Getting a jump on 2012 taxes

Parent Cafe
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<p>Funny how people read into things differently.</p>

<p>I don’t read people as being cold, complaining, or thinking that they have it tough. I just see people commenting on what is reality. That the “rich” really do pay high taxes, that charts are exaggerated to make it look like poor people pay a high percentage of taxes, and the rich don’t (though they are paying for most everyone else). I’m not saying that higher income people shouldn’t pay more, or that lower income people should pay more. Class warfare is bull, and it is there to serve the purpose of dividing people to get votes.</p>

<p>The people that are really screwed as far as taxes, in my opinion, are the middle and upper middle class. No programs to help them out, treading water, having to pay full freight for everything, seeing their standard of living decline.</p>

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<p><a href=“http://www.coburn.senate.gov/public/index.cfm?a=Files.Serve&File_id=bb1c90bc-660c-477e-91e6-91c970fbee1f[/url]”>http://www.coburn.senate.gov/public/index.cfm?a=Files.Serve&File_id=bb1c90bc-660c-477e-91e6-91c970fbee1f&lt;/a&gt;&lt;/p&gt;

<p>It is not enough that the rich get their income taxed at lower rates, or tax free, of they can afford 401ks, and roths…</p>

<p>Then we have these subsidies…</p>

<p>The rich do not pay high taxes compared to any time in our lives…</p>

<p>And they make more money as a share of gdp too…</p>

<p>Class warfare will exist forever…</p>

<p>The poor do not pay a high percentage of income in taxes, but every
dollar is huge for the poor…</p>

<p>The middle class is screwed. I agree.</p>

<p>And yeah…people are cold…people that have, complaining about people
that don’t. Echhhhh…</p>

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<p>dstark, my comments aren’t a complaint that poor people don’t pay enough taxes - it’s a complaint that most measures that show something is fair or unfair are not absolute and are specifically made to support some agenda or the other. In fact I actually would rather have poor people pay no taxes or have withholdings of any kind at all.</p>

<p>As to being cold, different people are warm or cold based on what their priorities are. Some of us perhaps feel it is cold when we steal from our children while others think it’s stupid to even think of these considerations. But the most important factor for me isn’t how much is taxed, but how it’s used.</p>

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<p>

The math only fails when the goal is open-ended spending.</p>

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<p>Ok notrichenough, Wow…show me the math…</p>

<p>Dadof3…</p>

<p>We are never going to be happy with the way our tax dollars are spent. There is always going to be waste. There is always going to be money spent in areas that we don’t like.</p>

<p>I know you like numbers.
You know what I wrote is correct about the income and taxes of those at the top. You know the middle class is buried and the poor are poor.</p>

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<p>some like to see taxes as a fairness issue…they have it backwards. Taxes should be looked at as what is the minimal amount of money the government needs to perform its basics tasks.</p>

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<p>Ok geeps, the federal government has spent approximately 21 percent of gdp for decades.</p>

<p>Like I said before, it doesn’t matter who is in charge. </p>

<p>Federal Taxes are approximately 18 percent of gdp for decades. </p>

<p>Except in times of a financial crisis where taxes drop and spending rises…</p>

<p>Federal Taxes are 15 to 16 percent of gdp right now…
Govt spending is around 24 percent of gdp right now…</p>

<p>Is it really likely that we can run this country with federal taxes at 15 to 16 percent when we haven’t since when, before we were born?</p>

<p>What is the minimum level?</p>

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<p>TurboTax update that I just installed:</p>

<p>Release 4 (R4) – December 13, 2012</p>

<p>Final versions of the following forms were released:</p>

<pre><code>Form 4835, Farm Rental Income and Expenses
Form 4952, Investment Interest Expense Deduction
Form 8889, Health Savings Accounts (HSAs)
Form 8930, Midwestern Disaster Area Distributions
</code></pre>

<p>I guess the IRS is dribbling the forms out a few at a time.</p>

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<p>The horse trading is getting interesting. Looking forward to some certainty on taxes. Soon. So I can <see title="" thread=""></see></p>

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<p>“The horse trading is getting interesting. Looking forward to some certainty on taxes.”</p>

<p>So am I. We don’t have much time, plenty of nasty hits everyone is going to take pretty soon if something isn’t figured out ASAP.</p>

<p>I am waiting for my kids to wake up and open their presents (pretty lean, now that they’re older), and just crossed out an IOU for a certain amount of money and made it $100 smaller. Hopefully they won’t notice, it isn’t that obvious. If they notice it, I guess they can realize that the fear of the fiscal cliff is hitting them too. Though saving $200 towards the mega tax hit is pretty meager.</p>

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<p>If anyone wants to recoup part of the cost of their Turbo Tax send me a PM. I think I will buy the CD version this year.</p>

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<p>So, I just entered the info I have into Turbo Tax to get ready for filing the FAFSA, I want to cry, really hard, sobbing hard…they sure better fix this AMT and other tax credit stuff. We are looking at a swing from last year to this year of about $15,000 with all the lost deductions and extra taxes :eek: :eek: . We are NOT rich…</p>

<p>Unless I did the AMT wrong and then that swing is closer to $25,000 :eek:. I need to get clarification of how to enter a rental property loss to make sure. It’s pretty confusing.</p>

