At my job, we're behind schedule right now and are working 6 9's to
get the building under roof by New Year's Day. BTW, steel stud
framing outside in the weather lately has been a real treat. Anyway,
on to my question:
Does the rate at which one is taxed vary with time and a half or
double time, or does it change with gross pay or does it not change at
all? I realize that the W4 exemptions establish the basic rate, but
do you pay more (percentage-wise) with overtime? I heard a story from
a welder who was making $12/hr said that for 6 months he was working
mandatory 50-hour weeks, then went to mandatory 60-hour weeks; his
paycheck difference was only about $30. Intuition tells me that this
is crazy and I've never paid that much attention to the actual amount
withheld when I've worked over 50 hours (other than to cuss the
federal and state governments).
Myself, I'd just as soon see income (and property and fuel etc.) tax
go away entirely, but since I'm stuck with it I would at least like to
know how far they're gonna ram it in before they break it off.
If anybody has some insight, I'd appreciate it.
-Phil Crow
As an employer who does his own payroll, I suspect they are blanket taxing
the bonuses at 40% to keep from having to figure them through the tax
tables, consider each employees withholding status and them making an IRS
deposit each time they write bonus checks. In our business, we add the
bonuses into the regular paychecks to cut down on the caclulating overhead
and extra deposits to the IRS.
Bernie
"Mark" <[email protected]> wrote in message
news:[email protected]...
> In article <[email protected]>,
> [email protected] says...
> > [email protected] (Phil Crow) wrote in
> > news:[email protected]:
> >
> > > Does the rate at which one is taxed vary with time and a half or
> > > double time, or does it change with gross pay or does it not change at
> >
> > Changes with gross pay, as has already been posted. However,
> > _bonuses_ have tax withheld at a higher rate, 40% IIRC. Where I work,
our
> > "overtime" is treated as a bonus (has to do with the fact that we're
sort
> > of salaried, sort of hourly), so tax is withheld from that at a higher
> > rate. The actual tax rate isn't any higher, but for some reason the
> > withholding rate is. We get most of that back at the end of the year;
just
> > have to wait for it.
> >
> Me thinks your employer is scamming you.
> --
> Mark
>
> The truth as I perceive it to be.
> Your perception may be different.
>
> Triple Z is spam control.
>At my job, we're behind schedule right now and are working 6 9's to
>get the building under roof by New Year's Day. BTW, steel stud
>framing outside in the weather lately has been a real treat. Anyway,
>on to my question:
>
>Does the rate at which one is taxed vary with time and a half or
>double time, or does it change with gross pay or does it not change at
>all? I realize that the W4 exemptions establish the basic rate, but
>do you pay more (percentage-wise) with overtime? I heard a story from
>a welder who was making $12/hr said that for 6 months he was working
>mandatory 50-hour weeks, then went to mandatory 60-hour weeks; his
>paycheck difference was only about $30. Intuition tells me that this
>is crazy and I've never paid that much attention to the actual amount
>withheld when I've worked over 50 hours (other than to cuss the
>federal and state governments).
>
>Myself, I'd just as soon see income (and property and fuel etc.) tax
>go away entirely, but since I'm stuck with it I would at least like to
>know how far they're gonna ram it in before they break it off.
>
>If anybody has some insight, I'd appreciate it.
>
>-Phil Crow
Your actual tax rate charged when you file that final return sometime before
April 15 generally will NOT change based on your overtime. There is a slight
chance that your total income will increase to the point that you move over to
a higher tax bracket, but that will apply only to the income in excess of the
tax bracket break point.
That said, however, I believe that you are asking if the rate of WITHHOLDING
increases in your periodic paycheck. That very well could happen for various
reasons. First, your company's payroll departrment may not be very
sophisticated (especially if it is a small company not using a large payroll
service firm) and the withholding regulations are complex. Second, the
withholding regulations generally assume that what you made during any given
pay period is what you will make in ALL pay periods. This often grossly
overstates your estimated ANNUAL earnings, puts you into a higher assumed tax
bracket and causes the payroll dept to over withhold (this happens a lot with
annual bonus situations). Consider filing a new W-4 with additional dependents
for the overtime period, switch back after returning to normal hours. In any
case, the amount withheld does not impact your actual taxes. It only impacts
the size of your refund or additional payment when filing your return. If they
take more, the refund is higher (and you gave Uncle Sam an interest free loan).
If they take less the refund is smaller or you may owe at year end. If that is
the case, don't spend it all before tax time - Uncle Sam doesn't pay interest
on those "loans" but he sure charges interest and penalties if you don't pay on
time.
Dave Hall
The tax withholding rate is based on a formula where:
Gross pay in any given pay period times number of pay periods per year
equals an estimated annual income. Based on your W-4 exemptions, the
withholding is estimated to be roughly equal to that pay-period's portion
of your total tax bill for the year.
The hook is that if you get paid 2 times/month, that's 24 paychecks
per year. If you make $10/hr times 40 hours per week, that's about
$935 gross per half-month (based on 187 hours per average month at
40 hrs/week). Thus a $935 gross paycheck calculates to an annual
income of about $22,440 per year.
On the other hand, if you work an extra 20 hours per week for a month,
your income goes up by 75%, or $1636 gross per check. That then looks
to the IRS withholding formula like you are making $37,270.
Let's say you are married and your exemptions and deductions are
about $12,000 per year, so your taxable income is about $10,000.
