Monday, July 13, 2009
Obama: "Nobody Wants To Invest in a Place Where the Government Skims Twenty Percent Off The Top."
...And like shit through a goose, the irony is totally lost on our spender-in-chief and his dimwit team of speechwiters.
Labels: Africa, business, Economics, finance, foreign policy, Obama, taxes
Friday, July 03, 2009
So just whom is California paying in cash?
And who is getting IOUs?
Hint: Public employee pensions are getting cash. The legislators are paying themselves cash.
The mentally handicapped? IOUs.
Bastards.
Splash, out
Jason
Hint: Public employee pensions are getting cash. The legislators are paying themselves cash.
The mentally handicapped? IOUs.
Bastards.
Splash, out
Jason
Labels: California, economy, finance, mental health, Politics, taxes
Monday, June 22, 2009
A-dime-per-can tax increase on soda?
Remember when Obama said this?
" if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime."
If Obama doesn't pledge to veto this, then we know what his word is good for, don't we?
Who's behind this? Democrats, of course. Looking out for working families, and all that.
Other possible screwings:
If they add a 3% payroll tax on health insurance, smaller employers will drop their coverage by the thousands. These fools don't understand how group plans and other ancillary benefit packages are sold to small businesses. The agent goes in and shows them how paying compensation in benefits can cost little or nothing once you net in FICA and Medicaid payroll taxes. That's a huge part of the sell, and a huge part of why small business owners provide these benefits.
If Congress destroys that, then employers will simply drop coverage.
Which is, of course, what these cretins want, because that will only increase demand for universal care.
The liberal assault on private enterprise, small business and the middle class continues apace.
Splash, out
Jason
" if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime."
If Obama doesn't pledge to veto this, then we know what his word is good for, don't we?
WASHINGTON (AP) - Early work on the ambitious health care overhaul the Obama administration is seeking has exposed the kinds of in-house fights that typify just how hard it will be to get meaningful legislation this year. Case in point: A proposal to help bankroll universal health coverage with a dime-a-can increase in the price of soft drinks.
Who's behind this? Democrats, of course. Looking out for working families, and all that.
Other possible screwings:
- Increasing the price of soda and other sugary drinks by 10 cents a can.
- Applying a potential 2 percent income tax increase to single taxpayers earning more than $200,000 a year and households earning more than $250,000.
- A new employer payroll tax could target 3 percent of employers' health care expenditures.
- Taxing employer-provided health insurance benefits above certain levels - a less likely option but one that still is in the running..
If they add a 3% payroll tax on health insurance, smaller employers will drop their coverage by the thousands. These fools don't understand how group plans and other ancillary benefit packages are sold to small businesses. The agent goes in and shows them how paying compensation in benefits can cost little or nothing once you net in FICA and Medicaid payroll taxes. That's a huge part of the sell, and a huge part of why small business owners provide these benefits.
If Congress destroys that, then employers will simply drop coverage.
Which is, of course, what these cretins want, because that will only increase demand for universal care.
The liberal assault on private enterprise, small business and the middle class continues apace.
Splash, out
Jason
Labels: business, Democrats, economy, health care, insurance, taxes, The Left
Sunday, May 10, 2009
Buyers' Remorse
From the Daily Telegraph:
A top Obama fundraiser and hedge fund manager said: "I'm appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it's the real world. I'm surprised that Obama is turning out to be so left-wing. He's a real class warrior."
Do they have blanket parties on Wall Street?
A top Obama fundraiser and hedge fund manager said: "I'm appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it's the real world. I'm surprised that Obama is turning out to be so left-wing. He's a real class warrior."
Do they have blanket parties on Wall Street?
Friday, April 03, 2009
DENIED: Senate Committee Protects Women, Children, Poor and Disabled from Obama's Predations
Obama's plan to limit charitable deductions was strangled in the crib, as it should be.
No shit.
Unanimous, baby!
Splash, out
Jason
The U.S. Senate rejected a proposal by President Barack Obama to finance an overhaul of the nation’s health-care system by limiting the ability of the well-to-do to take tax deductions for charitable contributions.
The chamber unanimously approved an amendment to a pending budget plan that rejects the proposal to limit the size of itemized deductions that can be taken by those earning more than $250,000.
Obama proposed using the estimated $318 billion such a change would generate to help finance a health-care overhaul, which he says will cost at least $630 billion. Lawmakers said they feared the effect of such a tax change on charities.
No shit.
Unanimous, baby!
Splash, out
Jason
Labels: charities, Obama, stupid, taxes
Wednesday, April 01, 2009
Tax Tip for Military Families
Alright, troops, listen up!
Been deployed to a hostile fire zone for part of the last year? Did you qualify for the combat zone income tax exclusion?
If so, then check out the W-2 you get from Uncle Sam. You can do that on MyPay. