Income Taxes

[Boxlicker101]

A while ago, there was a discussion here as to whether or not income taxes to be filed this year for 2009 would be higher than those filed last year on 2008 income. I did not get involved, because I didn't know, and didn't feel like expressing my lack of knowledge.

However, two things have happened recently: I recieved an advisory after my pension check was deposited in the bank, and the taxes withheld were about 10% higher than they had been. A few days later, I received my Schedule 1040 and instructions, so I dug out the instructions and my file copy of the 1040 for last year and compared the numbers.

First, I checked the tax tables, and found that the tax for matching numbers are slightly lower for 2009 than they were for 2008. A single person who had taxable income of $50,000 to $50,050 in 2009 owes $156 less than a person who had the same taxable income in 2008. The personal exemption was raised from $3,500 to $3,650. For those doing their own calculations, the marginal tax rate is the same for 2009 as it was for 2008, but the higher rate kicks in at a higher level. In other words, people whose tax status is unchanged from 2008 to 2009 will pay less in tax this year on their income in 2009 than they paid in 2009 on income from 2008. These numbers apply to taxable income whether from pensions, salaries, wages or fees.

Last year I received a refund of tax withheld, and the taxes withheld last year were less than they were in 2008. From these facts, I must deduce that income taxes will be raised substantially this year, so that most people will pay a higher rate in 2010 than they did in 2009, unless their income is drastically reduced.

This means that The Big O was either lying in his teeth or was making a promise that he would be unable to keep when he pledged no increase in income taxes for working people.

 

[Handley_Page]

A while ago, there was a discussion here4 as to whether or not income taxes to be filed this year for 2009 would be higher than those filed last year on 2008 income. I did not get involved, because I didn't know, and didn't feel like expressing my lack of knowledge.

However, two things have happened recently: I recieved an advisory after my pension check was deposited in the bank, and the taxes withheld were about 10% higher than they had been. A few days later, I received my Schedule 1040 and instructions, so I dug out the instructions and my file copy of the 1040 for last year and compared the numbers.

First, I checked the tax tables, and found that the tax for matching numbers are slightly lower for 2009 than they were for 2008. A single person who had taxable income of $50,000 to $50,050 in 2009 owes $156 less than a person who had the same taxable income in 2008. The personal exemption was raised from $3,500 to $3,650. For those doing their own calculations, the marginal tax rate is the same for 2009 as it was for 2008, but the higher rate kicks in at a higher level. In other words, people whose tax status is unchanged from 2008 to 2009 will pay less in tax this year on their income in 2009 than they paid in 2009 on income from 2008. These numbers apply to taxable income whether from pensions, salaries, wages or fees.

Last year I received a refund of tax withheld, and the taxes withheld last year were less than they were in 2008. From these facts, I must deduce that income taxes will be raised substantially this year, so that most people will pay a higher rate in 2010 than they did in 2009, unless their income is drastically reduced.

This means that The Big O was either lying in his teeth or was making a promise that he would be unable to keep when he pledged no increase in income taxes for working people.

And this is something new ?

 

[voluptuary_manque]

Uh, Box . . . retired doesn't equal working, yanno.

 

[R. Richard]

Truth test for politicians.

If a politician's lips are moving and sound is coming out, the politician is lying.

 

[Jenny_Jackson]

This is a surprise after Big O paid out $1,000,000,000 of YOUR tax dollars to pay off his campaign contributors?

 

[jomar]

Probably the cold meds, but I'm not sure I'm following - do you mean a 10% tax hike for your January 2010 pension check?

 

[Boxlicker101]

Uh, Box . . . retired doesn't equal working, yanno.

I know that, but the tax rates, etc. apply to me the same as to anybody who is working. Barring a change in the tax laws to tax retirement income at a different rate, we can figure that the tax on income received in 2010 will be about ten percent higher than it was for the same amount last year.

Jomar, I did not receive an increase in income. The only increase was in the amount withheld, which was about 10%.

 

[jomar]

Jomar, I did not receive an increase in income. The only increase was in the amount withheld, which was about 10%.

I know, but did you mean an additional 10% withheld for 2010 tax year checks?

 

[Boxlicker101]

Quote:
Originally Posted by Boxlicker101

Jomar, I did not receive an increase in income. The only increase was in the amount withheld, which was about 10%.

I know, but did you mean an additional 10% withheld for 2010 tax year checks?

Yes. The tax that was withheld from the most recent direct deposit was about 10% higher than the tax on the deposit for November. That's why I say that the taxes I willl pay this year will be about that much higher than what I paid last year. I am assuming that I was not singled out and that retired persons were not singled out, and that people will be paying, on average, about 10% more FIT this year.

This despite the solemn promise made by The Big O that taxes would not be raised.

 

[CrimsonMaiden]

All I know about 2009 income tax is that Earned Income Credit went up (as did the # of qualifying children), the Additional Child tax credit went up, and there are some other new credits... so some will end up with larger refunds than they had in 2008.

 

[jomar]

Quote:
Originally Posted by Boxlicker101

Jomar, I did not receive an increase in income. The only increase was in the amount withheld, which was about 10%.




Yes. The tax that was withheld from the most recent direct deposit was about 10% higher than the tax on the deposit for November. That's why I say that the taxes I willl pay this year will be about that much higher than what I paid last year. I am assuming that I was not singled out and that retired persons were not singled out, and that people will be paying, on average, about 10% more FIT this year.

This despite the solemn promise made by The Big O that taxes would not be raised.

Yes, I see what you mean, though it's early yet. Time will tell and I'm keeping my fingers crossed.

 

[Huckleman2000]

This could be the result of the Bush tax cuts, which are set to expire in 2010, aren't they?

 

[Boxlicker101]

This could be the result of the Bush tax cuts, which are set to expire in 2010, aren't they?

Yes. However, they could be renewed. I would consider allowing them to expire to be the same as raising taxes. My wife and I are not even close to being in the "upper income brackets." Our retirement incomes, or our salaries when we were working, would be commensurate with what is usually called "working people."