The tax on that would be somewhere around $1300-1500 per year.
BUT, if you had the same deductions and made $37,270, your taxable
income is $25,000 per year, and the tax on that is closer to $4000
per year, and the withholding for federal income tax per check
with overtime would be close to $175 instead of $50. Add to that
the additional social security tax of $55 or so for a total increase
of federal taxes of $180 plus additional state income tax, and that
knocks a big hole in your overtime income.
It's a screwed-up system, but it's the only game in town.
CE
"Doug Miller" <[email protected]> wrote in message
news:EPmDb.16390$P%[email protected]...
> In article <[email protected]>, "Jay"
<[email protected]> wrote:
> >It seems many people know all about the tax rules, but what bothers me is
> >Phil's comments on taxes going away. If we don't pay taxes, who paves and
> >fixes roads, who pays for the fire engines and crews that come and
attempt
> >to save your house and personal belongings, who pays ... [snip]
>
> I didn't read that as advocating the abolition of *all* taxes, just
*certain*
> ones.
>
> He's right IMO about most of them. I'd like to see all taxes abolished
except
> sales tax. Main reason? It's the _only_ way of taxing illegally-earned
income.
> Sure, there might be one or two drug dealers somewhere who actually report
> their income on a 1040, but depend on it, they're in a tiny minority. So
how
> do you tax these guys? Get 'em when they spend it.
>
> --
> Doug Miller (alphageek at milmac dot com)
>
> How come we choose from just two people to run for president and 50 for
Miss America?
The standard answer on that is that sales taxes are a very regressive way of
collecting taxes. I don't necessarily disbelieve that, but I wouldn't mind
seeing the data that backs that up.
todd
todd responds:
>The standard answer on that is that sales taxes are a very regressive way of
>collecting taxes. I don't necessarily disbelieve that, but I wouldn't mind
>seeing the data that backs that up.
>
Shouldn't be all that difficult, from what I'm told. A 20-25% sales tax on just
about everything is going to do one helluva whack job on the grocery bills for
poor households and be almost unnoticed in wealthier households. Same on
essential clothing, fuel, similar items.
At the same time, it seems to me that the wealthier households will actually
pay far more taxes than is now the case, because everything that is bought will
carry a sizeable tax load, grabbing money that may come from low tax or untaxed
sources. People with more money buy more, period. The guy who pays $300,000
for a Ferrari, though, is well able to afford the extra load (the assumption
goes), while the poorer person who pays, say $12,000 for a Kia cannot afford
another 25% and will not benefit commensurately with the reduction or
elimination of income tax.
Taxes are a crapshoot, it seems to me. Whether it's single tax, sales tax,
graduted income tax or some other scheme, some taxpayers are going to get
screwed, or, at the very least, feel like they're being screwed.
And I don't see any single tax schemes ever passing. If one did, what would
happen to the 175,000 or so IRS employees, not to mention the boxcar loads of
bookkeepers and CPAs who are tax specialists. Or even the semi-trained types
who get it wrong when you take your tax records to H&R Block.
And you always have the taxpayer who swears up and down he NEVER uses anything
any government supplies, so shouldn't have to pay taxes.
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
What Doug said. But, let me add, that once you fill out your 1040,
you should get a slight refund, since, of course, your annual gross
pay isn't (e.g.) $35/hour. You Are making more money (and it May push
you into a higher bracket), but you aren't grossing an Annual salary
like the OT seems to make it (IOW, you aren' making
52(wks) * 40 (hrs) * (e.g.) $35 (plus the OT hours).
Renata
On Sun, 14 Dec 2003 14:47:39 GMT, [email protected] (Doug Miller)
wrote:
>In article <[email protected]>, [email protected] (Phil Crow) wrote:
>>At my job, we're behind schedule right now and are working 6 9's to
>>get the building under roof by New Year's Day. BTW, steel stud
>>framing outside in the weather lately has been a real treat. Anyway,
>>on to my question:
>>
>>Does the rate at which one is taxed vary with time and a half or
>>double time, or does it change with gross pay or does it not change at
>>all?
>
>Changes with gross pay. The more you make, the higher the rate at which you
>are taxed. Overtime has nothing to do with it: suppose your base rate is
>$20/hour. If you work 60 hours, 40 at straight time and 20 at time and a half,
>you make (40 hr x $20) + (20 hr x $30) = $1400. You get taxed the same as if
>you had worked 40 hours at $35/hour.
smart, not dumb for email
[email protected] (Doug Miller) wrote in message news:<EPmDb.16390$P%[email protected]>...
> In article <[email protected]>, "Jay" <[email protected]> wrote:
> >It seems many people know all about the tax rules, but what bothers me is
> >Phil's comments on taxes going away. If we don't pay taxes, who paves and
> >fixes roads, who pays for the fire engines and crews that come and attempt
> >to save your house and personal belongings, who pays ... [snip]
>
> I didn't read that as advocating the abolition of *all* taxes, just *certain*
> ones.
>
> He's right IMO about most of them. I'd like to see all taxes abolished except
> sales tax. Main reason? It's the _only_ way of taxing illegally-earned income.
> Sure, there might be one or two drug dealers somewhere who actually report
> their income on a 1040, but depend on it, they're in a tiny minority. So how
> do you tax these guys? Get 'em when they spend it.
Ever heard of black markets? There are ways around any tax scheme. We
were funded by import duties and excise taxes until 1913 (except for a
few years during the Civil War when an illegal income tax was
imposed).
Dave Hall
In article <[email protected]>, "Jay" <[email protected]> wrote:
>It seems many people know all about the tax rules, but what bothers me is
>Phil's comments on taxes going away. If we don't pay taxes, who paves and
>fixes roads, who pays for the fire engines and crews that come and attempt
>to save your house and personal belongings, who pays ... [snip]
I didn't read that as advocating the abolition of *all* taxes, just *certain*
ones.
He's right IMO about most of them. I'd like to see all taxes abolished except
sales tax. Main reason? It's the _only_ way of taxing illegally-earned income.
Sure, there might be one or two drug dealers somewhere who actually report
their income on a 1040, but depend on it, they're in a tiny minority. So how
do you tax these guys? Get 'em when they spend it.
--
Doug Miller (alphageek at milmac dot com)
How come we choose from just two people to run for president and 50 for Miss America?
In article <[email protected]>,
[email protected] says...
> [email protected] (Phil Crow) wrote in
> news:[email protected]:
>
> > Does the rate at which one is taxed vary with time and a half or
> > double time, or does it change with gross pay or does it not change at
>
> Changes with gross pay, as has already been posted. However,
> _bonuses_ have tax withheld at a higher rate, 40% IIRC. Where I work, our
> "overtime" is treated as a bonus (has to do with the fact that we're sort
> of salaried, sort of hourly), so tax is withheld from that at a higher
> rate. The actual tax rate isn't any higher, but for some reason the
> withholding rate is. We get most of that back at the end of the year; just
> have to wait for it.
>
Me thinks your employer is scamming you.
--
Mark
The truth as I perceive it to be.
Your perception may be different.
Triple Z is spam control.
[email protected] (Phil Crow) wrote in
news:[email protected]:
> Does the rate at which one is taxed vary with time and a half or
> double time, or does it change with gross pay or does it not change at
Changes with gross pay, as has already been posted. However,
_bonuses_ have tax withheld at a higher rate, 40% IIRC. Where I work, our
"overtime" is treated as a bonus (has to do with the fact that we're sort
of salaried, sort of hourly), so tax is withheld from that at a higher
rate. The actual tax rate isn't any higher, but for some reason the
withholding rate is. We get most of that back at the end of the year; just
have to wait for it.
In article <[email protected]>, [email protected] (Phil Crow) wrote:
>How many millions of dollars a year would federal and state
>governments save in payroll, facilities, etc. by the abolition of the
>ENTIRE Internal Revenue Service?
>
Not much, actually. The IRS doesn't employ that large a portion of the Federal
work force.
The biggest savings would come in the disappearance of the burden of complying
with that silly-ass overgrown tax code. _That_ would be enormous.
--
Doug Miller (alphageek at milmac dot com)
How come we choose from just two people to run for president and 50 for Miss America?
On Mon, 15 Dec 2003 10:01:09 -0800, Jay wrote:
> It seems many people know all about the tax rules, but what bothers me is
> Phil's comments on taxes going away. If we don't pay taxes, who paves and
> fixes roads, who pays for the fire engines and crews that come and attempt
> to save your house and personal belongings, who pays for the cops that
> protect you as best they can, who brings water to your house, takes used
> water and waste away from your house, etc. This would be a sorry country if
> we didn't have taxes. I agree that taxes are wasted much of the time, but if
> we didn't have them, we wouldn't have much. My 2 cents.
All the things you mentioned are paid by city/count/state (local) taxes,
not Federal Income Tax - at least that's the way it's supposed to be.
Federal taxes are supposed to pay for the military/defense and
commerce/trade related things - at least that's the way it's supposed to
be.
-Doug
Doug Winterburn responds:
>> It seems many people know all about the tax rules, but what bothers me is
>> Phil's comments on taxes going away. If we don't pay taxes, who paves and
>> fixes roads, who pays for the fire engines and crews that come and attempt
>> to save your house and personal belongings, who pays for the cops that
>> protect you as best they can, who brings water to your house, takes used
>> water and waste away from your house, etc. This would be a sorry country if
>> we didn't have taxes. I agree that taxes are wasted much of the time, but
>if
>> we didn't have them, we wouldn't have much. My 2 cents.
>
>All the things you mentioned are paid by city/count/state (local) taxes,
>not Federal Income Tax - at least that's the way it's supposed to be.
>Federal taxes are supposed to pay for the military/defense and
>commerce/trade related things - at least that's the way it's supposed to
"Supposed to be" is right up there with "justice" as a concept, I think. We
don't see many things done as they're supposed to be done, nor is justice done
with any great regularity.
It would be interesting to see just how schools would fare today if all Federal
monies were cut off. Too, how many roads would we have without Federal support?
Start by doing a wipe on the entire Eisenhower concept, the Interstates.
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
Doug Winterburn wrote:
> All you gotta do is look at the trucking traffic on the interstates (at
> least in the west) to realize they are a valid commerce item, unlike
> Social Security and Medicare which for some strange reason have been
> justified under the commerce clause. OTOH, I expect local taxes to fully
> fund my side street after I have had a chance to vote on the bond issue.
>
> -Doug
The "interstates" were supposedly constructed for military purposes.
