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(Yahoo)   Tax policies favor single people   (finance.yahoo.com) divider line 23
    More: Obvious, taxpayers, real estate taxes, standard deduction, itemized deductions, adjusted gross income, marriage penalty, multiple levels, Urban Institute  
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1389 clicks; posted to Business » on 18 Jan 2013 at 2:00 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-18 12:42:23 PM
Not exactly. When two people are married, their income is combined and they're taxed on a different tax scale. If one person is a high earner, and the other a stay-at-home parent, they actually get a "marriage bonus," i.e., their total income will be taxed at a lower rate. It's when two people both have high incomes, or relatively equal incomes, that there is a "marriage penalty."

On a very simplified level, if a person makes $200,000, and their spouse makes $50,000, they will be taxed at the same rate. If the spouse earns less than $50,000, they will get some level of lower taxes. If the spouse earns more than $50,000, they will get some level of higher taxes.
 
2013-01-18 12:51:26 PM
No, tax policies favor people who have children.

I have good friends who are married, do not own a home, have no children and make 6 figures each. They pay the highest tax rate they possibly can.
 
2013-01-18 01:03:47 PM

Supes: Not exactly. When two people are married, their income is combined and they're taxed on a different tax scale. If one person is a high earner, and the other a stay-at-home parent, they actually get a "marriage bonus,"


this and

what_now: No, tax policies favor people who have children.


also this

I've always said it would be great if I could gay marry my dog and get that stay-at-home-spouse discount, but maybe claiming him as a child tax credit would be better.
 
2013-01-18 01:13:53 PM

what_now: No, tax policies favor people who have children.

I have good friends who are married, do not own a home, have no children and make 6 figures each. They pay the highest tax rate they possibly can.


Head of Household.. Married or single you get that if your kid(s) live with you. In order to get to the 28% bracket single you have to get down to 183k in 2013 as a single person. Having a kid though means you can hit the 28% bracket at 203k. That's a big difference. If you make 230k for instance you only have to get rid of 27k in deductions which isn't that hard to do between donations and various personal business expenses such as 1/3rd of your house, a car if you have two, etc. Tack on another 20k to that though and now you need to get rid of 50k to make it happen. That's a lot harder unless you're some super-donater or a small business owner.

Plus each kid gets you $3500 in refunds. If you're making 250k or more then it pretty much doesn't matter because you're going to be in the 33% bracket until you're in the 400k range regardless. The lower income brackets are much more forgiving.
 
2013-01-18 01:31:04 PM

xynix: Head of Household.. Married or single you get that if your kid(s) live with you.


Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.

"But..my HR Block person told me.." Of course he did. He works in a store front in a mall and has less tax training than your average freshman in acccounting.

"But..but I've been doing this for years!" Ok. So you've gotten lucky.

I review people's taxes for financial aid. This is the number one mistake, and I have never had someone come up with an argument besides those two.

You're doing it wrong.
 
2013-01-18 01:53:48 PM
encrypted-tbn1.gstatic.com
 
2013-01-18 01:54:16 PM
Tax policy favors the rich.

That is all.
 
2013-01-18 02:19:27 PM

serial_crusher: Supes: Not exactly. When two people are married, their income is combined and they're taxed on a different tax scale. If one person is a high earner, and the other a stay-at-home parent, they actually get a "marriage bonus,"

this and

what_now: No, tax policies favor people who have children.

also this

I've always said it would be great if I could gay marry my dog and get that stay-at-home-spouse discount, but maybe claiming him as a child tax credit would be better.


My seventeen, blind, Vietnam-veteran dependents in the clergy agree that you have to take the deductions where you can get them.
 
2013-01-18 02:31:41 PM
Those middle class folks making 400k are gonna be PISSED.
 
2013-01-18 02:43:47 PM
The so-called marriage penalty actually makes a lot of sense. For a long time in this country only men worked high paying jobs, so doctors and lawyers would marry their high school sweethearts, and every family would have a solid breadwinner. Nowadays doctors and lawyers marry each other, which vastly contributes to wealth disparity, as the lower half of high-earning professional men have been displaced onto low earning jobs by the top women. So instead of every family having one $50k earner, half have two earners and end up in six figures, while the other half have two $12.50/hr earners and can barely get by. It makes sense to compensate for this by penalizing double income families to subsidize the lesser qualified men and the women who were left over to marry them.
 
