US taxes - not as bad as you might think

[rika60607 215]

I can tell you about the landline (AT&T):

Residence usage $16 - that's the price.

Taxes:

Federal access charge

911 system

maintenance fee

state charges

federal universal service fee

state service fee

state telecom relay svc and eqp

Federal tax 3%

State tax 7%

Municipal tax

...and the total bill is about $25.50, with no phone calls made.

Interesting that you bring that up, Nick. I'm trying to recall if there are taxes added to regular telephone service (landline)? I don't remember. How about water, trash, and electricity?

[NickD 203]

It's possible that it wasn't

But because of new laws it might be a good time to check your withholding. Last year the government changed withholding rules to put more money in peoples pockets.

The way the benefit works is that the Internal Revenue Service has issued new tax tables to employers, effective April 1. The tax tables reduce the amount of taxes withdrawn from your check, giving you a little more money to spend.

For example, a single worker making $50,000 and who gets a biweekly check should see about $20 more each paycheck.

However a few groups of people may get caught up in having too much money given back and find themselves owing the government when they do their taxes next April.

Those groups include workers with more than one job and households in which both spouses work.

If you have more than one job, it's possible that both employers could change your withholding causing you to keep too much money. It's also possible that your combined income could exceed the $75,000 limit at which the benefit is reduced. If you make more than $95,000 in gross income, you are not eligible for any of the credit.

It's common these days for couples to both work, which causes many families to get the tax credit though their combined income exceeds the guidelines, said Chas Roy-Chowdhury, head of taxation of the Association of Chartered Certified Accountants.

"So just make absolutely sure you don't end up getting on the wrong side of the IRS accidentally," he said.

Similarly, if you and your spouse file jointly and have a combined gross income of $150,000, the benefit is reduced. It's eliminated at $190,000. Your employer might not know your household income surpasses the limits and give you the money in your paycheck, which you'd have to pay back next April.

IRS is no different than the USCIS, burden of proof is on you shoulders, with severe penalties if you don't file in time. Finished my returns early this year, all done, but keep records. Between 2008 and 2009, a lot less money was deducted from paychecks, but the taxes according to the tax tables was exactly the same. A bit of help with the new Schedule L, but only another thousand deduction for us, if it's approved. We had to send in a much larger check than last year. Perhaps the reason why I did my taxes early, was curious, but feel we were ripped off. Again.

I would rather owe the IRS money than have them owe me, least I know, I am good for it, not so sure about the IRS. I have to be good for it, or else they will put a lean on my property, sell it at auction and throw me out on the street.

[Texanadian 10]

Why are FICA taxes non-deductible, in other words you are paying income taxes on top of your FICA taxes, and FICA taxes are skyrocketing. Then you see line 20a if you do get SS benefits, you have to pay taxes again on that amount.

We are paying 600 bucks a year just for taxes on our cable and cell phone with state and federal taxes, sales taxes are now on the bare necessities of life like clothes, and foods.

FICA taxes in the US used to be tax deductible. But Reagan increased the FICA tax rate in 1983 and made them non-tax deductible in order to "save" Social Security. How ironic he is always attributed with lowering (federal) taxes. Federal taxes that can be deducted and most people don't pay anything close to what the marginal rate is. Yet non deductible Social Security is taxed from dollar number one and the tax rate is always the marginal rate.

I'm lucky living where I do. I ditched cable and went to antenna TV. I pick up 50 channels. Lots of high definition. Much better sound and video quality compared to cable or satellite. I don't own a cell phone.

[I'm Gone 60]

Those without dependents have always subsidized those with dependents. The idea is that families with the dependent children were once and will someday pay into subsidizing other people's children. You sound like those retirees who don't like paying local school taxes.

I have no problem paying my share for things like schools since I have a kid in school, but I don't think it's right that people that are getting the most use out of everything by having more kids pay less in taxes than someone that is getting minimal or no use. As I said I got a $1,000 child tax credit that came right off the top of the federal taxes I owe and how is it fair to someone that has no kids that the government gives me a $1,000 just because I have a kid. I can see giving people a deduction for things like interest on home loan since building and buying homes creates jobs, but having kids does nothing but cause the government to spend more money for things like schools.

Edited February 1, 2010 by I Quit

[peejay 327]

FICA taxes in the US used to be tax deductible. But Reagan increased the FICA tax rate in 1983 and made them non-tax deductible in order to "save" Social Security. How ironic he is always attributed with lowering (federal) taxes. Federal taxes that can be deducted and most people don't pay anything close to what the marginal rate is. Yet non deductible Social Security is taxed from dollar number one and the tax rate is always the marginal rate.

I'm lucky living where I do. I ditched cable and went to antenna TV. I pick up 50 channels. Lots of high definition. Much better sound and video quality compared to cable or satellite. I don't own a cell phone.

