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(CBS New York)   You could save thousands of dollars on Obamacare simply by getting a divorce   (newyork.cbslocal.com) divider line 90
    More: Stupid, obamacare, bean bags, Ex-wife  
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1284 clicks; posted to Politics » on 07 Nov 2013 at 12:59 PM (50 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-11-07 02:17:58 PM  
Save thousands on a Stafford school loan by getting a divorce.

same-same
 
2013-11-07 02:19:26 PM  

sendtodave: DamnYankees: Doktor_Zhivago: My divorce saved me all kinds of money... said no one ever

Seriously, though.

Imagine that single person was very bootstrappy. Grew up poor, but worked hard in school. True American spirit. She immediately got a job with the *highest* income (short of CEO) around $130000 per year. Where does the other $100000 come from?

And this is where we see that the idea of bootstraps, rags to riches is bullshiat.

It's kinda a thing in China where, when a guy looks to get married, the potential bride expects him to own a house. Not get mortgage, but own one outright. And his parent's house won't do anymore. He needs his own place.

Of course, it'd take him his whole life to save that much on a workers salary! So, really, the bride is marrying his family, since that's where the money comes from. Your family is poor? Sucks to be you. You must be poor quality.

Seems the same attitude here. Unless you are born on third base, fark ya.


...

Eh, I'm bored.


Oh, and that wasn't directed at damnyankees or anything, just that damned picture.
 
2013-11-07 02:20:41 PM  

kidgenius: DamnYankees: sendtodave: I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

Joint filing is more expensive if both parties make identical amounts of money. It's really simple.

Person 1: $350K income
Person 2: $350K income

Each by themselves would only pay a tax rate of 35% at the highest. If they get married, they now have a combined income of $700K, and all amounts over $450K are taxed at 39.6%.

You're right, they take a 25K hit by being married....or approximately 3% of their income. I'm going to have to bust out my microscopically tiny violin for this WSJ couple.


You're missing the point. Even if the marriage penalty only affected the wealthy (it doesn't) the proper reaction isn't "they're rich, they can afford it" but rather "Why are other just as rich (but single) people paying less?"

Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.
 
2013-11-07 02:28:51 PM  

Willas Tyrell: kidgenius: DamnYankees: sendtodave: I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

Joint filing is more expensive if both parties make identical amounts of money. It's really simple.

Person 1: $350K income
Person 2: $350K income

Each by themselves would only pay a tax rate of 35% at the highest. If they get married, they now have a combined income of $700K, and all amounts over $450K are taxed at 39.6%.

You're right, they take a 25K hit by being married....or approximately 3% of their income. I'm going to have to bust out my microscopically tiny violin for this WSJ couple.

You're missing the point. Even if the marriage penalty only affected the wealthy (it doesn't) the proper reaction isn't "they're rich, they can afford it" but rather "Why are other just as rich (but single) people paying less?"

Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.


The penalty only kicks in if there are kids involved.
 
2013-11-07 02:38:53 PM  

Mike Chewbacca: Willas Tyrell: kidgenius: DamnYankees: sendtodave: I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

Joint filing is more expensive if both parties make identical amounts of money. It's really simple.

Person 1: $350K income
Person 2: $350K income

Each by themselves would only pay a tax rate of 35% at the highest. If they get married, they now have a combined income of $700K, and all amounts over $450K are taxed at 39.6%.

You're right, they take a 25K hit by being married....or approximately 3% of their income. I'm going to have to bust out my microscopically tiny violin for this WSJ couple.

You're missing the point. Even if the marriage penalty only affected the wealthy (it doesn't) the proper reaction isn't "they're rich, they can afford it" but rather "Why are other just as rich (but single) people paying less?"

Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.

The penalty only kicks in if there are kids involved.


Ah. It's a trick regarding the exemptions, then. A single parent gets a better deal than a couple.

Oh, that's so unfair. We should charge single parents more.
 
2013-11-07 02:41:16 PM  
People get divorced for financial reasons and continue to live together "in sin" all the time.  This is nothing new.
 
