Here is a quirk in the rules about benefitting from LTCG reduced tax rates. Did a preliminary preparation of 2001 taxes. With 7K LTCG included with pension and other income my social security income is taxable (at about 65% of the SS amount). If I add another 4K in LTCG 85% of SS is taxed. The total tax increase comes to about 25% of the 4K LTCG (if added this year). Also this is my year for medical deductions so the increase of 4K reduces that deduction (by about $75). If I wait until next year to take LTCG the differential in taxes will be 10 or 15% of LTCG (no itemization and 85% of SS will be taxable because of increase in other income). So much for LTCG tax benefit for the little guy on limited pensions and SS income.
buznitz writes:So much for LTCG tax benefit for the little guy on limited pensions and SS income.Isn't this really special. I'm in the same boat. Though I hate to take a loss for tax purposes (after all, that dog just might come back some day!), this could be the time(?)Flat tax, anyone??Regards,jtr
<Flat tax, anyone??>National sales tax, anyone?? No flat tax, round tax, square tax or income tax!!Sam
<Flat tax, anyone??>National sales tax, anyone?? No flat tax, round tax, square tax or income tax!!Sam I disagree - for those of us saving money in taxable accounts, we've already paid taxes on the money once. If we had a national sales tax, we'd wind up being taxed on the same money again when we purchase things after retirement. A flat income tax would be preferable to a national sales tax for us.
<A flat income tax would be preferable to a national sales tax>Tell me, how do you apply a flat income tax to a self-employed, small business owner. Would he have no deductions for business expenses?Probably wind up being as complicated as the morass we now have, if that's possible.Sam
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