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(Forbes)   Raising taxes on the rich actually helped some people who make around $500k a year due to an obscure rule called AMT addback. This just happens to include people like the President   (forbes.com) divider line 80
    More: Obvious, Raising Taxes, Alternative Minimum Tax, President Obama, presidents, obamacare, itemized deductions, interest income, computing platform  
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7906 clicks; posted to Main » on 13 Apr 2014 at 7:16 PM (36 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-04-13 09:14:41 PM  

revrendjim: cchris_39: This is ridiculous. We need major simplification.

I took my masters in accounting in 1984 and passed the CPA exam a year later. That and 30 years experience and I'd give myself a 50/50 chance of getting that return correct without relying on tax preparation software.

The average American with the average return should be able to do their own return by hand in an afternoon.

Or we could do it like other countries do and let the IRS compute it. They already have your w2's, 1099s, etc. and their computer is going to check it anyway, so they could just send you a statement that says "this is what we calculated. If you're cool with that we're done. Otherwise you can send in your own paperwork."


That's been proposed, but the tax software lobby paid off enough people to stop it. There was actually a law banning the IRS from offering free tax software or preparation. Peter Roskam and Congressman Ron Kind of Wisconsin are the leading tax software company whores on this issue.

http://consumerist.com/2013/04/15/legislation-would-prevent-irs-from -p roviding-pre-filled-tax-returns/
 
2014-04-13 09:15:00 PM  

FlyinS: cchris_39: This is ridiculous. We need major simplification.

I took my masters in accounting in 1984 and passed the CPA exam a year later. That and 30 years experience and I'd give myself a 50/50 chance of getting that return correct without relying on tax preparation software.

The average American with the average return should be able to do their own return by hand in an afternoon.

They easily can unless they're wholly retarded.


The average American CAN do their return by hand in an afternoon. But they'll pay H&R BLock $250 to do their 1040-EZ so they can get their refund anticipation debit card product so they can get their refund 1 week faster, even though if they adjusted their withholding correctly they would have had that money all along instead of giving an interest free loan to the government.

Ergo, tax return = savings account for average people minus huge charges and fees that go to the private tax prep industry.
 
2014-04-13 09:22:31 PM  

ultraholland: fusillade762: I love how letting a portion of what was supposed to be a temporary tax cut expire counts as a tax increase.

Seriously. That same thinking turns Because the President's book revenue was down, he contributed $90,000 less to the Fisher House Foundation, an organization that helps military families. into "President Obama took $90K away from military families."


When VA funding goes from a 5% increase to a 4% increase, headlines say, "REPUBLICANS SLASH VA FUNDING." Fair's fair.

Also since the president was including in the fark headline, subby is a racist.
 
2014-04-13 09:26:23 PM  

insano: That's it. Who let subby out of his derp cage?


^THIS^

Who the hell considers AMT an "obscure tax rule"?!?
 
2014-04-13 09:28:21 PM  

suburbanguy: insano: That's it. Who let subby out of his derp cage?

^THIS^

Who the hell considers AMT an "obscure tax rule"?!?


The poors.

/kidding.
//although it's not like they have any reason to need to know that.
 
2014-04-13 09:33:56 PM  

Nabb1: suburbanguy: insano: That's it. Who let subby out of his derp cage?

^THIS^

Who the hell considers AMT an "obscure tax rule"?!?

The poors.

/kidding.
//although it's not like they have any reason to need to know that.


I'm not poor, nor upper middle class. Square in the middle, so I don't pay AMT. But I prepare taxes, and AMT is anything but obscure...
 
2014-04-13 09:37:22 PM  

suburbanguy: Nabb1: suburbanguy: insano: That's it. Who let subby out of his derp cage?

^THIS^

Who the hell considers AMT an "obscure tax rule"?!?

The poors.

/kidding.
//although it's not like they have any reason to need to know that.

I'm not poor, nor upper middle class. Square in the middle, so I don't pay AMT. But I prepare taxes, and AMT is anything but obscure...


AMT has bitten us in the ass. Meh, that's life, I guess. My brother-in-law is a CPA, so I won't see him again until Wednesday, when he'll looke like an extra from the Walking Dead.
 