2013-11-07 02:41:24 PM  
"If we get divorced we can save a bunch on insurance. And we can save like $300 a month on rent if I move in with my buddy Dave for a couple weeks.  Also I'm screwing Allison from work... no direct savings there, but yeah, I want to break up."
 
2013-11-07 02:43:18 PM  

Willas Tyrell: Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.


That calculator is fundamentally wrong, they assume each person gets HoH.  Which if both are living in the same house you can't get 2 HoH deductions.
 
2013-11-07 02:43:53 PM  

flondrix: People get divorced for financial reasons and continue to live together "in sin" all the time.  This is nothing new.


Medical bills have been a cause of that for some time.

http://www.cbsnews.com/8301-505144_162-37041164/health-care-medical- bi lls-force-some-couples-to-divorce/
 
2013-11-07 03:02:23 PM  

vudukungfu: flucto: If you had one of those substandard wives before the Affordable Wife Act became law, and you liked that wife, you will be able to keep her.

But what if I wanted to upgrade to Platinum?


Hair dye/bleach?
 
2013-11-07 03:05:54 PM  

Willas Tyrell: Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.


Is that calculator figuring that each couple filing separately is claiming their child as a dependent? You can't do that.

H&R block, 2 people making $50,000 each, 1 kid, standard deduction:

Filing separately:
$3969
$5929
Total: $9898

Jointly:
Total: $9883

They save $15 filing jointly.
 
2013-11-07 03:13:06 PM  

vudukungfu: But what if I wanted to upgrade to Platinum?


Ah, a "high deductible" plan.
 
2013-11-07 03:24:19 PM  

James!: He married her to get health insurance and now that she's lost her job and he has to pay in he wants a divorce to "save money" because of Obamacare.  Yeah, sure.


thinking the exact same thing.  it's love that matters, right ;)
 
2013-11-07 03:25:42 PM  
I was told I could keep my wife if I liked her!!!
 
2013-11-07 03:32:57 PM  

Doctor Funkenstein: UrukHaiGuyz: In before "Obamacare is designed to destroy traditional families!!!!!1"

/No, you're a socialism!

Too late.  Comments from TFA:

Progressives, gleefully wrecking the American family for 100 years.

The collectivists try to break up as many families as possible. Remember, the govt is your family.

Liberals believe the State is the only family. They have spent decades destroying the families with anti-family welfare programs that eliminate fathers now they are working on the middle class.


The projection in those comments is STAGGERING.

/from the party who calls anyone stepping the SLIGHTEST bit out of line a traitor to party and country...
 
2013-11-07 03:33:44 PM  

Jacobin: I was told I could keep my wife if I liked her!!!


Be honest, you went for the catastrophic wife.
 
2013-11-07 03:35:57 PM  
James!:
He married her to get health insurance and now that she's lost her job and he has to pay in he wants a divorce to "save money" because of Obamacare.  Yeah, sure.

Yeah, this totes sounds like the kind of wholesome Christian family values that Obongo and his turtle-marrying cronies are dedicated to destroying...

jst3p:
http://www.cbsnews.com/8301-505144_162-37041164/health-care-medical- bi lls-force-some-couples-to-divorce/

Just sad.  The stories I have heard were of couples who mutually divorced so that the sick one could get on Medicaid without the healthy one losing every cent they had.  That said, in that circumstance I would insist that my wife divorce me if not doing so meant that she was left impoverished after my demise.
 
2013-11-07 03:49:58 PM  

impaler: Willas Tyrell: Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.

Is that calculator figuring that each couple filing separately is claiming their child as a dependent? You can't do that.

H&R block, 2 people making $50,000 each, 1 kid, standard deduction:

Filing separately:
$3969
$5929
Total: $9898

Jointly:
Total: $9883

They save $15 filing jointly.


Choosing 50k each gives you that result, but with other numbers that will change.  With equal incomes, there's no (material) difference, unless the combined amount would put you in a different tax bracket.  At its most extreme, filing separately can cost up to $32k extra in taxes.