--
Jack Novak
Buffalo, NY - USA
(Remove "SPAM" from email address to reply)
[email protected] (Charlie Self) wrote in message news:<[email protected]>...
> Doug Winterburn responds:
>
> >> It seems many people know all about the tax rules, but what bothers me is
> >> Phil's comments on taxes going away. If we don't pay taxes, who paves and
> >> fixes roads, who pays for the fire engines and crews that come and attempt
> >> to save your house and personal belongings, who pays for the cops that
> >> protect you as best they can, who brings water to your house, takes used
> >> water and waste away from your house, etc. This would be a sorry country if
> >> we didn't have taxes. I agree that taxes are wasted much of the time, but
> if
> >> we didn't have them, we wouldn't have much. My 2 cents.
> >
> >All the things you mentioned are paid by city/count/state (local) taxes,
> >not Federal Income Tax - at least that's the way it's supposed to be.
> >Federal taxes are supposed to pay for the military/defense and
> >commerce/trade related things - at least that's the way it's supposed to
>
> "Supposed to be" is right up there with "justice" as a concept, I think. We
> don't see many things done as they're supposed to be done, nor is justice done
> with any great regularity.
>
> It would be interesting to see just how schools would fare today if all Federal
> monies were cut off. Too, how many roads would we have without Federal support?
> Start by doing a wipe on the entire Eisenhower concept, the Interstates.
>
>
> Charlie Self
Federal support for schools is very small. In my District less than 1%
of total spending is federally funded. Roads are built by the feds
from federal gas taxes. We could build just as many roads if the feds
went away and the state levied the additional gas tax - we just
wouldn't be able to funnel it to those states and districts with the
"right" legislators and senators. A case in point is your Senator, Bob
Byrd, and all the road money he brings to WV. That extension of RT 50
being built in Parkersburg comes to mind.
Dave Hall
Dave Hall writes:
>case in point is your Senator, Bob
>Byrd, and all the road money he brings to WV. That extension of RT 50
>being built in Parkersburg comes to mind.
Yeah. Now I'll have a nightmare tonight. That thing will be a lot better, and
safer, when it is completed. I hope it will, anyway, though I expect to be long
gone from the area by then.
Where does the money for school lunch funding come from? Why are so many school
districts so frightened of dropping student enrolments? Is all that a state
funding set-up? Seems to me I've read that much of it is federally funded.
Of course, the feds love to nail state and local agencies with grants. Expand
like crazy with whopping 2 year grants. At the end of 2 years you've got the
choice of letting the new stuff and staff go or paying for it yourself. Bedford
County, VA, has bought into this heavily with their sheriff's dept. Ex-FBI
agent elected shurf. Ever since, the dept. has been expanding on mostly federal
grant bucks. Some are due to start running out shortly, and one of the lowest
property tax rates in the state is due to go through the roof. Just about the
time I get back there, too.
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
>Where does the money for school lunch funding come from? Why are so many
>school
>districts so frightened of dropping student enrolments? Is all that a state
>funding set-up? Seems to me I've read that much of it is federally funded.
School Lunch and Breakfast programs are funded by a combination of federal,
state, and local tax dollars as well as the sale price of lunches. In our
district approximately 15% of the food service program is from federal funding,
with a substantial portion of that coming from food donations (this is actually
farm welfare where the feds set a minimum price for certain commodities and if
farmers can't sell what they grow for that price they sell it to the feds. the
feds then use it to donate to schools, for armed services, prisons , etc.).
Obviously, federal funds are focused on poorer school districts and the poorest
inner city schools and poor rural schools will get a higher percentage of both
education dollars as well as school lunch dollars (free and reduced lunch
subsidies for poor families). Still, nationally I believe that federal funding
amounts to considerably less than 5% of total K-12 education spending. Mostly
for remedial programs such as Title I reading and math, IDEA special education,
and some teacher continuing education programs (as well as the lunch/breakfast
programs). The vast majority of school funding in many states is state funding.
West Virginia funds a significant majority of school spending, with local taxes
- i.e. excess levies and bond levies- funding a small percentage. Other states
such as Pennsylvania focus a large percentage of school costs on local
taxpayers. PA state funding is about 35% on average. In my district it is about
18%. Just over 81% of our funding is from local (i.e. municipal or school
district specific) taxes - i.e. property taxes, local income taxes, local gross
receipts business taxes, amusement taxes, etc. and is heavily weighted toward
property taxes. Our local school property tax is 16.5 Mills or 1.65% of
assessed market value. This is on top of local municipal property taxes and
county property taxes. My total annual property tax is 28 mills or 2.8% of my
home's market value. Every state has its own formulas for distributing funding.
In many states out west it is very much based on number of students enrolled
AND attendance. They tend to spend a lot of money on tracking and enforcement
of attendance. In WV I think it is mostly enrollments, number and configuration
of buildings, geographic structure (for busing and for distribution of
schools). Even the structure of Districts vary widely from state to state. In
WV school districts are county-wide. so there are 55 school districts. In PA
the districts are much smaller and more numerous. In Allegheny County alone
there are 43 school districts - including the rather large city of Pittsburgh
District. The state has 501 districts. In Hawaii there is only 1 district - the
entire state.