2014-04-13 09:41:50 PM  

Nabb1: suburbanguy: Nabb1: suburbanguy: insano: That's it. Who let subby out of his derp cage?

^THIS^

Who the hell considers AMT an "obscure tax rule"?!?

The poors.

/kidding.
//although it's not like they have any reason to need to know that.

I'm not poor, nor upper middle class. Square in the middle, so I don't pay AMT. But I prepare taxes, and AMT is anything but obscure...

AMT has bitten us in the ass. Meh, that's life, I guess. My brother-in-law is a CPA, so I won't see him again until Wednesday, when he'll looke like an extra from the Walking Dead.


That's me. Not a CPA, but a account/financial advisor at a small/boutique CPA firm. Should be a CFP next summer.
 
2014-04-13 09:59:41 PM  
You never go ATM.
 
2014-04-13 09:59:53 PM  
I wish I could get away with just the 1040EZ. I've got to deal with the farking 2555, but at least this year the exchange rate is back to normal again, so at least I'm not going to need to scramble to pay taxes doubly this time.

Don't let anyone tell the average American guy's taxes are easily figured using the simplest forms. It's still a pain in the ass.
 
2014-04-13 10:20:58 PM  

cchris_39: This is ridiculous. We need major simplification.

I took my masters in accounting in 1984 and passed the CPA exam a year later. That and 30 years experience and I'd give myself a 50/50 chance of getting that return correct without relying on tax preparation software.

The average American with the average return should be able to do their own return by hand in an afternoon.


So what if you are a CPA? That is irrelevant. Now tell us your experience in personal income taxes. Hell, I have done the taxes of a number of CPAs because the vast, vast majority don't do personal income taxes.

As a person without any designation who first saw a 1040 last year I could have cranked that 1040 out in a day manually, easy. When my manager sent it around to our team and nobody could believe how simple it was. The only question was what the laws are regarding state taxes for the President (the average person in his situation would have been taxable in pretty much every state with taxes, but we assume there is some protection for the President).
 
2014-04-13 10:24:42 PM  

AverageAmericanGuy: I wish I could get away with just the 1040EZ. I've got to deal with the farking 2555, but at least this year the exchange rate is back to normal again, so at least I'm not going to need to scramble to pay taxes doubly this time.

Don't let anyone tell the average American guy's taxes are easily figured using the simplest forms. It's still a pain in the ass.


Any time you have foreign income it will get messy. Even for those nice easy countries in Europe. You could always see if FTCs make more sense than the FEIE.
 
2014-04-13 10:42:31 PM  

dywed88: AverageAmericanGuy: I wish I could get away with just the 1040EZ. I've got to deal with the farking 2555, but at least this year the exchange rate is back to normal again, so at least I'm not going to need to scramble to pay taxes doubly this time.

Don't let anyone tell the average American guy's taxes are easily figured using the simplest forms. It's still a pain in the ass.

Any time you have foreign income it will get messy. Even for those nice easy countries in Europe. You could always see if FTCs make more sense than the FEIE.


I'm riding the edge of the FEIE, coming in income-wise just above but with deductions just under. As long as it remains this way, I'm happy just to spend an hour or two copying over information and writing -0- on that last line.

I was thinking of doing that a couple years ago when the American dollar was devalued like a motherfarker. But tax rates here in Japan are pretty low, I'm not sure how much the FTC would help me (and I'm too cheap to get an accountant when I don't have to).
 
2014-04-13 10:43:56 PM  
Whenever rich people, like D.C. insiders, tell you that something they are doing will hurt the rich, they are lying. They do not do things which hurt themselves.
 
2014-04-13 10:46:38 PM  

Linux_Yes: a flat tax would fix everthing and be much simpler, but the wealthy/big business folks would never allow that because then they and their high priced tax lawyers wouldn't be able to game the system.


Exxon: managed to profit 90 billion one quarter and didn't pay any taxes on it.  now that is talent.


That must have revenue, not profit.
 