If you run that simple calculation at H&R with $87,500 each, the married couple will face $29,774 in taxes, versus $29,273 for two single people.  About a $500 penalty.
 
2013-11-07 03:52:06 PM  

James!: Jacobin: I was told I could keep my wife if I liked her!!!

Be honest, you went for the catastrophic wife.


I thought they were all high deductible.
 
2013-11-07 03:59:01 PM  

Garet Garrett: impaler: Willas Tyrell: Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.

Is that calculator figuring that each couple filing separately is claiming their child as a dependent? You can't do that.

H&R block, 2 people making $50,000 each, 1 kid, standard deduction:

Filing separately:
$3969
$5929
Total: $9898

Jointly:
Total: $9883

They save $15 filing jointly.

Choosing 50k each gives you that result, but with other numbers that will change.  With equal incomes, there's no (material) difference, unless the combined amount would put you in a different tax bracket.  At its most extreme, filing separately can cost up to $32k extra in taxes.

If you run that simple calculation at H&R with $87,500 each, the married couple will face $29,774 in taxes, versus $29,273 for two single people.  About a $500 penalty.


How will the married couple that earns $175,000 be able to pay that extra $500 a year?!? In some places, $175k means you're barely making ends meet!
 
2013-11-07 04:01:11 PM  

Garet Garrett: Choosing 50k each gives you that result, but with other numbers that will change.  With equal incomes, there's no (material) difference, unless the combined amount would put you in a different tax bracket.  At its most extreme, filing separately can cost up to $32k extra in taxes.


Each making the same gives the WORST outcome for married. Usually, one spouse earns more than the other, which almost always makes it beneficial to file jointly.
 
2013-11-07 04:02:38 PM  

monoski: James!: Jacobin: I was told I could keep my wife if I liked her!!!

Be honest, you went for the catastrophic wife.

I thought they were all high deductible.


It's the goddamn copay that gets you, especially if you want to go in network ifyouknowwhatimeanandIthinkyoudo.
 
2013-11-07 04:06:40 PM  
How about the vast majority making less than $50k a year? All your biatching happens among people who can afford healthcare.
 
2013-11-07 04:07:41 PM  

James!: ifyouknowwhatimeanandIthinkyoudo


Should have read the explanation of benefits before signing the rider.
 
2013-11-07 04:07:59 PM  

Mike Chewbacca: Garet Garrett: impaler: Willas Tyrell: Anyway, a pretty simple run through the calculator results in a penalty even with more moderate incomes. Two people each earning $50K per year, who have a dependent child together and no other deductions are paying a marriage penalty of $1200. That's overstating it  a bit - my hypothetical couple will likely get deductions for paying state income tax at the least - but it is there.

Is that calculator figuring that each couple filing separately is claiming their child as a dependent? You can't do that.

H&R block, 2 people making $50,000 each, 1 kid, standard deduction:

Filing separately:
$3969
$5929
Total: $9898

Jointly:
Total: $9883

They save $15 filing jointly.

Choosing 50k each gives you that result, but with other numbers that will change.  With equal incomes, there's no (material) difference, unless the combined amount would put you in a different tax bracket.  At its most extreme, filing separately can cost up to $32k extra in taxes.

If you run that simple calculation at H&R with $87,500 each, the married couple will face $29,774 in taxes, versus $29,273 for two single people.  About a $500 penalty.

How will the married couple that earns $175,000 be able to pay that extra $500 a year?!? In some places, $175k means you're barely making ends meet!


15% effective tax rate
15% retirement
Child Support
Health insurance
Employee Stock Purchase Plan
Vision
Dental
Mortgage
Vacation

You would be surprised at how quickly it isn't as much as it sounds like!
 
2013-11-07 04:11:41 PM  
Get the feeling this whole thing is just an elaborate trick on the gays?
 
