Anonymous wrote:
WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

250k+ HHI, and I am with you.

Anonymous wrote:$220k income
Effective tax rate per turbotax: 16.07%

$318K adjusted gross income
$63K in taxes owed
19.8% effective tax rate

Anonymous wrote:AGI - $352k
ETR - 21.15%

How is this possible?

AGI: 260K
Federal Tax: 66k
ETR: 28.5%

AGI: $88k
Federal Tax: $2,100
ETR: 2.4%

Besides mortgage interest, we own several rental properties. While cash flow positive, depreciation accounts for a significant loss.

AGI: 125K
Federal Tax: 7K
ETR: 5.6%

We have 5 exemptions and 3 dependents. But we also paid $11K in property taxes, $3K in charity, and $18K in mortgage interest.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.

the mortgage interest deduction helps us - on a AGI of 73K. I really don't think you would consider that an income in the higher range for this area..... we'll be okay with that deduction but it wouldn't be as easy as for some.

AGI of $73,000 isn't middle class. Not by ordinary standards in the country. The median income is in the low 50s. for a household.

If you made $73,000 in, say, Columbus and paid $175,000 for your house, borrowing $150,000 at 4%, you'd pay a little over $710 a month in interest charges. Over the course of the year, you'd pay $8,400 or so. That's $4,000 beneath the standard deduction $12,400. I suppose you could add whatever state income and property taxes to the mix, plus charitable deductions. Say you put together another $6,000 in deductions between those items. Now you have $14,400 to itemize. You're in the 15% bracket at that point, so the tax savings there for itemizing is $300. It's not nothing, but hardly catastrophic.

Now say you make $273,000 in DC. And you pay $975,000 for your house, borrowing $750,000 at 4%. Your monthly interest charges at first would be nearly $3,600, or $43,200 for the year. Throw on another $10,000 for property tax, another $10,000 for state income tax, and $5,000 for charitable donations (about 2% of income, which is fairly typical). Now you have itemized deductions of $68,200. Back out the value of the standard deduction and you have roughly $56,000 in additional deductions. You're in the the 33% tax bracket, so that's a tax savings of $18,400 or so.

That's the difference.

Remember: Only a third of Americans itemize their deductions. And only 2/3 of homeowners have any sort of mortgage at all. The rest own their home outright.

Please note that is why I said "for this area". I also said we would be fine without the deduction. I never said catastrophic.

AGI - $352k
ETR - 21.15%

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.

the mortgage interest deduction helps us - on a AGI of 73K. I really don't think you would consider that an income in the higher range for this area..... we'll be okay with that deduction but it wouldn't be as easy as for some.

AGI of $73,000 isn't middle class. Not by ordinary standards in the country. The median income is in the low 50s. for a household.

If you made $73,000 in, say, Columbus and paid $175,000 for your house, borrowing $150,000 at 4%, you'd pay a little over $710 a month in interest charges. Over the course of the year, you'd pay $8,400 or so. That's $4,000 beneath the standard deduction $12,400. I suppose you could add whatever state income and property taxes to the mix, plus charitable deductions. Say you put together another $6,000 in deductions between those items. Now you have $14,400 to itemize. You're in the 15% bracket at that point, so the tax savings there for itemizing is $300. It's not nothing, but hardly catastrophic.

Now say you make $273,000 in DC. And you pay $975,000 for your house, borrowing $750,000 at 4%. Your monthly interest charges at first would be nearly $3,600, or $43,200 for the year. Throw on another $10,000 for property tax, another $10,000 for state income tax, and $5,000 for charitable donations (about 2% of income, which is fairly typical). Now you have itemized deductions of $68,200. Back out the value of the standard deduction and you have roughly $56,000 in additional deductions. You're in the the 33% tax bracket, so that's a tax savings of $18,400 or so.

That's the difference.

Remember: Only a third of Americans itemize their deductions. And only 2/3 of homeowners have any sort of mortgage at all. The rest own their home outright.

I'm the $132k/9.49% poster. Mortgage interest, state and local property tax deductions, 2 kids, modest charitable donations -- these are key to reducing our rate. I'm all for reducing or taking away the mortgage deduction for mortgages above a certain amount and for second homes, boats, etc. Such a change would not affect us.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.

Doing away with the mortgage interest deduction helps the rich and kills the middle class. Can't believe you would think it would be a good idea.

No, it doesn't. You can make the case for converting the mortgage interest deduction to a credit, which would help people lower down the income ladder.

But with interest rates as low as they are and the standard deduction as high as it currently is, it really doesn't help anyone in the middle class who pays less than $200,000 for a home (which is the norm in most of the country).

All economists will tell you the benefits of the mortgage interest deduction disproportionately benefit those with higher incomes. Most middle-class taxpayers don't even itemize.

So, you're factually incorrect.

Anonymous wrote:340k 32%, I don't understand how people can get lower than 30% at that income or higher.

How are you calculating 30%? With a taxable income (not including any deductions at all) of 340,000, total federal income tax due would be ~88,000 or an effective tax rate of 26% for a married couple. Assuming deductions of 40K for mortgage interest, property tax, personal deductions, etc., effective tax rate goes down to 22%

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.

the mortgage interest deduction helps us - on a AGI of 73K. I really don't think you would consider that an income in the higher range for this area..... we'll be okay with that deduction but it wouldn't be as easy as for some.

I mean "without"

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.

the mortgage interest deduction helps us - on a AGI of 73K. I really don't think you would consider that an income in the higher range for this area..... we'll be okay with that deduction but it wouldn't be as easy as for some.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Per TurboTax:
AGI = $132k
ETR: 9.49%

Anonymous wrote:HHI: 151
ETR: 9.5

Anonymous wrote:HHI : 164
ETR : 10.3

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.

Try buying a place. It helps.

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking.

Seriously. It'd be nice if those with higher HHIs would think before they type.

They were being candid. It wxplained why they have low ETRs. Angry poster should quit McDonalds and get a real job.

No way a full-time worker at McDonald's is making $35k a year. At (generously) $9 an hour, they'd be making $18.7k a year BEFORE taxes if they work 40 hour workweeks and don't take ANY vacation time.

Manager maybe?