2014-04-13 10:51:12 PM  

AverageAmericanGuy: dywed88: AverageAmericanGuy: I wish I could get away with just the 1040EZ. I've got to deal with the farking 2555, but at least this year the exchange rate is back to normal again, so at least I'm not going to need to scramble to pay taxes doubly this time.

Don't let anyone tell the average American guy's taxes are easily figured using the simplest forms. It's still a pain in the ass.

Any time you have foreign income it will get messy. Even for those nice easy countries in Europe. You could always see if FTCs make more sense than the FEIE.

I'm riding the edge of the FEIE, coming in income-wise just above but with deductions just under. As long as it remains this way, I'm happy just to spend an hour or two copying over information and writing -0- on that last line.

I was thinking of doing that a couple years ago when the American dollar was devalued like a motherfarker. But tax rates here in Japan are pretty low, I'm not sure how much the FTC would help me (and I'm too cheap to get an accountant when I don't have to).


Generally, low foreign tax rates favour FEIE (especially if you have significant US source income) and high foreign tax rates favour FTCs (with the carryforwards). Of course if you have income in excess of the threshold and/or investment income you will want to do both if you are in low tax country. It is just something a lot of people forget to think about and I know people that claimed up to the FEIE limit and then let the US fully tax their excess income.
 
2014-04-13 11:13:12 PM  

dywed88: AverageAmericanGuy: dywed88: AverageAmericanGuy: I wish I could get away with just the 1040EZ. I've got to deal with the farking 2555, but at least this year the exchange rate is back to normal again, so at least I'm not going to need to scramble to pay taxes doubly this time.

Don't let anyone tell the average American guy's taxes are easily figured using the simplest forms. It's still a pain in the ass.

Any time you have foreign income it will get messy. Even for those nice easy countries in Europe. You could always see if FTCs make more sense than the FEIE.

I'm riding the edge of the FEIE, coming in income-wise just above but with deductions just under. As long as it remains this way, I'm happy just to spend an hour or two copying over information and writing -0- on that last line.

I was thinking of doing that a couple years ago when the American dollar was devalued like a motherfarker. But tax rates here in Japan are pretty low, I'm not sure how much the FTC would help me (and I'm too cheap to get an accountant when I don't have to).

Generally, low foreign tax rates favour FEIE (especially if you have significant US source income) and high foreign tax rates favour FTCs (with the carryforwards). Of course if you have income in excess of the threshold and/or investment income you will want to do both if you are in low tax country. It is just something a lot of people forget to think about and I know people that claimed up to the FEIE limit and then let the US fully tax their excess income.


The pillow is pretty soft when you bite it. And after a while you kind of get used to it.
 
2014-04-13 11:23:15 PM  

jfarkinB: brimed03: ...subby seems to be implying that the man with the most heavily scrutinized tax returns in the world manipulated the tax code for personal gain.

Yup, because saving a few thousand dollars on a year's taxes would totally be the most important financial benefit of being President.


Right. Another good point.
 
2014-04-13 11:30:47 PM  

fusillade762: a series of tax increases

I love how letting a portion of what was supposed to be a temporary tax cut expire counts as a tax increase.


Brilliant, isn't it?  I could swear hearing some talking head on FOX News talking about how they were hoping that the expiration would happen on a Democrat's watch, so they could blame him.

Rubes.
 
2014-04-13 11:41:38 PM  
I was trying to find where he came up with the $2,310 figure at, but I have no f*cking clue.

My guess is, he's just trying to get all the right-wing news to pick up the headline without actually noting that he never actually shows where that figure came from or cites what tax it is.
 
2014-04-14 12:14:22 AM  

Cubansaltyballs: I was trying to find where he came up with the $2,310 figure at, but I have no f*cking clue.

My guess is, he's just trying to get all the right-wing news to pick up the headline without actually noting that he never actually shows where that figure came from or cites what tax it is.


The ACA introduced two taxes: 0.9% Additional Medicare Tax on earned income (employment and self-employment) over $250,000 (MFJ, $125,000 MFS, $200,000 single) and 3.8% Net Investment Income Tax on net investment above that threshold.

