Anonymous
Post 04/08/2014 16:33     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
"The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly)."

What a frickin' joke, adjusted for inflation starting last year? How about you adjust for inflation starting the year it was enacted.
Anonymous
Post 04/08/2014 16:26     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
We are at 37%, which is higher than it's ever been. Lots of AMT, the .9% medicare kicker, some self employment taxes, etc.
Anonymous
Post 04/08/2014 16:26     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:We are in exactly the same boat paying a out 33% on our $300k income.


Are you talking about your tax bracket or effective tax rate. Because even with no deductions at all, effective tax rate for 300K income is 25% and not 33%


HUH
http://www.bankrate.com/finance/taxes/tax-brackets.aspx


Effective tax rate is your total tax paid divided by your total income. The 33% tax bracket is only on income above 183K and effective tax rate would be much lower
Anonymous
Post 04/08/2014 16:21     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:We're at 35% of our $450k income.

Can anyone help?


I'd rather be at 35% with an HHI of $450 than $100k with a rate of 10%. I'd say you don't need any help.
Anonymous
Post 04/08/2014 16:21     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:I don't get it. I am reading and getting examples from dcum that at 330 HHI Gross income the average effective tax rate should be 22% but we are consistently at 29%.

We have about 55k in deductions primarily from Mortgage interest and home offices and local taxes.

What do people do to get more deductions? We have a really low 3.3% interest rate on our mortgage so maybe that's the issue?

What is everybody doing to get these massive deductions.




Are you paying the AMT? Without that, the total tax due after 55K in deductions would be about 68,000, which is a 21% effective tax rate for 330K income
Anonymous
Post 04/08/2014 16:21     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
In this thread:

People who confuse marginal tax rate with effective tax rate
Anonymous
Post 04/08/2014 16:19     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:
Anonymous wrote:We are in exactly the same boat paying a out 33% on our $300k income.


Are you talking about your tax bracket or effective tax rate. Because even with no deductions at all, effective tax rate for 300K income is 25% and not 33%


HUH
http://www.bankrate.com/finance/taxes/tax-brackets.aspx
Anonymous
Post 04/08/2014 16:18     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:We are in exactly the same boat paying a out 33% on our $300k income.


Are you talking about your tax bracket or effective tax rate. Because even with no deductions at all, effective tax rate for 300K income is 25% and not 33%
Anonymous
Post 04/08/2014 14:52     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:300 to 500 is the must difficult income level. No benefits of the rich or the middle class. It's sometimes easier to just give up and go lower.

What benefits are you talking about?


Our deductions are phased out.

That's a benefit?


It's a benefit the middle class has - taking the full value of their deductions - that the 300-500 K crowd doesn't get.
Anonymous
Post 04/08/2014 14:42     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:300 to 500 is the must difficult income level. No benefits of the rich or the middle class. It's sometimes easier to just give up and go lower.

What benefits are you talking about?


Our deductions are phased out.

That's a benefit?
Anonymous
Post 04/08/2014 14:42     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
We paid 15.1% at $285K but gave about $25K away in cash (my husband is really into charitable giving) plus about $5k in things plus have a $450K mortgage at 3.5%.
Anonymous
Post 04/08/2014 14:25     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:Ok great I feel better now, I thought our accountant sucked or I am missing something. Maybe a lot of people lie on DCUM.


People saying they pay low rates on high incomes may be folding investment income which is taxed at a completely different rate in with their earned income when they state their household income.
Anonymous
Post 04/08/2014 14:15     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:That graphic doesn't make any sense to me. If you earn less than $30k your taxable rate is negative? No-one writes you a check if your income is less than $30k, how can it possibly be negative.


Yes they do. It's called the Earned Income Credit.
Anonymous
Post 04/08/2014 14:13     Subject: Re:2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:We paid an effective rate of 31.2% - you're doing nothing wrong. We got robbed because we have no mortgage deduction.


If you don't mind sharing what deductions did you use, most of the deductions we have are mortgage interest and real estate taxes. Ironically when we got a lower interest rate we lost quite a bit of the interest deduction.
Anonymous
Post 04/08/2014 14:12     Subject: 2013 Itemized deductions and HHI, why is my effective so high, what are we doing wrong?
Anonymous wrote:That graphic doesn't make any sense to me. If you earn less than $30k your taxable rate is negative? No-one writes you a check if your income is less than $30k, how can it possibly be negative.


Well our nanny gets back more than she puts in because she has two kids...