First World Problems

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U

Unidin

Molten Core Raider
842
490
Burren_sl said:
You think taxes will be lower when we're older? They are at historically low levels now and can only go up. When it's time to retire you don't have kids as a write-off and a lot of people don't have home payments to write-off like they used to; overall tax bracket is equal or higher in many cases.

Again, what America has been told and what actually happens are two very different things. If a retirement advisor or money manager tells you that you only need equities (managed mutual funds, stocks, 401k/IRAs) then they shouldn't be in business and you need to find someone else.
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The OP didn't mention kids and specifically said he didn't own a house. On top of it, even if he does own a house, in certain parts of the country, that wont even get him over the standard deduction. I have a house with a mortgage and I'm barely breaking the standard deduction. In fact, I'm in a pretty similar case. I make about what he makes, am single and don't have kids. If he's earning 90k a year and doesn't have anything other than the standard deduction, he's paying almost 14k a year in taxes which is just under 17%. This is only federal too. If at retirement he got the average social security check ($1200 a month) and took out 33k a year from his IRA on top of it he'd pay about 4k a year, which is about 9%.

Also, who said anything about straight equities? You know that mutual funds, 401ks and IRAs can all hold things other than equities right?
 
Sutekh

Sutekh

Blackwing Lair Raider
7,489
106
First world problem, I want Dinosaur BBQ Brisket but it's midnight.

Dino-cornbread+brisket-big.jpg
 
Burren

Burren

Ahn'Qiraj Raider
4,444
6,009
Unidin_sl said:
The OP didn't mention kids and specifically said he didn't own a house. On top of it, even if he does own a house, in certain parts of the country, that wont even get him over the standard deduction. I have a house with a mortgage and I'm barely breaking the standard deduction. In fact, I'm in a pretty similar case. I make about what he makes, am single and don't have kids. If he's earning 90k a year and doesn't have anything other than the standard deduction, he's paying almost 14k a year in taxes which is just under 17%. This is only federal too. If at retirement he got the average social security check ($1200 a month) and took out 33k a year from his IRA on top of it he'd pay about 4k a year, which is about 9%.

Also, who said anything about straight equities? You know that mutual funds, 401ks and IRAs can all hold things other than equities right?
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I know all of those things. It's my job to save people money on taxes, create a retirement, and leave a legacy to family. I think your numbers may be off, however. $90k/yr is the 35% bracket here, not 17% (of course, states matter, so perhaps for you it's 17%, but it would still be 28% federal).

Anyway, my point was; people know - and are taught - about 10% of what's available and what they should do, regardless of kids, a mortgage, marriage, and income level. There are other options out there that are much, MUCH more important and not common knowledge (here's an example; over 2/3s of the deferred comp and retirement plans for executives in Fortune 1000 companies is in cash value life insurance - whole life and IUL - because of the tax-free nature of the income, the guarantees against loss of principle, and the "what if" payments in the death benefit).

The 1% are the 1% because of assets like that. Not tax-deferred vehicles that benefit the gov't.

**spelling error
 
K

Kedwyn

Silver Squire
3,915
80
Burren_sl said:
I know all of those things. It's my job to save people money on taxes, create a retirement, and leave a legacy to family. I think your numbers may be off, however. $90k/yr is the 35% bracket here, not 17% (of course, states matter, so perhaps for you it's 17%, but it would still be 28% federal).
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You're forgetting about exemptions and deductions. $3,950 per person and $12,400 standard deduction. So a family of 3 making 90k a year actually have adjusted gross income of 65k which is a sub 15% rate on his income. Child tax credits drop this further as do contributions to 401k / IRA / HSA etc..

2014 Federal Tax Rates, Personal Exemptions, and Standard Deductions | US Tax Center
 
U

Unidin

Molten Core Raider
842
490
Burren_sl said:
I know all of those things. It's my job to save people money on taxes, create a retirement, and leave a legacy to family. I think your numbers may be off, however. $90k/yr is the 35% bracket here, not 17% (of course, states matter, so perhaps for you it's 17%, but it would still be 28% federal).

Anyway, my point was; people know - and are taught - about 10% of what's available and what they should do, regardless of kids, a mortgage, marriage, and income level. There are other options out there that are much, MUCH more important and not common knowledge (here's an example; over 2/3s of the deferred comp and retirement plans for executives in Fortune 1000 companies is in cash value life insurance - whole life and IUL - because of the tax-free nature of the income, the guarantees against loss of principle, and the "what if" payments in the death benefit).