2013-11-07 04:20:47 PM  

DamnYankees: Doktor_Zhivago: My divorce saved me all kinds of money... said no one ever

[www.slate.com image 568x374]


is that in Zimbabwe dollars?  who makes that much?
 
2013-11-07 04:23:44 PM  

Lsherm: nmrsnr: But then you'd have to pay for two separate plans instead of one, since you can't cover each other, also your taxes would go up, because you no longer can file jointly.

It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.


So much this.

How the hell do they come up with a tax tier that kicks in at 400k for individuals and 450k for filing jointly?

At those high income levels there is no way I'd file jointly - if we split the income and file separately we can have marginal tax rate increase at 850k instead of 450k. Making the jump from 33% to 35% at 850k instead of 450k gives you an 8k bonus for filing separately.

I guess married couples don't have to file jointly.
 
2013-11-07 04:26:16 PM  

Otherwise Just Fine: It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.

So much this.


Except the complete opposite is true, but yeah, "this" regardless.
 
2013-11-07 04:28:35 PM  
Sorry, the jump at 400k is from 35% to 39.6%. Making that jump at 850k instead is a savings of 18.4k. Even worse.

Drinking wine, I'll stop now.

/not stop drinking wine, just doing maths
 
2013-11-07 04:39:27 PM  

impaler: Otherwise Just Fine: It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.

So much this.

Except the complete opposite is true, but yeah, "this" regardless.


Sorry, I was using anecdote for data. I can't vouch for the "more often than not" part, just that it is entirely possible to face a marriage penalty. My girlfriend and I work at a company we founded together 10 years ago. We have the exact same salary, to the penny.

Now when the company does well, we have to decided whether to post profits and take the corporate tax, or take income and take the income tax.

I wish I had income near that level. I don't, but the logic seems very flawed to me. Why 400k for individuals but only 450k for couples? Seems like 2 x 400k = 800k would be more logical and fair.

I would feel the same way even if this was a break at 50k for individuals and 60k for couples. Just doesn't seem right to penalize couples that way, regardless of income level.
 
2013-11-07 05:18:22 PM  

sendtodave: Lsherm: nmrsnr: But then you'd have to pay for two separate plans instead of one, since you can't cover each other, also your taxes would go up, because you no longer can file jointly.

It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.

I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

What numbers are you using?


$110K person 1
$145K person 2
15K capital gains on person 2
40K mortgage interest on person 2

The capital gains exaggerates the penalty, but there's a penalty either way.  It seems the only way to keep joint filing lower is if one spouse makes next to nothing.
 
2013-11-07 05:40:21 PM  

Lsherm: sendtodave: Lsherm: nmrsnr: But then you'd have to pay for two separate plans instead of one, since you can't cover each other, also your taxes would go up, because you no longer can file jointly.

It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.

I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

What numbers are you using?

$110K person 1
$145K person 2
15K capital gains on person 2
40K mortgage interest on person 2

The capital gains exaggerates the penalty, but there's a penalty either way.  It seems the only way to keep joint filing lower is if one spouse makes next to nothing.


310k total for the household? Really?

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#M e asurement

The 95th percentile in the US is about 150k. You're double that. Pardon me while I stop caring.

Rich people's problems.
 
2013-11-07 06:07:53 PM  

sendtodave: Lsherm: sendtodave: Lsherm: nmrsnr: But then you'd have to pay for two separate plans instead of one, since you can't cover each other, also your taxes would go up, because you no longer can file jointly.

It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.

I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

What numbers are you using?

$110K person 1
$145K person 2
15K capital gains on person 2
40K mortgage interest on person 2

The capital gains exaggerates the penalty, but there's a penalty either way.  It seems the only way to keep joint filing lower is if one spouse makes next to nothing.

310k total for the household? Really?

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#M e asurement

The 95th percentile in the US is about 150k. You're double that. Pardon me while I stop caring.

Rich people's problems.


Well we're farking old!  And that's not very high for two middle-aged professionals in the DC area.  My wife isn't the lowest paid law partner on the east coast, but she's nowhere near the highest.  As for me, I have friends in the government who haven't gotten raises in three years who still make more than I do for comparable positions.  Not a lot more, but I'm definitely on the lower end of the bell curve.