I don't know what part of Houston you live in, but I don't quite get 50 HD channels over the air in my neck of the woods though there are quite a few channels to choose from. Too bad a big chunk of them are lame and useless Spanish channels. And some of the others in English are kind of lame too. How many hours can you entertain yourself looking at the Big 3 network wasteland, sit-com reruns, weather radar, holy rollers, or HISD educational feeds? Yuk! However, I gotta admit that the basic cable service I subscribe to isn't exactly nirvana, but I do get high speed internet bundled together with it whether I watch it or not. I can use that to watch streaming TV and movies on my computer via HULU, Fancast, Nick at Night, etc. We still have a $25/month bare bones land line we use as our primary phone along with cheapo calling cards for long distance and an answering machine. I have a cheapo prepaid cell phone that costs me roughly $9/month because I just use it for limited calls on the road. Sometimes an answering machine just won't do when you are waiting for an important call and can't sit at home waiting for it. The bottom line is the American public gets nickeled and dimed to death with all this stuff. You gotta pick and choose what you gotta have and what you can live without in these tough times. Wanting and needing are entirely different situations.

[NickD 203]

Still need a phone for business and emergency use, so why are they taxing the hell out of it.

Can't even do your taxes anymore without the internet, really the only place to get the latest information, so why are they taxing the hell out of that also?

The really only solution, is to keep the buck here. And I am all for EVEN trading with other countries, we use to be that way.

[mawilson 2,133]

Still need a phone for business and emergency use, so why are they taxing the hell out of it.

Write it off as a business expense then.

[Rebecca Jo 1,962]

That is all well and good, Trailmix, but also ignoring many facts.

If we want to know the real cost of Canadian healthcare, we have to include what amounts to a two-tiered system in Canada where the people who can afford it are buying private health insurance and/or paying cash in the USA where 90% of Canadians live within a 1/2 day drive of. Our medical facilities here (of which there are far more than should be for the population of our area) are heavily used by Canadians. Within an hour's drive of here are about 200,000 Americans and 2 MILLION Canadians. Our medical parking lots are full of Quebec license plates. This is nothing less than a major "pressure relief" valve for the Canadian system and if we employ a similar system here, the Canadians will have to stay in Canada and your taxes are going to go up. Very few of the Canadians here are here because they were sent by your health system, they are here to avoid your health system. That is a fact. You can like it or not.

The United States spends a large amount of it's GDP on national defense. You can like that or not, but it will not change and a goodly portion of that goes to protect our good friends to the north, which you can also like or not. There are plenty of troops right here training with the 10th mountain division on the backside of Mt Mansfield in Vermont that have a MAPLE LEAF on their shoulder patch and the f-16s (soon to be F-35s) circling over my house are about 30 seconds flying time from Montreal. If your country ever experienced any sort of threat, the Green Mountian Boys would be over Montreal in the blink of an eye. This is not a disparaging remark and I sleep much better knowing that the international border just a short distance from my bedroom window is Canada and not Belarus or North Korea. whatever we can do to maintain our good realtions with our good and loyal friends is fine with me. But the FACT is, Canada can devote a lot less of IT's GDP to national defense because of a good and strong neighbor within just a few seconds flying time of 90% of it's population.

You simply cannot make easy comparisons without full consideration

He can see Canada from his backyard!

[~PalmTreeGurl~ 154]

Ended up having to pay the IRS $388. Thought it would be higher than that actually, glad its not. However, this is my first time EVER to pay the government. Apparently between Adam and I they think we make too much.

[Gary and Alla 3,694]

That's interesting data, but what do you pay for healthcare insurance for your family? Before you can compare your taxes to Canadian taxes, you have to take that in to account as well. Was your income similar in Canada?

You also need to include the 7% federal sales tax in Canada, plus provincial sales tax (8% in Quebec) PLUS the helath insurance premium you pay when you register your vehicle.

[Gary and Alla 3,694]

He can see Canada from his backyard!

LOL. Front yard. I could throw rocks from my front porch and hit Canadians riding bicycles, but I don't.

[jundp 191]

Ended up having to pay the IRS $388. Thought it would be higher than that actually, glad its not. However, this is my first time EVER to pay the government. Apparently between Adam and I they think we make too much.

First year I've ever had to pay but it was much more than yours. Still, we don't own a house yet and we only have one dependent. And we make more than twice together what I made on my own the last several years.

I was shocked and a bit upset, but my very Socialist husband just shrugged.

[Gary and Alla 3,694]

The USA has military bases in 130 countries. So you really can't go down the road of USA/Canada military protection.

Taxes in USA and Canada are similar, but different. In the USA, you deduct personal exemptions from the top of your income. In Canada it comes from the bottom. (advantage USA). But the medical deduction is 7.5% of gross AND have to file itemized in USA. It's 5% of gross and you still get to file the standard exemption in Canada. (advantage Canada)

No state income tax in Texas. Nice not only for the no tax issue. But also for less paperwork to do this time of the year. And less cross border stuff to deal with if you're in your 1st year in the US.