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<p>If you are in AMT, the patch can be worth up to around $8200.</p>

<p>

What kind of loss? From renting the property, or selling it?</p>

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<p>I guess that you would have been in 1969.</p>

<p>I guess you found the switch to turn on/off AMT. It was turned off by default when I ran it. I found the higher amount by running TaxAct. I should probably see if there are updates. I think that there will be updates into March given what the IRS is saying.</p>

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<p>SteveMA, I’m crying right there with you and for you. Even if they fix it all, I know it will still be bad for us, though not as bad if they put on some sort of bandaid. We converted some IRAs to Roths a few years ago, naively thinking we would save the money to pay upfront taxes on it by now (ha). So we had to come up with 25K last year, and 25K this year, in additional taxes to pay for it. I don’t know what we were thinking!</p>

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<p>notrichenough–rental property-we break even with rent collected vs expenses on the house (interest/taxes/upkeep/insurance, etc.) and the loss is mostly depreciation on the house (about 12,000-which is where most of the swing comes from-I’m guessing the rest is the marriage tax stuff. If they aren’t calculating these things in Turbo Tax we are really screwed. I look at how much we have paid in taxes already and they want MORE??? Seriously, with this swing we are looking at a tax bracket close to 40%. Is that right???</p>

<p>On Turbo Tax in the AMT section you can put the number in as a negative number or a positive number but the wording in the ‘help’ section has me scratching my head as to what to do. Here is the “help” for the adjustment in the AMT-maybe I’m reading something wrong here:</p>

<p>Adjustment for Activities for Which You Are Not At Risk</p>

<p>Who would have this adjustment?</p>

<p>You may have this adjustment if you are invested in activities that you are not at-risk (usually an investment in a partnership, S corporation or rental property would trigger this adjustment). The at-risk rules state that you cannot deduct a loss on your tax return unless that loss is a real economic loss to you. For example, if you invest $5,000 in a limited partnership and the partnership passes through $10,000 in losses to you after its first year of operations, you can deduct only $5,000 which is your true economic loss.</p>

<p>How to determine the adjustment amount:</p>

<p>Your adjustment can be a positive adjustment (giving you a smaller AMT loss than the regular tax loss) or a negative adjustment (giving you a larger AMT loss than the regular tax loss) determined as follows:</p>

<ul>
<li><p>Your AMT basis in the activity is less than your regular tax basis in the activity, allowing you to deduct a smaller loss for AMT purposes. Enter a positive adjustment.</p></li>
<li><p>Your AMT basis is greater than your regular tax basis, allowing you to deduct a larger portion of the loss for AMT purposes. Enter a negative adjustment.</p></li>
<li><p>You have regular tax and AMT carryover at-risk losses from prior years. Your regular tax carryover at-risk losses are different from your AMT carryover at-risk losses. If your AMT at-risk carryover losses are greater than your regular tax at-risk carryover losses then enter a negative adjustment for the difference. If your regular tax at-risk carryover losses are greater than your AMT at-risk carryover losses then enter a positive adjustment for the difference.</p></li>
</ul>

<p>So, what I did was enter the $12,000 loss as a negative as well as all of the mortgage interest paid on our main home and our rental property (different section of Turbo Tax). If I enter the 12K as a negative number it seems about right for what our final tax bill/tax bracket should be. If I enter it as a positive number I have a heart attack with the number showing up. It’s confusing to say the least.</p>

<p>Technically we have “invested” over $100,000 into this rental property via mortgage payments, not to mention the cost for repairs, etc.–can I use that number instead :D.</p>

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<p>“I look at how much we have paid in taxes already and they want MORE??? Seriously, with this swing we are looking at a tax bracket close to 40%. Is that right???”</p>

<p>And that is certainly not near enough, because obviously you must be part of the rich who even at that rate are not paying their fair share, so you should get ready to just hand it all over!! :(</p>

<p>God help us.</p>

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<p>For rental property, you need to fill in schedule E with all of the data. One of the things on schedule E is the depreciation, it will let you enter the date, amount, and property type.</p>

<p>The tax program will take care of transferring it over to the AMT form (form 6251). The only AMT preference for rental property is that the depreciation schedules can be different (longer), so this might increase your AMT income. I don’t think it will be a huge amount though.</p>

<p>

What you’ve paid already and what you owe are two different things. We’ve already had withheld more than 35% more than what last year’s tax bill was, but it is still only about 60% of what our final bill will be.</p>

<p>If your tax bill is 40% of your gross income, I think you are doing something wrong.</p>

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<p>The other problem if you didn’t fill out schedule E is that you won’t get the deduction of the loss from your income. You get to deduct the full loss up to $25K if your income is less than $100K, then it starts to phase out until you hit $150K in income. With a $12K loss, you would be able to fully deduct it up to around $125K in income (that’s modified AGI also, not gross).</p>

<p>Take a look at line 17 on your 1040, what does it show?</p>

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<p>Does anyone care to recall a certain candidate for a certain office who was talking about no more deductions and instead a rate decrease for EVERYONE???</p>

<p>Stupid, stupid, stupid</p>