So, in a very long winded way I have bored the socks off anyone still reading
concerning school funding. For the libertarians amongst us (as well as the
states rights folks) schools are still very much a state function as they
should be under the US constitution. The feds are constantly encroaching
however. Our nice conservative republican Geo. Bush recently passed the "No
Child Left Behind Act" which, whether you like its purpose and intent or not,
is clearly the largest transfer of eduction control to the federal government
in history (without matching funding, by the way). Some may say it is a victory
for children, but it is clearly a defeat for constitutional law.
Dave Hall
>Of course, the feds love to nail state and local agencies with grants. Expand
>like crazy with whopping 2 year grants. At the end of 2 years you've got the
>choice of letting the new stuff and staff go or paying for it yourself.
>Bedford
>County, VA, has bought into this heavily with their sheriff's dept. Ex-FBI
>agent elected shurf. Ever since, the dept. has been expanding on mostly
>federal
>grant bucks. Some are due to start running out shortly, and one of the lowest
>property tax rates in the state is due to go through the roof. Just about the
>time I get back there, too.
>
>Charlie Self
On Mon, 15 Dec 2003 18:35:44 +0000, Charlie Self wrote:
> "Supposed to be" is right up there with "justice" as a concept, I think. We
> don't see many things done as they're supposed to be done, nor is justice done
> with any great regularity.
>
> It would be interesting to see just how schools would fare today if all Federal
> monies were cut off. Too, how many roads would we have without Federal support?
> Start by doing a wipe on the entire Eisenhower concept, the Interstates.
All you gotta do is look at the trucking traffic on the interstates (at
least in the west) to realize they are a valid commerce item, unlike
Social Security and Medicare which for some strange reason have been
justified under the commerce clause. OTOH, I expect local taxes to fully
fund my side street after I have had a chance to vote on the bond issue.
-Doug
[email protected] (Charlie Self) wrote:
>"Supposed to be" is right up there with "justice" as a concept, I think. We
>don't see many things done as they're supposed to be done, nor is justice done
>with any great regularity.
>
>It would be interesting to see just how schools would fare today if all Federal
>monies were cut off. Too, how many roads would we have without Federal support?
>Start by doing a wipe on the entire Eisenhower concept, the Interstates.
>
>
>Charlie Self
Well if Michigan quit sending the federal portion of gasoline taxes
and used it to pave Michigan roads, we in Michigan would have better
roads. Yes, we are a DONOR State.
Federal Support = FEDERAL DEMANDS
Wes
--
Reply to:
Whiskey Echo Sierra Sierra AT Gee Tee EYE EYE dot COM
Lycos address is a spam trap.
[email protected] (Doug Miller) wrote in message news:<EPmDb.16390$P%[email protected]>...
> In article <[email protected]>, "Jay" <[email protected]> wrote:
> >It seems many people know all about the tax rules, but what bothers me is
> >Phil's comments on taxes going away. If we don't pay taxes, who paves and
> >fixes roads, who pays for the fire engines and crews that come and attempt
> >to save your house and personal belongings, who pays ... [snip]
>
> I didn't read that as advocating the abolition of *all* taxes, just *certain*
> ones.
>
> He's right IMO about most of them. I'd like to see all taxes abolished except
> sales tax. Main reason? It's the _only_ way of taxing illegally-earned income.
> Sure, there might be one or two drug dealers somewhere who actually report
> their income on a 1040, but depend on it, they're in a tiny minority. So how
> do you tax these guys? Get 'em when they spend it.
Doug, you hit the tax nail squarely on the tax head. Sales tax. No
estate taxes raping your loved ones when you try to pass on all you've
worked for your whole life (*that's* a story I could tell), no
Internal Revenue Freaking Service tracking down all us
do-a-side-job-for-cash-occasionally guys, no complex tax issues and no
tax lawyers. A straight percentage of sales price on everything you
buy.
How many millions of dollars a year would federal and state
governments save in payroll, facilities, etc. by the abolition of the
ENTIRE Internal Revenue Service?
I agree with you, Jay. We need police, fire, water and the like. We
also need, however, to simplify our current system.
Also, thanks to everyone who replied. I'm clear as mud on the issue
now <g>.
-Phil Crow
Phil Crow writes:
>Doug, you hit the tax nail squarely on the tax head. Sales tax. No
>estate taxes raping your loved ones when you try to pass on all you've
>worked for your whole life (*that's* a story I could tell),
I'm always interested in such tales. But I know in the past the Feds didn't
even start taxing estates until the 600K mark had slipped by. I would guess
it's a few bucks higher now. And not all that much was taken. There are special
provisions for family farms, too, where land and property values tend to be
much greater.
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
>I'm always interested in such tales. But I know in the past the Feds didn't
>even start taxing estates until the 600K mark had slipped by. I would guess
>it's a few bucks higher now. And not all that much was taken. There are
>special
>provisions for family farms, too, where land and property values tend to be
>much greater.
>
>Charlie Self
I believe the minimum is now up to $650,000, but I also believe that the tax
rate starts at 35% and goes to 55%. So I don't think it can be stated that "
not all that much was taken". While Bushes tax cuts will increase the limits
over the next 9 years until the tax is eliminated, in the 10th year it all
comes back and the minimum goes back to, I believe, the $600,000 amount.
Dave Hall
Dave Hall notes:
>
>I believe the minimum is now up to $650,000, but I also believe that the tax
>rate starts at 35% and goes to 55%. So I don't think it can be stated that "
>not all that much was taken". While Bushes tax cuts will increase the limits
>over the next 9 years until the tax is eliminated, in the 10th year it all
>comes back and the minimum goes back to, I believe, the $600,000 amount.
