Explanation of taxes?

[Hell Awaits Us All]

okay I am going to start doing taxes probably next year so can somebody help me figure this out? this is some very basic questions, I will learn about taxes alot more in depth over the next 2 years, but I really want to learn the very basics of how it works.

say you are making 60,000 during a year and you are single, how much of that is going to be remaining after everything (assuming no deductions)? like 60 - 70%?

and say you have a 300,000 dollar house and the tax deduction on that is around 20,000 a year. How does that work? your tax at the end of the year is reduced by 20,00?

 

[Ender Rises]

I really should file my tax returns. Ah fuck it.

 

[MasterOLightning]

You can expect to pay roughly 20% of what you make, or more, depending on income. Don't expect any substantial deductions unless you have significant work expenses, children, or have made huge charitible donations.

 

[Hell Awaits Us All]

You can expect to pay roughly 20% of what you make, or more, depending on income. Don't expect any substantial deductions unless you have significant work expenses, children, or have made huge charitible donations.

but I have heard mortgage payments (interest + land tax I believe) are both large deductions, is this not correct?

how does a deduction like that work? whatever you pay at the end of the year, it is reduced by the total amount of the reductions?

 

[AchrisK]

No, I am pretty sure that any deductions are subtracted from your total earnings, and then whatever that amount ends up being is what you are taxed on. So deductions are subtracted from the taxable amount, not the tax amount.

 

[Death Aflame]

I got money back from the government when I filed my taxes \m/.

 

[Hell Awaits Us All]

No, I am pretty sure that any deductions are subtracted from your total earnings, and then whatever that amount ends up being is what you are taxed on. So deductions are subtracted from the taxable amount, not the tax amount.

ohhhhhhhhhhhh, that makes more sense

so If I am making 80 gs and tax deductions on my house = 26 g's

I am taxed as If I am making 54 thousand?

 

[AchrisK]

ohhhhhhhhhhhh, that makes more sense

so If I am making 80 gs and tax deductions on my house = 26 g's

I am taxed as If I am making 54 thousand?

Yeah, that's my understanding. So there is a thing called a standard deduction that is available. I don't know what it is, but I think it is different at each tax level. Anyway if your interest and charitable giving etc. adds up to less than that standard deduction, you just take the standard. But at some piont as you have more deductions, you can surpass that standard and reduce your taxable income by more by itemizing your own deductions. Like for us, we were using itemized deductions while we were buying our first house. Well we paid it off in 10 years. At some point, and especially after it was paid off, we went back to using the standard deduction because it was better for us since we weren't paying a bunch of interest. My wife is REALLY smart with all this stuff.

 

[The Ozzman]

okay I am going to start doing taxes probably next year so can somebody help me figure this out? this is some very basic questions, I will learn about taxes alot more in depth over the next 2 years, but I really want to learn the very basics of how it works.

say you are making 60,000 during a year and you are single, how much of that is going to be remaining after everything (assuming no deductions)? like 60 - 70%?

and say you have a 300,000 dollar house and the tax deduction on that is around 20,000 a year. How does that work? your tax at the end of the year is reduced by 20,00?

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

 

[Valerie]

Vote for Ron Paul. No federal income tax.

 

[The Ozzman]

Vote for Ron Paul. No federal income tax.

and, therefore, no federal budget.

 

[Valerie]

and, therefore, no federal budget.

Yup. Fuck politics. That guy was just on Attack of the Show this morning

 

[Hell Awaits Us All]

QUICK QUESTION!

is this website 100% correct?

http://www.dinkytown.net/java/Tax1040.html

 

[Unfaithfully Metalhead]

I got money back from the government when I filed my taxes \m/.

That is because you overpaid in taxes... don't expect that every year... my job messed up and didn't withold enough taxes so I ended up owing taxes this past tax season...

 

[Unfaithfully Metalhead]

QUICK QUESTION!

is this website 100% correct?

http://www.dinkytown.net/java/Tax1040.html

Looks it but get a 1040 booklet from the IRS which explains pretty much everything and cross reference it or go on their site www.irs.gov ... other then that stop being a dumbass asking non tax experts on a metal board tax questions & get a accountant... some will give you free advice in hopes of getting you as a client and will save you lots of money in the long run.. jk ...

 

[Valerie]

and, therefore, no federal budget.

I just learned that the money the government gets is from the Federal Reserve System, which is actually not part of the government (at least they aren't regulated by them), they are privately controlled. Our federal income tax goes not to the government, but the bankers in the FRS, at least most of it. So, no federal income tax doesn't necessarily mean no federal budget, unless the FRS decides to stop giving money to the government (with interest at that, so the only way to pay off that debt the interest creates is to use more money from the FRS... perpetual debt).

Anyway, I got that from this.

 

[MetalAges]

All the tax stuff is a big balancing act. There's so many variables to deal with depending on where you are in life. Make sure you job takes out the proper taxes, make sure you select the proper amount of dependent points at your job, mortgage, kids, did you donate stuff (I only recently found out it actually does help a nice bit writing off donations!)... lots of junk! Do your self a favor come tax time and grab a copy of TurboTax as it will help you quite a bit. Then again, if you only are just starting work, no house, etc. you can easily enough just fill in the 1040EZ by hand. Mainly just fill in the blanks at that point.

 

[The Ozzman]

I just learned that the money the government gets is from the Federal Reserve System, which is actually not part of the government (at least they aren't regulated by them), they are privately controlled. Our federal income tax goes not to the government, but the bankers in the FRS, at least most of it. So, no federal income tax doesn't necessarily mean no federal budget, unless the FRS decides to stop giving money to the government (with interest at that, so the only way to pay off that debt the interest creates is to use more money from the FRS... perpetual debt).

Anyway, I got that from this.

You have any other sources to back that up?

 

[LithiumLulu]

My wife is REALLY smart with all this stuff.

See guys, this is why when you're complaining about gold digging girls you're getting it all wrong. If you're a real partnership, like a good relationship should be, she's not trying to get YOUR money, she's trying to protect your shared resources.

(Please understand AchrisK I'm NOT saying your wife is a gold digger.)


Dave, either sit down and learn about the laws or hire a good accountant. If you're just starting out you can probably get away with just doing the EZ form, but you could still be losing a lot of money. Like if you're in a band, you can take deductions for all kinds of stuff like CDs and even going to other people's shows. You can depreciate the value of your instruments. If the whole band goes out to eat together it's a business meeting. Keep all of your receipts, a good accountant can turn a box full of receipts into money in your pocket.

I thought you were going to school to major in business or finance??? You should be telling us how to make/save money!

 

[Hell Awaits Us All]

I thought you were going to school to major in business or finance??? You should be telling us how to make/save money!

I'm still getting gen eds at a community college. Business/finance starts at UIC in 08