Social Security is crippling in the USA while CPP in Canada is much MUCH cheaper.

IRA's in the US have small maximum contributions. RRSP's in Canada have a much higher maximum contribution and aren't phased out at higher incomes like they are in the US. There is also a withdrawal penalty in addition to the taxes if you withdraw early in the US. No such thing in Canada.

You will also owe the IRS money if you move out of the USA in the future and make more than 90K a year. They get you on your world wide income. Canada just taxes you on your Canadian income.

WHAT? Sorry, but we CAn go down that road. Canada has a miniscule military compared to ours (damn good, do not get me wrong, they are top notch troops and top notch equipment, most made in the USA or Britian) and they CAN do this because they have a huge and powerful and very reliable neighbor to the south and nearly ALL the Canadian population lives near this neighbor.

I mean no disrespect to my many good friends in Canada, where I have leived and worked and frequent several times a week, but it is simply a fact that the government is largely relieved of military obligation by the USA and this results in a huige dividend that can accrue to the Canadian population. I am very glad it is the case and have no ill will, like I said, better that than having North Korea short walk from my house.

[Gary and Alla 3,694]

While some of what you say may be true, I was just trying to stay on topic, not trying to make everything black and white.

There was a comparison made to Canadian taxes, I stated that you have to take your health insurance payment in to consideration when making that comparison (including the portion your employer may pay).

And you are exactly correct in that statement, no argument. However, if you will make that comparison than you have to include federal sales tax in your calculation for Canada. We have no federal sales tax in the USA. You also pay a health insurance premium when you register your automobiles. It varies by Province (Canadian health care is a national program administered and taxed by Provinces) in Quebec the tax on auto regiostration is very high, but Quebec has perhaps the worst health care in Canada and is most "in the hole" of any Province (and has the highest taxes).

But when you compare income taxes, you have to compare what you are getting for your money. The fact is that OUR taxes pay for some of Canada's national defense...or more properly...Canada relies on the USA for a good portion of its national defense and saves a lot of money that way that can be used for health care. For that matter...OUR villages' volunteer fire department routinely responds to fire calls in QUEBEC (and vice versa) and there are special provisions to allow our fire trucks and theirs to pass the border without stopping. A CBP or Quebec Douanes officer goes to the scene also. You cannot discount basic services at this level while stating that we must "add" to the calculation in the USA, but not add to the calculation in Canada. e have a coperative agreement with Nolin, Quebec and do not charge them for emergency response. If a Quebecois in Nolin, Quebec has a heart attack tonight, he will be transported by a Vermont ambulance to a Vermont Hospital and be treated in Vermont without checking if he has insurance. I, for one, am very glad we have this sort of relationship with our Canadian neighbors. THAT is a relief to the Canadian system because they do not have to provide a hospital in Nolin, Lacolle, etc. Those folks are just fine to go to Vermont, or New York, or New hampshire, or Maine, for that matter. Vermont is certainly not the lone ranger, here.

The Canadian health care system also receives a benefit from the more wealthy Canadians that leave Canada and come to the US for medical procedures they can get TODAY in Vermont, that they wait months for in Canada. An MRI is but one example. Burlington Vermont has TWICE as many locations to receive an MRI than does Montreal! Montreal has a population 40 times that of Burlington! If there are 15 cars in the parking lot at Vermont Radiology, 12 of them will be from Quebec. We even see a few from Ontario (Ottowa area, mostly). Fully half the cars at Fletcher Allen Hospital, not to mention a large number of patrons at the Burlington International Airport, (where announcements are made in French) the shopping mall, etc. Not complaining, hey we love the business and our health facilites here would be much less if we didn't have 2 million Canadian customers nearby, so I am not complaining. If it weren't for that there would probably be very little option for health care in a county of under 10,000 population.

It is just an example that the FREE MARKET system produces solutions to problems and fills needs where they need to be filled. If we adopt health care similar to Canada, Canada will lose the free market option that exists just a few miles away and half our hospitals, or more, will close. We will both lose.

[dalegg 143]

How many people actually received "making work pay" benefits? The SS office says it only went to people who receive SS benefits or Railroad benefits. Apparantly this was some sort of social security thing and apparantly its going to mean an extra $600 credit. If I can find a couple more charities out there I might just break even. Actually since California started withholding more at the end of the year the amount I'm getting back from the State almost cancels what I owe the feds.

Here's an interesting one- Did my taxes and left out my wife's W-2 info and I get back $2000 from State and Federal. Did the same thing but kept my wife's and left mine out and she gets back $3500/$2500.

Add both of our W2s together and we owe $700 to feds and get back $600 from State. Whas up with that!!