>
My knowledge of the concept goes back to the early '70s, so a changing
eprcentage, or amount, is no surprise. I love that 10 years to eliminate, 11
years to return concept. Brilliant politically, because by the time the
taxpayer screwing comes back, the president involved has retired, yet the drops
are annual and obvious and make political hay like crazy.
That rate: wonder how many deductions and exceptions there are?
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
What would happen if families started to "incorporate?"
What is to stop them from doing so now?
> buying gold or other "hard" investments that the
> heirs may not declare in the estate (that's illegal), etc.
--
Think thrice, measure twice and cut once.
There is only one period and no underscores in the real email address.
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What if the various members do not own stock in the corporation,
but simply provide stewardship of the assets? Some members
might have more "say" in the matters, as set out in the
corporations by-laws. The entity is lead by a board of directors
that just happen to require blood or marriage lines.
In the event of death of one of the board of directors, the
ownership of the pool of resources is not affected -- the corporation
still owns itself one hundred percent.
As time goes by, the membership of the board is filled with family
members once they reach the age of majority in their land. In the
case of a major disaster causing large scale deaths in the land,
and the sole remaining board of director is underage, then that
person would have a trustee appointed to oversee the corporations
assets until the "sole remaining board of director" (known today
as "the inheritor") was of legal age.
The by-laws would have to include verbose legalese verbage such
that no one can "cash out," which implies ownership of stock.
They could certainly draw an income for "services rendered," and
taxed appropriately as personal income.
The net effect is to keep the bulk of the family assets under family
control, with drawn off income from the interest or profit from the
various corporate activties the corporation finds itself involved with.
> I believe that many family farms are corporations. Still the farmer
> owns the stock. When he/she dies and leaves the stock to the kids,
> estate taxes apply. If you incorporate with the corporation owning the
> house and car, etc. and you owning the stock, when you die the stock
> must be valued and included in your estate. Believe me, serious and
> well paid people play the "what-if" game all day long trying to
> develop and exploit loopholes in the tax structures. If that was a
> good one, it would heavily utilized.
--
Think thrice, measure twice and cut once.
There is only one period and no underscores in the real email address.
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Thank you for the detailed follow up.
--
Think thrice, measure twice and cut once.
There is only one period and no underscores in the real email address.
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[email protected] (Charlie Self) wrote in message news:<[email protected]>...
> Dave Hall notes:
>
> >
> >I believe the minimum is now up to $650,000, but I also believe that the tax
> >rate starts at 35% and goes to 55%. So I don't think it can be stated that "
> >not all that much was taken". While Bushes tax cuts will increase the limits
> >over the next 9 years until the tax is eliminated, in the 10th year it all
> >comes back and the minimum goes back to, I believe, the $600,000 amount.
> >
>
> My knowledge of the concept goes back to the early '70s, so a changing
> eprcentage, or amount, is no surprise. I love that 10 years to eliminate, 11
> years to return concept. Brilliant politically, because by the time the
> taxpayer screwing comes back, the president involved has retired, yet the drops
> are annual and obvious and make political hay like crazy.
>
> That rate: wonder how many deductions and exceptions there are?
>
> Charlie Self
That's what estate attorneys are for, Charlie;) Basically, the
deduction (actually a lifetime exclusion) is the $650,000. There is
also the $10,000 annual gift exclusion (gifts in excess of the $10,000
are taxed as estate taxes and eat into your $650,000 lifetime
exclusion above). The basic estate planning depends on a husband and
wife creatively using their $650,000 exclusions so that they get full
use of their combined $1.3 million. This of course is little
consolation to the unmarried person (another reason that gays want
recognition of their "marriages"). While $650,000 seems a lot, ask
someone in southern California (or NYC or DC, etc.)with a modest home,
a 401K plan and some IRA money. If you own the house and have enough
retirement account savings to have enough to make a decent retirement
living, your heirs will be paying substantial estate taxes. BTW, your
heirs will not only pay a substantial estate tax on the full amount in
the IRA's and 401K's, they will also pay income taxes as they take the
money out. If they have to cash out the retirement accounts in order
to pay the estate taxes, the combined estate and income taxes can be
up to 70.75% (55% + (35% x the remaining 45%). There goes quite a bit
of that money that dad scrimped and saved to put into retirement
accounts. Then you get into life insurance schemes to try to get
around estate taxes, buying gold or other "hard" investments that the
heirs may not declare in the estate (that's illegal), etc.
Dave Hall
Mo' Sawdust <[email protected]> wrote in message news:<[email protected]>...
> What would happen if families started to "incorporate?"
>
> What is to stop them from doing so now?
I believe that many family farms are corporations. Still the farmer
owns the stock. When he/she dies and leaves the stock to the kids,
estate taxes apply. If you incorporate with the corporation owning the
house and car, etc. and you owning the stock, when you die the stock
must be valued and included in your estate. Believe me, serious and
well paid people play the "what-if" game all day long trying to
develop and exploit loopholes in the tax structures. If that was a
good one, it would heavily utilized.
Dave Hall
>
> > buying gold or other "hard" investments that the
> > heirs may not declare in the estate (that's illegal), etc.
>
> --
> Think thrice, measure twice and cut once.
>
> There is only one period and no underscores in the real email address.