2013-01-18 03:02:47 PM
Good thing I'm married.
 
2013-01-18 03:03:24 PM

tricycleracer: Good thing I'm married.


Oh wait, this is this thread.

Scratch that.  I'm not married.  For tax reasons.
 
2013-01-18 03:17:00 PM

what_now: xynix: Head of Household.. Married or single you get that if your kid(s) live with you.

Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.

"But..my HR Block person told me.." Of course he did. He works in a store front in a mall and has less tax training than your average freshman in acccounting.

"But..but I've been doing this for years!" Ok. So you've gotten lucky.

I review people's taxes for financial aid. This is the number one mistake, and I have never had someone come up with an argument besides those two.

You're doing it wrong.


I'm a single father so I'm doing it right ;) When I was married I never filed HoH. I have an accountant anyway I don't do my own taxes .. haven't in 10+ years. Way to many moving parts.

What I meant however is that you get the child tax credit if you're married or HoH.
 
2013-01-18 03:21:34 PM

what_now: xynix: Head of Household.. Married or single you get that if your kid(s) live with you.

Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.

"But..my HR Block person told me.." Of course he did. He works in a store front in a mall and has less tax training than your average freshman in acccounting.

"But..but I've been doing this for years!" Ok. So you've gotten lucky.

I review people's taxes for financial aid. This is the number one mistake, and I have never had someone come up with an argument besides those two.

You're doing it wrong.


If its the number one mistake that just tells me that the way its being presented is wrong.  The answer is to fix the wording and simplify the form (while we are at it - simplify our tax code).

/finished my taxes last night
//"single"
 
2013-01-18 03:24:59 PM

xynix: I'm a single father so I'm doing it right ;) When I was married I never filed HoH. I have an accountant anyway I don't do my own taxes .. haven't in 10+ years. Way to many moving parts.


Wait until the IRS notifies you of a discrepancy in your tax returns and discover your accountant fark'd up three years of tax returns in a row.

/took me 40 hours to fix and refile
//not to mention the extra tax i ended up owing
///went back to doing my own taxes four years ago - it really isn't that difficult
/then again I'm weird
 
2013-01-18 04:55:22 PM

Grand_Moff_Joseph: Tax policy favors the rich.

That is all.


America has a more progressive rate than any european nation. Stop lying.
 
2013-01-18 05:00:23 PM

gingerjet: what_now: xynix: Head of Household.. Married or single you get that if your kid(s) live with you.

Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.

"But..my HR Block person told me.." Of course he did. He works in a store front in a mall and has less tax training than your average freshman in acccounting.

"But..but I've been doing this for years!" Ok. So you've gotten lucky.

I review people's taxes for financial aid. This is the number one mistake, and I have never had someone come up with an argument besides those two.

You're doing it wrong.

If its the number one mistake that just tells me that the way its being presented is wrong.  The answer is to fix the wording and simplify the form (while we are at it - simplify our tax code).

/finished my taxes last night
//"single"


Oh dude. You're telling me. If I was in charge, we'd have a pretty simple tax form:

How much money did you take in last year? Wages, business income (way simplified business returns) capital gains, interest, gambling etc.

Ok, here's a scale. If you made this much, you pay x.

Unless you owned a business, you could do a 1040ez, and like I said- business returns would be far easier.

None of this "But I own a home! and I have kids! Wait.. my capital gains don't count" nonsense.
 
2013-01-18 05:04:52 PM

gingerjet: xynix: I'm a single father so I'm doing it right ;) When I was married I never filed HoH. I have an accountant anyway I don't do my own taxes .. haven't in 10+ years. Way to many moving parts.

Wait until the IRS notifies you of a discrepancy in your tax returns and discover your accountant fark'd up three years of tax returns in a row.

