Hoping someone here knows this.When tehy talk about 'raising tax rates on households earning 250k'....Are they talkign 250k GROSS income?Or 250k ADJUSTED gross income after deductions?Personally it doesn't matter to me as I'm now a no-income non-taxpaying Obama voter but just for curiosity sake I ask.Thanks, jediG
"Are they talkign 250k GROSS income?Or 250k ADJUSTED gross income after deductions?"Gotta be gross income....otherwise, how could 'limiting deductions ' work if you had already deducted them? The new Obama tax form will be1) How much did you make? _______________2) Deduct 20% of line 1 ---------3) New Taxes due ---------------4) AMount withheld by legal employer -------------- ( on W-2 form) 5) Amount that should have been withheld ------------- (90% of line 1) 6) Subtract 4 and 5 from 3 --------If line 6 is greater than zero, your taxes due are line 6If line 6 is zero or less, you still owe $118, 239If you would like to donate $1000 to the Obama Fund, please indicate soYes _____-No _______ (you will be contacted shortly about a mandatory re-education camp) Please mail your check to IRS - Obama TAx Collection ServicesWashington DC. PS. THere are no rebates for tax year 2012. or any year. Once we get your money, it is OURS to spend. If you make an error in our favor, too bad. If you make an error in your favor, immediately send in 3 times that amount. t
They are talking about Adjusted Gross Income under $250K. Itemized deductions are utilized to come up with AGI. Itemized deductions come after you get your AGI determined. The AGI determines your maginal tax rate, not your effective tax rate.
By the by, they could change how AGI is caculated so as to eliminate the deductions off of gross income to come up with AGI, such as IRA/401K and medical. The difference, I think, has to do with "above the line" and "below the line" deductions.
Sooner or later deductions for 401K/IRAs are going away or will be severely capped.That's something like 800 billion a year in 'lost tax revenues'...... (really just deferred, but to a politician, it is what can I spend this year...not 20 years in the future when folks retire and take their money out)Besides, the gov't has plans for your money in a government retirement 'supplemental' plan to SS......where it will be carefully placed in a lockbox to be available for you when you retire.t.
where it will be carefully placed in a lockbox to be available for you when you retire.t. You forgot to append a <g> or :-) to the above sentence.Mike
They are talking about Adjusted Gross Income under $250K. Itemized deductions are utilized to come up with AGI. Itemized deductions come after you get your AGI determined. The AGI determines your maginal tax rate, not your effective tax rate.This is a bit confusing. The two bolded statements are contradictory. The second one is correct. AGI is your total income less a few adjustments (if you have them) and you'll find it at the bottom of page one of the 1040. Then on page two, itemized deductions are subtracted from AGI (if you don't itemize, the standard deduction is used instead). The personal exemptions are also subtracted, leaving you with taxable income. The question is, will the $250k cutoff apply to AGI or to taxable income? Up to now, it's taxable income that determines which tax bracket you fall into. I don't see how AGI could be the determining factor -- you can't calculate your tax before subtracting the deductions unless the tax code is massively altered to treat deductions like after-tax credits. And households with identical AGIs can have wildly varying amounts of taxable income due to various itemized deductions and the number of personal deductions.--fleg
401K, IRA deductions SHOULD BE CAPPED INDEED.One can only hope!The best one will be when health insurance benefits get taxed as income.I wonder who gets better health benefits? The yuppy working for Apple in Caliphornia, or the fellow working at WalMart in Arkansas?PAY THE PRICE LIBERALS.OBAMA 2012JediG
401K, IRA deductions SHOULD BE CAPPED INDEED.They are.That was easy.
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