>
>
>
> -----= Posted via Newsfeeds.Com, Uncensored Usenet News =-----
> http://www.newsfeeds.com - The #1 Newsgroup Service in the World!
> -----== Over 100,000 Newsgroups - 19 Different Servers! =-----
Dave Hall responds:
>I believe that many family farms are corporations. Still the farmer
>owns the stock. When he/she dies and leaves the stock to the kids,
>estate taxes apply. If you incorporate with the corporation owning the
>house and car, etc. and you owning the stock, when you die the stock
>must be valued and included in your estate. Believe me, serious and
>well paid people play the "what-if" game all day long trying to
>develop and exploit loopholes in the tax structures. If that was a
>good one, it would heavily utilized.
>
IIRC, family farms get special exclusions. Somehow the figure 4 million sticks.
But since I don't and won't have such a farm, that is about all I retained.
Charlie Self
"Man is a reasoning rather than a reasonable animal."
Alexander Hamilton
http://hometown.aol.com/charliediy/myhomepage/business.html
Mo' Sawdust <[email protected]> wrote in message news:<[email protected]>...
> What if the various members do not own stock in the corporation,
> but simply provide stewardship of the assets? Some members
> might have more "say" in the matters, as set out in the
> corporations by-laws. The entity is lead by a board of directors
> that just happen to require blood or marriage lines.
>
> In the event of death of one of the board of directors, the
> ownership of the pool of resources is not affected -- the corporation
> still owns itself one hundred percent.
>
> As time goes by, the membership of the board is filled with family
> members once they reach the age of majority in their land. In the
> case of a major disaster causing large scale deaths in the land,
> and the sole remaining board of director is underage, then that
> person would have a trustee appointed to oversee the corporations
> assets until the "sole remaining board of director" (known today
> as "the inheritor") was of legal age.
>
> The by-laws would have to include verbose legalese verbage such
> that no one can "cash out," which implies ownership of stock.
> They could certainly draw an income for "services rendered," and
> taxed appropriately as personal income.
>
> The net effect is to keep the bulk of the family assets under family
> control, with drawn off income from the interest or profit from the
> various corporate activties the corporation finds itself involved with.
The most basic fact about Corporations ( or any other profitable
entity) is that someone MUST own them (via ownership of their stock
for corporations) and that ownership must pass to heirs (or be donated
to a charity) upon their death. You can't have an "ownerless" entity
with members providing "stewardship" and family succession......except
in the case of 501(C)(3) tax exempt entities normally called
charities. Needs to have a valid tax exempt purpose to get IRS
recognition, regularly expend large percentages of receipts on the
charitable purpose, etc. If you can fit that however, there is a bit
of a dodge possibility here. I know of a number of companies set up as
charities, getting tax deductible donations, whose real purpose is to
provide jobs (and eventually pensions) to the people who set them up
and to their progeny for as long as they can keep the operation
operating. They do, however, have a valid charitable purpose and a
substantial portion of the funds raised are expended on the charitable
purpose - the "mamagement" just gets pretty nice salaries and benefits
and all have the same last names and the Board of Directors also seem
quite familiar to each other ;)
Anyone can set up a charitable organization. It isn't really very hard
to do if you can come up with some charitable purpose (how about a
"Community Woodworking Center"). It is somewhat more difficult to get
enough money for your charitable purpose to give yourself a great
income while doing enough charity work to retain your tax exempt
status and convince fools to keep giving you money.
If you are donating money (or even buying from a charity) always check
the background of the charity. Get information on the percentage of
funds spent DIRECTLY on the charity. It also doesn't hurt to look at
the names of the management and Board members. Lastly, you can check
out their Form 990 tax returns somewhere on the IRS website - these
will list major management salaries, Board members and give some
accounting for expenditures. Just because they have a 501(C)(3)
certification from the IRS and are tax deductible doesn't mean that
they are a reasonably charitable charity ;)
Dave Hall
On 17 Dec 2003 13:31:04 -0600, Mo' Sawdust <[email protected]> wrote:
> What would happen if families started to "incorporate?"
>
> What is to stop them from doing so now?
>
>
They do. Mostly farms. A farmer spends his entire career "Buying
retail and selling wholesale" as they say.
Then he passes and his family "inherits" $1M worth of land and machinery
and animals. The farm is sold to settle the estate taxes to an
agribusiness concern or to a developer.
Then the politicians who write estate tax laws bemoan the loss of the
family farm.
The same thing happens to site contractors, who might be a sole
proprietership owning a dump truck, a roller loader, and a bulldozer.
I know several farming families who have incorporated in order to avoid
just this sort of situation.
On Sun, 14 Dec 2003 14:47:39 +0000, Doug Miller wrote:
> In article <[email protected]>, [email protected] (Phil Crow) wrote:
>>At my job, we're behind schedule right now and are working 6 9's to
>>get the building under roof by New Year's Day. BTW, steel stud
>>framing outside in the weather lately has been a real treat. Anyway,
>>on to my question:
>>
>>Does the rate at which one is taxed vary with time and a half or
>>double time, or does it change with gross pay or does it not change at
>>all?
>
> Changes with gross pay. The more you make, the higher the rate at which you
> are taxed. Overtime has nothing to do with it: suppose your base rate is
> $20/hour. If you work 60 hours, 40 at straight time and 20 at time and a half,
> you make (40 hr x $20) + (20 hr x $30) = $1400. You get taxed the same as if
> you had worked 40 hours at $35/hour.
