:( Taxes :(

Ken Ibold

Ken Ibold

Final Approach
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Feb 21, 2005
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Ken Ibold
Did some bad planning last year. My tax guy called and, well, I have been absolutely nuked. Looks like the family eats like flight instructors for the next year.
 
Ken Ibold said:
Did some bad planning last year. My tax guy called and, well, I have been absolutely nuked. Looks like the family eats like flight instructors for the next year.
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That was me last year.

I finally finished my 2005 taxes last week and it look like I will get a little money (about 1%) back from what I had to pay last April. It almost covers what I will be paying this weekend for my 2006 taxes. Last year I took a voluntary 1/3 cut in pay and deferred the money to a later to avoid some taxes this year. It gets complicated when my pay is a combined salary, stock options, and bonus. What nailed me in 2005 was that I cashed in a lot of stock options that had withholdings much less than what bracket I was in.
 
I gotta pay 5 figures on top of what was already taken out by my employer. When my tax guy told me though, I told him SUPER since it was significantly less than I had thought it would be (when I eyeballed it - no formal calculations). He was a little surprised that I was delighted...
 
woodstock said:
I gotta pay 5 figures on top of what was already taken out by my employer. When my tax guy told me though, I told him SUPER since it was significantly less than I had thought it would be (when I eyeballed it - no formal calculations). He was a little surprised that I was delighted...
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I hear ya! But it does sound like we whine a bit when you consider that it could be worse. We could be having to use the EIC and budget carefully just to buy milk or go on vacation once every other year.
 
Nothing worse than being in that situation with the hippie coworker next to you saying you didn't pay enough. :mad:
 
"Tax planning"? Whassat?

I am Mr. Extension Guy (as always), pending completion of our corporate taxes, also extended.

This year is our first year to start paying the Texas Business Margin Tax. Goody. Was supposed to be in exchange for substantial property tax relief. Said "relief" is not yet seen on the horizon.

Grrr!
 
smigaldi said:
I hear ya! But it does sound like we whine a bit when you consider that it could be worse. We could be having to use the EIC and budget carefully just to buy milk or go on vacation once every other year.
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So true. But I cringe when I see we owed more in taxes last year than I made in salary working for EAA. (And Tom P wondered why I wouldn't move to OSH!!!)
 
Ken Ibold said:
Did some bad planning last year. My tax guy called and, well, I have been absolutely nuked. Looks like the family eats like flight instructors for the next year.
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I got killed with an unplanned capital gain due to a stock takeover issue. The stock (Burlington Resources) was a spinoff from something my wife received as a gift from her grandfather when she was in junior high so my basis is basically zip. Since this pushes me well into the AMT zone, the effect is that I effectively get taxed on this at 26% instead of 15% which really sucks considering that most of the "gain" is really inflation. At least the cash from the takeover was still sitting in the account and will cover the unwithheld taxes. One of those "easy come easy go" things I guess. On the bright side, my before tax income was higher in 2006 than it's ever been.
 
We received good news from our advisor. We put back several thousand dollars due to capital gains on a stock sell for a home remodeling project.
When we penciled the 1040 and accompanying forms, we owed about what we put back.
When the advisor sent us our forms yesterday we owe $56...gotta love the accountant! :D :yes:
 
yeah 2 mo severence and OUCH that hurt!

Ken can you pass the Ramen's?
 
If I hadn't gotten married last year, AMT would have drilled me hard to the wall. Missed it only by a few dollars this year, according to the accountant...

Sigh. Next year will suck.

Cheers,

-Andrew
 
I just received another raise...made me happy--right up until I realized how little money it is after the tax increase. ****.
 
jesse said:
I just received another raise...made me happy--right up until I realized how little money it is after the tax increase. ****.
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Yeah, you gotta hate that. "Woohoo a raise!" *looks at pay stub* "Odd... looks the same..."

More to retirement, more to taxes...
 
And to think there are still some here who fight against the FairTax?!?!?!

:rolleyes:
 
KennyFlys said:
And to think there are still some here who fight against the FairTax?!?!?!

:rolleyes:
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The "simplicity" of those proposals breaks down pretty fast.

You pay a fixed tax on salary, wages, profits and proceeds right? Simple.
Profits are sales-expenses. Tell me simply which expenses are allowed. Raw materials, sure. How about home office expenses? Personal use of a car?

Proceeds are sale price-cost. Are monthly broker account fees a cost? (They're not deductible, BTW).

The next thing you know there are shelves and libraries of regulations and whole professions that understand them. Just like we have now.
 
mikea said:
The "simplicity" of those proposals breaks down pretty fast.

You pay a fixed tax on salary, wages, profits and proceeds right? Simple.
Profits are sales-expenses. Tell me simply which expenses are allowed. Raw materials, sure. How about home office expenses? Personal use of a car?