Obama paid $2,174 of the former and $136 of the latter, combined for $2,310 as reported on line 60 of the 1040.
 
2014-04-14 12:23:42 AM  
Nabb1: My brother-in-law is a CPA, so I won't see him again until Wednesday, when he'll looke like an extra from the Walking Dead.

I once rented a room from a CPA. The stress of tax season triggered her latent schizophrenia.
 
2014-04-14 12:27:58 AM  
Linux_Yes: a flat tax would fix everthing and be much simpler, but the wealthy/big business folks would never allow that because then they and their high priced tax lawyers wouldn't be able to game the system.

And yet it is always the liberals who are always opposed to the flat tax system, because it will only benefit the rich, who pay vastly higher taxes than anyone else in America.

Funny how that works.
 
2014-04-14 03:07:19 AM  
500k a year isn't that much money when you consider mortgage, doc fees for the boat, kids college, etc... It doesn't go as  far as you'd think.
 
2014-04-14 03:17:06 AM  

Dwindle: Linux_Yes: a flat tax would fix everthing and be much simpler, but the wealthy/big business folks would never allow that because then they and their high priced tax lawyers wouldn't be able to game the system.

And yet it is always the liberals who are always opposed to the flat tax system, because it will only benefit the rich, who pay vastly higher taxes than anyone else in America.

Funny how that works.


This.

Look, I'm for a  *straighter* tax because I'd much rather pay a straight 40% (and if I'm at a third now, then yes, next year is 40% at minimum) than an official 90 where I figured out how to write off half of my income.   Helps everyone, and not *just* the politically connected who can write favorable exemptions.  .

But flat tax is counterproductive.

/Among other things, I don't get why it's at least possible to pay taxes while being on welfare. Seems like you'd want to fix that if only to remove the deadweight losses.
 
2014-04-14 03:42:54 AM  

Phony_Soldier: 500k a year isn't that much money when you consider mortgage, doc fees for the boat, kids college, etc... It doesn't go as  far as you'd think.


I've always found it instructive to think in terms of Midwest and Coast.  (AKA Red State + Midwest/Blue State or Not-dense city vs. Dense city)

General Rule of thumb: $1 of house in Midwest is $5-10 of house in Coast.  $1 of YARD is $10-100 in Coast. (Not joking  There's these MULTI-million dollar mansions with a smaller yard than I had growing up as a kid.  If they have one at all).

This leads to the Rule:.  $1 of after-tax income in Midwest is ~$2 in Coast.  (Obviously, this is an average)  And of course, because you have progressive taxes, that's $3 after-tax.

So $500K Coast (and if you're making $500K, you're on the Coast or you did something REALLY right) is ~$150K Midwest.  Sure, it's nice to HAVE, but it's not "Fark you" money by any means.

Especially if you're in NYC, and your tradeoff is between spending a few hundred thousand over the kid's lifetime shipping the kid off to private school or getting a house in a *really* nice neighborhood (or shipping the kid to shiatty publics, but if that was actually an option, the 2-income trap wouldn't exist).
 
2014-04-14 06:51:10 AM  
I love how Farkers are downplaying and deflecting simply because the President is involved. The same people that would crucify Romney for taking advantage of the same things.
 
GBB
2014-04-14 07:27:09 AM  

TerminalEchoes: I love how Farkers are downplaying and deflecting simply because the President is involved. The same people that would crucify Romney for taking advantage of the same things.


Until Romney's effective tax rate at least matches mine, he'll still be crucified.  Obama's effective rate is much higher than mine, and apparently went up this past year.  Yeah, he gets a pass.
 
2014-04-14 07:35:20 AM  

TerminalEchoes: I love how Farkers are downplaying and deflecting simply because the President is involved. The same people that would crucify Romney for taking advantage of the same things.


TFA: a farking FORBES writer saying Obama's return "remains remarkable in just how unremarkable it is"
You: Farkers are downplaying this!!!
 
2014-04-14 11:00:30 AM  
I paid $2 in fed taxes in 2013. Got over $250 back. Just the way I like it. Slick.

/Why? I'm a leech.
 
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