

I read the opposite also, but that's what I expected. Its a one-time tax cut. When people say you will 'pay it back', I think they are trying to say it will reduce your refund (or amount due) by the amount of your rebate. They are cutting taxes now, but witholding will stay the same, so you will be over-witheld without the rebate

 

[OAG]

I doubt that we will know until AFTER the bill is signed (scheduled for today). Only then can the full and complete rules of the game be seen. However, since it is a "cost" to the system why do you think YOU will pay it back directly (indirectly yes, like all the other redistribution schemes of Government)?

 

[free4now]

I probably was confusing when I wrote that it has to be "paid back" Here's the quote from the article that gave me that idea.

The rebates represent a 2008 tax cut. But instead of getting the tax cut next year, when you file your 2008 return, you'll get it this year.

Your 2008 taxes will technically be $600 less than they would have been if the measure never was introduced, but with your 2008 taxes you will have to repay that $600 that you got in May, so your net taxes in 2008 will be the same as if this measure never was introduced.

 

[Dave J]

I probably was confusing when I wrote that it has to be "paid back" Here's the quote from the article that gave me that idea.

Your 2008 taxes will technically be $600 less than they would have been if the measure never was introduced, but with your 2008 taxes you will have to repay that $600 that you got in May, so your net taxes in 2008 will be the same as if this measure never was introduced.

I respectively have to disagree.

Say I had income of $xxx.xx in 2007 that gives me a tax of $2000.
I have $2000 withheld and owe zero when I file.

In 2008 I have the same income of $xxx.00 that produces a tax of $1400.
I have the same $2000 withheld.Since I already got the $600 in May, I owe zero.

I got the refund in May or June this year.

I don't feel I have to "repay" the $600 and my net taxes are $1400 vs: $2000, which is a one year reduction, and is very different(30% less) than if the measure was never introduced.

Now whether I 100% agree with this is a different story, but it is a one time,one year tax reduction.

 

[free4now]

After reading a few more articles, I hereby rescind all of my comments above. This thing is so complicated that any attempt to characterize it in a sentence or two simply is going to be incomplete.

It seems that the way 2008 comes into play is that if you happen to qualify for a bigger rebate based on your 2008 income than based on your 2007, then you can get the difference as a credit while filing your 2008 taxes. I concede that is not the same as "having to pay it back in 2008", except in the most narrow way that your 2008 rebate (if any) is reduced by the amount of your 2007 rebate. Even that last statement isn't quite right, because if your 2007 rebate is greater than your 2008 rebate then the 2007 rebate is not reduced or "paid back" in 2008. Sorry if I confused anyone.

 

[myself]

Actually it's fairly simple to put in a sentence or 2. Here, let me try.

The 2008 rebate will be based on your 2007 AGI. If it is less than $3,000 you will not receive the rebate, and if it is over $150,000 (MFJ), or $75,000 (Single), the rebate will be less than $600/person and $300 for each eligible child.


Information (from the "horse's mouth"):
Information on Stimulus Package
Facts about the 2008 Stimulus Payments
http://www.irs.gov/pub/irs-pdf/f1040.pdf
http://www.irs.gov/pub/irs-pdf/f1040a.pdf
http://www.irs.gov/pub/irs-pdf/f1040ez.pdf


The only unfortunate side-effect of the rebate is that anyone that receives the checks will be helping the country go into debt by $168B.

My in-laws who haven't filed taxes in over 6 years (because their income was too low, since it's basically SS with a very minor amount of pension), will be filing this year, so that they can get this rebate. That's the only way you can get this rebate evidently.

 

[Dave J]

My in-laws who haven't filed taxes in over 6 years (because their income was too low, since it's basically SS with a very minor amount of pension), will be filing this year, so that they can get this rebate. That's the only way you can get this rebate evidently.

Very well stated except for the above part.They should get the rebate without filing.

The following is from http://finance.yahoo.com/taxes/article/104417/Tax-Rebate-Winners-and-Losers

Both Luscombe and Scharin expect the IRS and Social Security
Administration to work together to find eligible rebate recipients who don't have to file. The new law gives the IRS $202 million, the Treasury Department $64 million and the Social Security Administration $31 million in additional funds to administer the rebate program.

 

[OAG]

Information on Stimulus Package. From the IRS Today!

 

[Dave J]

Information on Stimulus Package. From the IRS Today!

According to this webpage,my above post is incorrect and lower income SS recipients will have to file a tax return to get their payment.
Too bad for this.This will mix up a lot of seniors.Seems computors could compare SS lists with tax returns filed and save all these folks from having to file, but I guess this is what I should expect from our govt.

How do I remove my above post,as there is no edit button for it??