/took me 40 hours to fix and refile
//not to mention the extra tax i ended up owing
///went back to doing my own taxes four years ago - it really isn't that difficult
/then again I'm weird


What the hell are you talking about? Filing HoH as a single father who's child lives with them full time. How is that a discrepancy? From the IRS:

You may be able to file as head of household if you meet all the following requirements.

You are unmarried or "considered unmarried" on the last day of the year.

You paid more than half the cost of keeping up a home for the year.

A "qualifying person" lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the "qualifying person" is your dependent parent, he or she does not have to live with you.


Qualifying person:


Your home was the main home of your child, stepchild, or foster child for more than half the year.
 
2013-01-18 05:44:51 PM

xynix: gingerjet: xynix: I'm a single father so I'm doing it right ;) When I was married I never filed HoH. I have an accountant anyway I don't do my own taxes .. haven't in 10+ years. Way to many moving parts.

Wait until the IRS notifies you of a discrepancy in your tax returns and discover your accountant fark'd up three years of tax returns in a row.

/took me 40 hours to fix and refile
//not to mention the extra tax i ended up owing
///went back to doing my own taxes four years ago - it really isn't that difficult
/then again I'm weird

What the hell are you talking about? Filing HoH as a single father who's child lives with them full time. How is that a discrepancy? From the IRS:

You may be able to file as head of household if you meet all the following requirements.

You are unmarried or "considered unmarried" on the last day of the year.

You paid more than half the cost of keeping up a home for the year.

A "qualifying person" lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the "qualifying person" is your dependent parent, he or she does not have to live with you.


Qualifying person:


Your home was the main home of your child, stepchild, or foster child for more than half the year.


I wasn't arguing with you over how your accountant filed your form.  I was biatching about accountants.

/carry on
 
2013-01-18 07:40:01 PM

what_now: xynix: Head of Household.. Married or single you get that if your kid(s) live with you.

Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.


As I recall, if you were separated from your spouse for at least the last 6 months of the tax year, you can file Head of Household even if you're still married.
 
2013-01-18 07:42:46 PM

what_now: xynix: Head of Household.. Married or single you get that if your kid(s) live with you.

Head of Household is ONLY for single people. If you file HoH and you are married, you are filing incorrectly.

"But..my HR Block person told me.." Of course he did. He works in a store front in a mall and has less tax training than your average freshman in acccounting.

"But..but I've been doing this for years!" Ok. So you've gotten lucky.

I review people's taxes for financial aid. This is the number one mistake, and I have never had someone come up with an argument besides those two.

You're doing it wrong.


From the IRS's website:

Head of Household

You may be able to file as head of household if you meet all the following requirements.

You are unmarried or considered unmarried on the last day of the year. See Marital Status, earlier, and Considered Unmarried, later.

You paid more than half the cost of keeping up a home for the year.

A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the qualifying person is your dependent parent, he or she does not have to live with you. See Special rule for parent , later, under Qualifying Person.


and

Considered Unmarried

To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. You are considered unmarried on the last day of the tax year if you meet all the following tests.

You file a separate return (defined earlier under Joint Return After Separate Returns ).

You paid more than half the cost of keeping up your home for the tax year.

Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences , later.

Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying person , later, for rules applying to a child's birth, death, or temporary absence during the year.)

You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described later in Children of divorced or separated parents (or parents who live apart) under Qualifying Child or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative. The general rules for claiming an exemption for a dependent are explained later under Exemptions for Dependents .
 
2013-01-19 04:29:10 AM

MyRandomName: Grand_Moff_Joseph: Tax policy favors the rich.

That is all.

America has a more progressive rate than any european nation. Stop lying.


While it's true that the US has the most progressive income tax rate in OECD, when it comes to progressiveness in tax policy we're actually 6th... from the bottom.

www.washingtonpost.com

Tax policy does, in fact, favor the rich. Which would you prefer - a $50,000 salary or $50,000 in dividends?
 
2013-01-19 06:57:36 AM
Property tax favors people who have kids, because part of it goes to fund schools. I'm being opressed too! ;)
 
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