The 1% are the 1% because of assets like that. Not tax-deferred vehicles that benefit the gov't.

**spelling error
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The tax rate is progressive, so I gave you the percentage of income that he's going to be paying taxes, not the tax rate. Only the top part would be taxed at anywhere near 35%, which is the point. That's the part he's going to save on taxes by putting money into retirement accounts.

I also work with people in the same kind of area. Most of my customers have incomes between 30-100k, so that area is my wheelhouse. They're not executives, so using insurance products that have large costs associated with them often are not the best investment vehicles. If you're looking to leave the money to heirs and get a death benefit, I agree 100% or if you're looking to reduce your taxable income from the investments, that would also work (why CEOs use insurance vehicles).

Also, a couple of posts up you mentioned using a ROTH instead. If he's single, he makes too much money anyway to use that.
 
Hoss

Hoss

Make America's Team Great Again
<Gold Donor>
27,603
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Fuck taxes. Can one of your tax experts help me out real quick? I got a 1099-misc because I got $650 for participating in a research program. It's reported in box 7 and I can't figure out where the fuck I'm supposed to report that on my taxes. The only place that I can find where you'd report box 7 is if you have your own business, and the forms want to know all about the imaginary business if I go that route. I must be missing something.
 
W

Wuyley_sl

shitlord
1,443
13
Hoss_sl said:
Fuck taxes. Can one of your tax experts help me out real quick? I got a 1099-misc because I got $650 for participating in a research program. It's reported in box 7 and I can't figure out where the fuck I'm supposed to report that on my taxes. The only place that I can find where you'd report box 7 is if you have your own business, and the forms want to know all about the imaginary business if I go that route. I must be missing something.
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<---CPA

1099-Misc income will usually hit line 21 of your 1040 if it isn't part of a sch-C business (Self employed). That way you will still be hit with whatever taxes that need to be taken out but you won't be hit with the extra portion of self-employment as if it was on your sch-C.

I don't know what software you are using, and I haven't touched Turbotax (usually the go to for people doing their own) in forever, but there should be a way to make sure you can report it as something other then wages. Look around the gambling winnings / social security / alimony area as it should be around there in your software.
 
Hoss

Hoss

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Thanks Wuyley, I think I found it. I use TaxAct, and I found one for miscellaneous income, such as from prizes or awards.
 
Vaclav

Vaclav

Bronze Baronet of the Realm
12,650
877
Sanrith Descartes_sl said:
It is like the anti-hybrid. It is an electric car with a gas backup. It is always electric but if you exceed the battery range (or just want to go on a long trip) the ice kicks in automatically and powers the generator. It is always electric but sometimes can use the ice to create electricity. Handles well and is quiet on the highway. I am 6'3 and 210. Since it has cockpit seating I would say I am closed to the max weight. Much bigger than me and your ass will be hanging over the seat.
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5'2" and 140 - I don't think that will be an issue, hah.
 
Xeldar

Xeldar

Silver Squire
1,546
133
It's warm enough to have the window open at night except there's the sickening sweet smell of nature blooming.
 
Borzak

Borzak

Bronze Baron of the Realm
25,941
33,945
I get off at 11 on most Fridays now. By 6-7pm I feel like it's time to go to bed.
 
Hoss

Hoss

Make America's Team Great Again
<Gold Donor>
27,603
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I don't get you tag haters. I hate that I can't find underwear with takes anymore because of you people.
 
TrollfaceDeux

TrollfaceDeux

Pronouns: zie/zhem/zer
<Bronze Donator>
19,577
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Chev volt 2014/2015 are getting some heavy discounts right now because of the new generation in 2016. Haggle with dealers for some steep discount on top of manufacturer credit and tax credit. You could potetially own an electric vehicle for around or even below 20k.
 
TrollfaceDeux

TrollfaceDeux

Pronouns: zie/zhem/zer
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Palum_sl said:
Volt doesn't count for the tax rebate or AFV plates because of the way its drive train is configured unfortunately - no idea about the 2016 though.
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I thought it was eligible for 7.5k. I know in Canada Ontario offers couple thousands.
 
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