Proceeds are sale price-cost. Are monthly broker account fees a cost? (They're not deductible, BTW).

The next thing you know there are shelves and libraries of regulations and whole professions that understand them. Just like we have now.
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By all indications, you don't have a clue how the FairTax was designed to work. I'd suggest a visit to the website or search my previous posts on the subject. I made two or three very detailed posts in the last couple weeks.
 
Oh, my personal tax planning was fine, but I let my attorney/accountant talk me into a deal structure that would enhance capital gains--of course they charged healthy fees. Nothing wrong; just structured in a manner that would preserve cap gains.

Unfortunately, we used our own money to invest instead of investor money and couldn't get capital gains because the entities are related. Lots of administration costs to run all these entities that don't have any reason to be there. One entity gets all the cash and I get the taxable income--called phantom income.

Now, these geniuses get paid to figure out how to get me out of this monster they created. They never considered that I might use my own money as the equity.

I'm with beth, more than five figures to Uncle with no income to pay it. What fun!!


Best,

Dave
 
From my dear old dad.....

"Son, there are two kinds of people you talk to when you complain about the taxes you pay. The people who don't care because they don't make as much as you do, and the people who don't care because they pay more than you do."

:D
 
gibbons said:
From my dear old dad.....

"Son, there are two kinds of people you talk to when you complain about the taxes you pay. The people who don't care because they don't make as much as you do, and the people who don't care because they pay more than you do."

:D
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I like that.
 
jesse said:
I just received another raise...made me happy--right up until I realized how little money it is after the tax increase. ****.
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Put some or all of the raise into a 401K. You won't take home any more, but you'll give the gvnmt less.
 
lancefisher said:
Put some or all of the raise into a 401K. You won't take home any more, but you'll give the gvnmt less.
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Start doin' it now, you'll never miss it and when you're my age you'll have a ton of money... the miracle of compounding.\

I wish 22 year-old Spike had listened when he got that advice!
 
SCCutler said:
Start doin' it now, you'll never miss it and when you're my age you'll have a ton of money... the miracle of compounding.\

I wish 22 year-old Spike had listened when he got that advice!
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I wish I had taken a measly grand of money in my early years and put it into that evil Walmart. If I recall, a thousand shares at the 1972 IPO for $1600~ would be worth roughly $7 million today. Who woulda thunk it? :dunno:
 
I have a 401K that I need to roll into an IRA this week....Fidelity is dragging their feet.

I hate money issues.

Oh and Taxes? Yeah, I'm still poor enough to get it all back because of School (better go back next semester or I'm screwed).
 
I got just about finished with my federal taxes last night and now I look like all of these:

:(
cry.gif
sad-smiley-047.gif
sad-smiley-011.gif
sad-smiley-054.gif
 
I have no interest to deduct.
I have no kids at home.
I have no deductions of any other nature.

I have an extra $100 taken out of each paycheck for taxes.
I have and extra $50 taken out of the SS check each month.
I have completed the short form because there is nothing to declare.



but


I still owe.
 
lancefisher said:
Put some or all of the raise into a 401K. You won't take home any more, but you'll give the gvnmt less.
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Wise advise. When I first started saving in my 401k I would take what ever half of my raise was and put that into my 401k. 100 week raise, $50 a week more into 401k. The beauty is that because of the tax benefit you still saw a net increase in take home pay and in a couple of years I was maxing out my 401k. Which now today is worth way more than the average in the US and is right on track for what I need for my retirement goal.
 
lancefisher said:
Put some or all of the raise into a 401K. You won't take home any more, but you'll give the gvnmt less.
Click to expand...

Hmm. I'll do just that. I need to wait a few paychecks right now though so that I can figure out how I'm going to have to change my W4. (Plus I need that extra money for Gastons)
 
smigaldi said:
Wise advise. When I first started saving in my 401k I would take what ever half of my raise was and put that into my 401k. 100 week raise, $50 a week more into 401k.
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Another way to do it is to start at some percentage, and then raise your contribution 1% every year until you max out. Hey, 1% ain't that much, you won't miss it now, but you'll really appreciate it come retirement time.
 
I maxed out my SIRA contribution for the first time last year, then throw in the employer match on top. A few more years like that should keep me in airplanes well into retirement - if it's still legal in 30 - 40 years. :mad:

James Dean
 
When I ran my own business I used to get cold calls from scammers and financial planners telling me that they could save me on income taxes. I used to say,'"How can I get more of that?"

"??? Taxes?"

"No. Income."
 
tonycondon said:
If you had 60 cents for every time you had a dollar, we'd call you Canada
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So pre-Bush era of you. The Canadian Peso is running at almost 90cents of a USD right now. We stopped going there for business as there was no longer an exchange advantage. Good for San Francisco and Portland but bad for Vancouver.
 
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