Someone suggested the BEST tax deduction I ever heard
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Someone suggested the BEST tax deduction I ever heard
Sadiesmom | Thursday, January 09, 2003 - 05:44 pm     You know how people say the dividend is taxed twice. Well I was listening on C-Span when a man called in with the truely taxed twice dollars. Deduct the social security tax from your taxable income. Isn't this a great idea - and it will help every one who pays SS taxes. I'm calling my congressman and senators. Can you convince me this is a bad idea before I call? |
Dmarcomb | Friday, January 10, 2003 - 05:00 am     It's a great idea! In fact, here in California, we have an alternative to SS for CA state employees called CalPERS. I work for a public agency and we pay into CalPERS instead of SS. This contribution IS deducted before taxes. Makes a huge difference! I feel very fortunate to be part of CalPERS...it is alo very stable and much more likely to actually be around when I retire! |
Jo_5329 | Friday, January 10, 2003 - 07:21 am     Dmarcomb, sounds like a program I was in when I worked for a local government in Texas --- you could as that any amount be taken out of the taxable income, before taxes. It was called the DeferredComp program, and it did make a big difference in the amount of taxes finally taken out. Jo |
Dmarcomb | Friday, January 10, 2003 - 08:45 am     Hi Jo, Deferred Comp is a great benefit, but it is different from Social Security. CalPERS replaces Social Security and is mandatory for the employee if your company is a CalPERS participant.  |
Tntitanfan | Saturday, January 11, 2003 - 08:02 pm     Here's a selling point to use, Sadiesmom - Self-employment tax is paid by self-employed people as their Social Security and Medicare taxes. However, HALF of that tax can be used as an adjustment to income, which means taking it off of the taxable amount! I am in my eighth year as a tax preparer in the Tax Counseling for The Elderly - DREADFUL name - program sponsored jointly by the IRS and AARP, so my information is accurate. |
Sabbatia | Tuesday, January 14, 2003 - 06:05 pm     BUT, in thinking of it in these terms, should the amount you pay in for income taxes be taxed? If not, how exactly would you compute it? Would you deduct the prior yrs taxes, or would what you pay in not be included in what you are taxed on? If you get a refund, would you need to pay taxes on that? You are paying taxes with money that has been included in your taxable income and has been taxed. It's kind of weird, I'm an accountant and I've never thought of it in those terms. But then again, I've worked too darned many hrs today and I'm not the brightest bulb in the box after 5pm. |
Sadiesmom | Tuesday, January 14, 2003 - 07:57 pm     You are paying income tax on you FICA taxes. That should be simpe enough to deduct. Now when you get to that Salvador Dali thinking of taxing taxes, it gets more confused. My thought is you are paying FICA once on you income and then paying income tax on your income, including those you already paid in tax. Now FICA is the most regressive of taxes and that is why I thought it would be most likely to get oney into the hands of people who will spendi it first. |
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