These small “surprise” taxes are so annoying

[Anonymous]

Anonymous wrote:

Anonymous wrote:Be grateful instead of selfish.

+1
Seriously. And get some perspective. Paying slightly more taxes because you make more money is not something to complain about.

This. Think of those earning minimum wage, living on the gig economy, and the homeless and/or mentally ill.

[Anonymous]

Anonymous wrote:If you are new to having them you haven’t truly experienced them yet. Try being taxed an extra 4.7% on the last $3M of income. It’s no longer $2k in extra tax, but $141K in extra taxes.

Sounds like a good problem to have.

[Anonymous]

Anonymous wrote:If you are new to having them you haven’t truly experienced them yet. Try being taxed an extra 4.7% on the last $3M of income. It’s no longer $2k in extra tax, but $141K in extra taxes.

Imagine how many people you'd have to scam so your employer thinks its worth it to pay you $3M!

[Anonymous]

Yes, it is annoying especially if you were socking more away and got surprised at the end. Sorry, Op.

[Anonymous]

Anonymous wrote:This is how Democrats turn into Republicans.

Republicans would be cleaning up every election if they were sane and rational.

[Anonymous]

Anonymous wrote:It’s a way of increasing taxes on the wealthy without changing the basic tax rates. Smoke and mirrors!

Actually, no. They increase taxes on the middle class, the thresholds are between 200-300k and NOT indexed to inflation. You think a family making 250k in a major city is rich? And in 10 years it’ll be even worse and affect an even greater percentage of the population.

[Anonymous]

Two things can be true at once:

1) these small surprise taxes are annoying
2) they are fair/reasonable for the 12 percent of households with incomes above $200K, which is more than 2.5x the median income, given that we have a graduated tax system

[Anonymous]

Anonymous wrote:

Anonymous wrote:3.8% NIIT was added to fund Obamacare.

Based on what? The CRS refers to it as "unearned income Medicare contribution."

https://crsreports.congress.gov/product/pdf/IF/IF11820

Part of the legislation package in 2010.

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.forbes.com/advisor/investing/net-investment-income-tax/

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s a way of increasing taxes on the wealthy without changing the basic tax rates. Smoke and mirrors!

Actually, no. They increase taxes on the middle class, the thresholds are between 200-300k and NOT indexed to inflation. You think a family making 250k in a major city is rich? And in 10 years it’ll be even worse and affect an even greater percentage of the population.

Not PP, but while true the tax only applies to the income earned beyond the $200/250k thresholds (and this is adjusted income, of course, so the actual earnings will be higher). So over 85% of the tax is being paid by households making more than $500k, almost a third by households making more than $10m. People in the $200-$300k range are paying very little from this.

https://crsreports.congress.gov/product/pdf/IF/IF11820

[Anonymous]

It’s annoying but we have a progressive tax system in this country so….just adjust your withholding up for 2024 if you struggle to save cash during the year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you are new to having them you haven’t truly experienced them yet. Try being taxed an extra 4.7% on the last $3M of income. It’s no longer $2k in extra tax, but $141K in extra taxes.

Sounds like a good problem to have.

This.

If you make this kind of money, um, why are you doing your own taxes?

Something sounds off here…

[Anonymous]

Anonymous wrote:Two things can be true at once:

1) these small surprise taxes are annoying
2) they are fair/reasonable for the 12 percent of households with incomes above $200K, which is more than 2.5x the median income, given that we have a graduated tax system

Or 2) graduated taxes are reasonable but this amount on top of the others (both nominal rates and phaseouts of deductions and credits) is too much.

Graduated tax system hits the upper middle class but disappears for the upper class, at which point you have to fall back to the defense of "the absolute tax is greater, even though the rates in practice are regressive".

If OP is paying $2K in these additional taxes, that's because OP makes over $200K in wages and $50K in investments, or over $400K in wages and $0 in investments, or some mix of that.

OP is also over the Social Security income cap, though (which is partially adjusted for inflation), so if you look at SS as a flat social tax rate and not as a personal investment program, these new taxes essentially just remove the SS income cap for "average" high earners who earn a mix of wages and investments.


You can argue all day about what's a fair level of taxation. You have much ore trouble defending all the nitpicky nickel and diming for a thousand taxes and credits and deductions and HSA/FSA/benefits management is a rat race and a dead weight loss for the people of this country that only benefit the tax preparation and financial services industries.

It's like card fees and rebates writ large.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s a way of increasing taxes on the wealthy without changing the basic tax rates. Smoke and mirrors!

Actually, no. They increase taxes on the middle class, the thresholds are between 200-300k and NOT indexed to inflation. You think a family making 250k in a major city is rich? And in 10 years it’ll be even worse and affect an even greater percentage of the population.

This concern has already been addressed by stopping wage growth for middle-high earners.

[Anonymous]

Anonymous wrote:I’m new to having a high enough income to owe them. 0.9% “additional Medicare tax”, 3.8% “net investment income tax” ON TOP of the main Medicare and capital gains taxes.

Come ON!!! There goes my expected $1500 refund, now I’ll owe $500. I over withheld $1k every month on my w4 last year thinking I’d finally get something back instead of owing thousands.

You got an interest free loan from the government / avoided giving the government an interest free loan. You should be delighted.

[Anonymous]

If OP is paying $12000/yr in these taxes, and single because married person likely wouldn't known their total taxes yet, OP is making $125K + $300K in investments, or $1M in income.

OP do you get RSU stock grants? Those are withheld at 22% which is usually too low for your regular bracket.

Also it seems ridiculous that you thought you could calculate your tax liability down to under $1000 error while also being ignorant of tax law.