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Mon Jan 28, 2013, 09:12 PM

Vague sense of futile rage while filing my tax return

The general population who works for an employer will pay 4.2% FICA and 1.45% Medicare this year (next year it goes back up to 6.2% unless Congress extends the break we've been getting for the past two years.)

Me? I pay 10.4% FICA and 2.90% Medicare because I'm self-employed. (Goes up to 12.4% FICA this year)

My Adjusted Gross Income for 2012 was $8,100 - whereas the Federal Poverty Level for my family of two was $15,130 for the year 2012.

So, regardless of the fact that I made just over HALF the FPL for myself and my daughter, I get to pay an additional $620 in taxes -- for programs they're doing their best to raise the eligibility age for and/or completely do away with, and make sure I never see a penny of my contributions returned to me.

This I already knew. But then I get a rude awakening to something I had paid little attention to thus far: The eligibility age for the Child Tax Credit.

It was bad enough that they reduced the Child Tax Credit from $1,000 to $800 - this credit has helped a lot of people like me. Then this year I discover that my daughter no longer qualifies because she turned 17 last year.

Oh, I'm sure the Federal Government had a really good reason for making the cut-off age be 17 instead of 18. She should have gotten a part-time job (in this economy?) I specifically forbade her from even trying to get a part time job because she has had a hard time passing all her classes as it is - she's had to make some up in summer school the past three years, and this year she is very close to not graduating unless she can make up for a failed English class. I think it's a bit more important for her to get a high school diploma than flip a few burgers to help out financially this year - it's her future I'm thinking about.

So there's another $745 that I had anticipated receiving, gone... another 9.2% of my overall income.

This, again, for a family of two making 53.5% of the Federal Poverty Level. That extra $1,365 would have really gone a long way for us.

But we really need to keep those tax breaks for the rich going, don't we?

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Reply Vague sense of futile rage while filing my tax return (Original post)
Flying Squirrel Jan 2013 OP
msongs Jan 2013 #1
green for victory Jan 2013 #2
Freddie Jan 2013 #3
Demo_Chris Jan 2013 #4
Make7 Jan 2013 #5
kenny blankenship Jan 2013 #6
JDPriestly Jan 2013 #7
liberal_at_heart Jan 2013 #8
Flying Squirrel Jan 2013 #9

Response to Flying Squirrel (Original post)

Mon Jan 28, 2013, 09:15 PM

1. our national politician are servants of the corporate police state and you don't count...nor do we n

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Response to Flying Squirrel (Original post)

Mon Jan 28, 2013, 09:24 PM

2. whatever you do while you prepare your taxes don't think of this website

 

at >$2,000 per second one who pays $20k to Unca Sammie this year will have those hard earned dollars blown on invading, conquering and drone bombing brown people 8,000 miles away in

10 seconds

in 10 seconds 20k is gone. This must be one of the biggest ripoffs in world history. It only took a generation to destroy the wealth of a nation.

http://costofwar.com

count to 10- then pretend you hear the unborn grandchildren's silent screams of slavery


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Response to Flying Squirrel (Original post)

Mon Jan 28, 2013, 09:46 PM

3. Discovered that one the hard way myself

The year your kid turns 17 you're SOL.
But if she goes to college, even community college, you now get the college tuition credits which are very nice.

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Response to Flying Squirrel (Original post)

Tue Jan 29, 2013, 12:44 AM

4. Obama made tax cuts on those earning 30K a MONTH permanent.

 

Seriously, I feel your pain. I am in exactly the same boat, except my daughter is too old for any credit. She works for the family as well. But it's either keep going or starve. There's no jobs paying over minimum wage part time here, and getting any kind of assistance is damn near impossible.

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Response to Flying Squirrel (Original post)

Tue Jan 29, 2013, 01:18 AM

5. What is FICA?      (From CNN Money)

 
What is FICA?

If you're a wage or salaried employee, your employer picks up half of this tax burden.

Under the Federal Insurance Contributions Act (FICA) 12.4% of earned income up to an annual limit must be paid into Social Security, and an additional 2.9% must be paid into Medicare.

That limit is $110,100 for 2012.

There are no earned income limits on Medicare taxes -- so even if your salary is well above the cap for Social Security tax, you will still owe Medicare tax on your total earned income.

If you're a wage or salaried employee, you pay only half the FICA bill (In 2012, 4.2% for Social Security plus 1.45% for Medicare), and the tax is automatically withheld.

Your employer contributes the rest.

If you're self-employed, however, you're expected to cough up both the employee and the employer share of FICA. You are, however, permitted to deduct half of this self-employment tax as a business expense.



FICA is Social Security. The 2.9% is for Medicare.

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Response to Flying Squirrel (Original post)

Tue Jan 29, 2013, 01:20 AM

6. "You were on holiday!" That's how they explained it around here.

We had a nice long talk about it at the time. You had a two year vacation on your FICA taxes, they said. It was never supposed to be permanent! (But neither were the income tax cuts - yet they kept those in place all the way up to $400K) Therefore, you aren't supposed to say that your taxes went up, even though you have to pay more. It just means that Break Time is over, they said. Who gets two years of holidays and complains? Only greedy, lazy workers, they hinted, who didn't deserve it in the first place.

And you said it yourself, those income tax cuts for the rich aren't going to pay for themselves - so everyone get back to work.

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Response to Flying Squirrel (Original post)

Tue Jan 29, 2013, 02:23 AM

7. Those of us now on Social Security and about to go on Social Security

and Medicare paid higher tax rates than you pay. So complain you may, but it could be worse.

The real problem is that wages have not risen. That's the hidden cost of "free trade" -- low wages.

Stop shopping at stores that sell cheap imports. Buy second hand if you will, but don't buy stuff made overseas. That is what we can do to bring jobs back to America, raise wages and ultimately reduce the burden of taxes.

As for the child tax credit, a 17-year-old is not really a child any more. She will soon be out of your house and no longer your financial responsibility unless you take responsibility for her. At any rate, she may be able to get a job before long.

Actually, her grades might go up if she had a part-time job a few hours a week. Might make her feel more confident. I worked when I was young. Many people in my generation did. It was really great for us. It's depressing for a young person not to have her own money.

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Response to JDPriestly (Reply #7)

Tue Jan 29, 2013, 02:31 AM

8. getting ready for college is a lot more work now days

heck with all the new standardized tests just graduating high school is a lot more work than it use to be. My daughter has been wanting to get a job but she is so busy doing homework she doesn't have time to look for a job let alone put in the hours to actually work. and nearly out of the house is not out of the house. We are still paying the rent on a 4 bedroom house so my daughter can have a room. We are still paying for her food and clothing.

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Response to liberal_at_heart (Reply #8)

Tue Jan 29, 2013, 02:55 AM

9. AMEN and EXACTLY.

High school is way different these days, I'd probably have been having trouble myself since I can't seem to be of much help to her when she does ask for help. The assignments don't look anything like what I was given at her age.

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