souldoubt
Senior Member
Joined: Jan 4, 2011 11:57:14 GMT -5
Posts: 2,754
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Post by souldoubt on Sept 30, 2015 11:00:06 GMT -5
If I were self employed I'd be deducting half of it on my tax return just like an employer. Also if I were self employed I'd be charging a higher hourly rate to cover some of the costs of being self employed. souldoubt, have you ever been self employed? If you have not the is a very steep learning curve. No I haven't but I have friends who are and did tax returns for self employed individuals when I worked for a small tax business. I realize there's a lot more that goes into the thought process of being self employed whether you start a business or are getting 1099'd as it's an entirely different beast. Again though I don't consider what my employer pays for me in FICA to be something I pay. Our system isn't set up as such that there's an account designated for me since it's pay as you go. As someone in their 30's I'm not counting on anything from SS as a part of my retirement plan because I have no idea what form it will be around in when I retire.
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Bonny
Junior Associate
Joined: Nov 17, 2013 10:54:37 GMT -5
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Location: No Place Like Home!
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Post by Bonny on Sept 30, 2015 12:15:53 GMT -5
souldoubt, have you ever been self employed? If you have not the is a very steep learning curve. No I haven't but I have friends who are and did tax returns for self employed individuals when I worked for a small tax business. I realize there's a lot more that goes into the thought process of being self employed whether you start a business or are getting 1099'd as it's an entirely different beast. Again though I don't consider what my employer pays for me in FICA to be something I pay. Our system isn't set up as such that there's an account designated for me since it's pay as you go. As someone in their 30's I'm not counting on anything from SS as a part of my retirement plan because I have no idea what form it will be around in when I retire. I've posted before about how in 2012 DH and I paid (or paid on behalf of us e.g. employer) that we paid $90k in Fed taxes.
Sure would like to see a return on that money when we need it.
$90,000.00 lump sum @ 11%/ann. for 15 years: $430,613.05
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resolution
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Joined: Dec 20, 2010 13:09:56 GMT -5
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Post by resolution on Sept 30, 2015 14:43:32 GMT -5
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teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
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Post by teen persuasion on Sept 30, 2015 17:45:24 GMT -5
People pay all kinds of taxes. They pay some taxes indirectly. Anyone making $25,000 a year is going to be paying taxes. People who do not pay federal income tax still pay tax. I have never understood why so many posters think that the income tax is the only tax that matters. It's not a questions of what matters and what does not. It's a question of what matters most. And when it comes to taxes, for the folks who post here, what matters most is federal income taxes. Not sales taxes. Not property taxes. Not state income taxes. Not even FICA. Federal income taxes matter the most for two reasons. First, it is most people's largest tax burden. For us, about $25K a year. FICA runs about $10K. Property taxes, a little less than $5K. And sales taxes about $4,500. No state income tax. As you can see, federal income taxes is more than 50% of our total tax burden. For many people, the federal portion of their tax burden is much higher than it is for us. The second reason that federal taxes matter so much is that it is the tax where most people feel that they get the poorest return for their contribution, where people feel that significant portions of the tax revenue is not spent appropriately. And when they watch that bunch of dinglefritzes in Washington, people dont get a warm fuzzy feeling about the stewardship that Washington is providing over the taxpayer's contributions. That is not uniform, even for the subset that post here. My largest tax burden is property taxes, followed by FICA, followed by state income tax, with federal taxes dead last (I have no idea where sales taxes rank - death by a million little cuts). Federal, and to some degree state, income taxes are the only ones with multiple moving parts that you can influence to any noticeable degree. That is why I pay more attention to fed & by extension state income taxes. Oh, and because they (or portions of the intermediate calculations) are used for other things, like FAFSA calculations of financial aid.
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tskeeter
Junior Associate
Joined: Mar 20, 2011 19:37:45 GMT -5
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Post by tskeeter on Oct 1, 2015 10:40:43 GMT -5
It's not a questions of what matters and what does not. It's a question of what matters most. And when it comes to taxes, for the folks who post here, what matters most is federal income taxes. Not sales taxes. Not property taxes. Not state income taxes. Not even FICA. Federal income taxes matter the most for two reasons. First, it is most people's largest tax burden. For us, about $25K a year. FICA runs about $10K. Property taxes, a little less than $5K. And sales taxes about $4,500. No state income tax. As you can see, federal income taxes is more than 50% of our total tax burden. For many people, the federal portion of their tax burden is much higher than it is for us. The second reason that federal taxes matter so much is that it is the tax where most people feel that they get the poorest return for their contribution, where people feel that significant portions of the tax revenue is not spent appropriately. And when they watch that bunch of dinglefritzes in Washington, people dont get a warm fuzzy feeling about the stewardship that Washington is providing over the taxpayer's contributions. That is not uniform, even for the subset that post here. My largest tax burden is property taxes, followed by FICA, followed by state income tax, with federal taxes dead last (I have no idea where sales taxes rank - death by a million little cuts). Federal, and to some degree state, income taxes are the only ones with multiple moving parts that you can influence to any noticeable degree. That is why I pay more attention to fed & by extension state income taxes. Oh, and because they (or portions of the intermediate calculations) are used for other things, like FAFSA calculations of financial aid. Thanks for confirming my contention that, even to someone who pays very little in federal income taxes, federal income taxes may matter more than other types of taxes. Your suggestion that the ability to manage one's federal income tax liability makes it a tax that matters is a consideration that I hadn't thought of.
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