...and it's called "progressive income tax rates". If your gross pay in
any pay period is extended to a yearly income, and that income bumps you
into a higher marginal tax bracket than the one based on your normal
number of hours, the federal tax is gonna be at a higher rate. But don't
worry, that makes you rich and you don't need that extra money.
-Doug
In article <[email protected]>, [email protected] (Phil Crow) wrote:
>At my job, we're behind schedule right now and are working 6 9's to
>get the building under roof by New Year's Day. BTW, steel stud
>framing outside in the weather lately has been a real treat. Anyway,
>on to my question:
>
>Does the rate at which one is taxed vary with time and a half or
>double time, or does it change with gross pay or does it not change at
>all?
Changes with gross pay. The more you make, the higher the rate at which you
are taxed. Overtime has nothing to do with it: suppose your base rate is
$20/hour. If you work 60 hours, 40 at straight time and 20 at time and a half,
you make (40 hr x $20) + (20 hr x $30) = $1400. You get taxed the same as if
you had worked 40 hours at $35/hour.
--
Doug Miller (alphageek at milmac dot com)
How come we choose from just two people to run for president and 50 for Miss America?
On 14 Dec 2003 06:32:25 -0800, [email protected] (Phil Crow)
wrote:
>At my job, we're behind schedule right now and are working 6 9's to
>get the building under roof by New Year's Day. BTW, steel stud
>framing outside in the weather lately has been a real treat. Anyway,
>on to my question:
>
>Does the rate at which one is taxed vary with time and a half or
>double time, or does it change with gross pay or does it not change at
>all? I realize that the W4 exemptions establish the basic rate, but
>do you pay more (percentage-wise) with overtime? I heard a story from
>a welder who was making $12/hr said that for 6 months he was working
>mandatory 50-hour weeks, then went to mandatory 60-hour weeks; his
>paycheck difference was only about $30. Intuition tells me that this
>is crazy and I've never paid that much attention to the actual amount
>withheld when I've worked over 50 hours (other than to cuss the
>federal and state governments).
>
more money more tax...........
>Myself, I'd just as soon see income (and property and fuel etc.) tax
>go away entirely,
fat chance!!!
but since I'm stuck with it I would at least like to
>know how far they're gonna ram it in before they break it off.
>
to the hilt and the break will be slow and sloppy
>If anybody has some insight, I'd appreciate it.
>
They are the IRS. bend over . they will drive!
>-Phil Crow
when it comes to taxes....... expect the worse and you won't be
dissapointed. :-]\ skeez
"Phil Crow" <[email protected]> wrote in message
news:[email protected]...
> >
> Does the rate at which one is taxed vary with time and a half or
> double time, or does it change with gross pay or does it not change at
> all? I realize that the W4 exemptions establish the basic rate, but
> do you pay more (percentage-wise) with overtime? I heard a story from
> a welder who was making $12/hr said that for 6 months he was working
> mandatory 50-hour weeks, then went to mandatory 60-hour weeks; his
> paycheck difference was only about $30.
He is full of it! You will get taxed at a higher rate with higher income.
Overtime or regular time has nothing to do with it. Uncle Sam just looks at
the dollars you make in a week, or year, more dollars, higher tax rate.
Now the thing that averages it all out, when you do your taxes at the end of
the year the rate is based on your total pay for the year, so it pretty much
averages out the weeks you work massive over time.
Think of it this way, if you normally make $1,000 a week, you get taxed at a
$52,000 per year rate. If you work 4 weeks at $2,000 a week, for those 4
weeks you get taxed at a $104,000 per year rate, but when you do your year
end taxes you will get taxed at $56,000 per year rate. So you will acually
get tax money back for the weeks of OT.
Greg
It seems many people know all about the tax rules, but what bothers me is
Phil's comments on taxes going away. If we don't pay taxes, who paves and
fixes roads, who pays for the fire engines and crews that come and attempt
to save your house and personal belongings, who pays for the cops that
protect you as best they can, who brings water to your house, takes used
water and waste away from your house, etc. This would be a sorry country if
we didn't have taxes. I agree that taxes are wasted much of the time, but if
we didn't have them, we wouldn't have much. My 2 cents.
"Phil Crow" <[email protected]> wrote in message
news:[email protected]...
> At my job, we're behind schedule right now and are working 6 9's to
> get the building under roof by New Year's Day. BTW, steel stud
> framing outside in the weather lately has been a real treat. Anyway,
> on to my question:
>
> Does the rate at which one is taxed vary with time and a half or
> double time, or does it change with gross pay or does it not change at
> all? I realize that the W4 exemptions establish the basic rate, but
> do you pay more (percentage-wise) with overtime? I heard a story from
> a welder who was making $12/hr said that for 6 months he was working
> mandatory 50-hour weeks, then went to mandatory 60-hour weeks; his
> paycheck difference was only about $30. Intuition tells me that this
> is crazy and I've never paid that much attention to the actual amount
> withheld when I've worked over 50 hours (other than to cuss the
> federal and state governments).
>
> Myself, I'd just as soon see income (and property and fuel etc.) tax
> go away entirely, but since I'm stuck with it I would at least like to
> know how far they're gonna ram it in before they break it off.
>
> If anybody has some insight, I'd appreciate it.
>
> -Phil Crow