Now, if we were living in Ohio where I grew up, that's an extraordinary amount of money.  My brother is still out there, he's a lawyer with 20 years at the same firm, and he's been matching my IT salary here.  In DC, where starter town homes are $500-600K, it's a little less significant.

And God farking help you if you live in NY.  Our income is probably what a hedge fund manager spends on his nannies.
 
2013-11-07 08:45:48 PM  

Lsherm: nmrsnr: But then you'd have to pay for two separate plans instead of one, since you can't cover each other, also your taxes would go up, because you no longer can file jointly.

It depends on your income, but there's usually a marriage penalty on income taxes, too.  More often than not you pay more if you file jointly.


If your taxes would go up due to divorce, you would both be making too much for subsidies.

Actually, if you had a few dependats there's probably a sweet spot where you'd save a fair amount on both. Questionable on whether it is worth losing out on all the legal protections for, though.
 
2013-11-07 08:50:03 PM  

sendtodave: DamnYankees: sendtodave: I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

Joint filing is more expensive if both parties make identical amounts of money. It's really simple.

Person 1: $350K income
Person 2: $350K income

Each by themselves would only pay a tax rate of 35% at the highest. If they get married, they now have a combined income of $700K, and all amounts over $450K are taxed at 39.6%.

Huh, it just evens out for me.

Of course, I'm not putting in a combined income of 700 farking thousand dollars, as that would be silly.

Lessee...

Oh. Ok. You pay more as a married couple if you are insanely rich.

Meh.


What's actually going on here is that the joint-filing bracket thresholds are generally less than double the filing-individually brackets. This means that around the level of any individual bracket, a dual-income couple with each individual making just under the individual bracket threshold would go into the next bracket if they filed jointly.

Simple version: filing jointly is tax advantageous for single-income households (which predominated in the early days of the income tax), and filing individually is tax advantageous for dual-income households. It's basically a tax break for stay-at-home parents.
 
2013-11-08 04:43:24 AM  

DamnYankees: sendtodave: I fiddled around using that calculator to try and make joint filing come out to be more expensive, and I couldn't do it.

Joint filing is more expensive if both parties make identical amounts of money. It's really simple.

Person 1: $350K income
Person 2: $350K income

Each by themselves would only pay a tax rate of 35% at the highest. If they get married, they now have a combined income of $700K, and all amounts over $450K are taxed at 39.6%.


Ok... Make the same income, and said income is more than a median income family would see in 16 years.
 
m00
2013-11-08 12:37:09 PM  

flucto: If you had one of those substandard wives before the Affordable Wife Act became law, and you liked that wife, you will be able to keep her.


I'm sorry but it doesn't fit the definition of "wife." We're all in this society together, and yeah you should have to pay more if you have a better wife but you get a better wife.
 
m00
2013-11-08 12:41:13 PM  

sendtodave: Imagine that single person was very bootstrappy. Grew up poor, but worked hard in school. True American spirit. She immediately got a job with the *highest* income (short of CEO) around $130000 per year. Where does the other $100000 come from?


yeah, if you go from college to microsoft or from college to google (which are top payers), you're not making more than 130k/yr that's for sure.
 
2013-11-08 12:59:55 PM  

m00: sendtodave: Imagine that single person was very bootstrappy. Grew up poor, but worked hard in school. True American spirit. She immediately got a job with the *highest* income (short of CEO) around $130000 per year. Where does the other $100000 come from?

yeah, if you go from college to microsoft or from college to google (which are top payers), you're not making more than 130k/yr that's for sure.


I'm not sure if this is sarcasm. I'm assuming it is.

I'm just basing that on bls numbers for highest salary jobs. It's somewhere between architectural and engineering managers, and dentists.

I guess I could assume she is a CEO or surgeon, making 165000+ right out of college, but, well, that's just silly. Sillier.
 
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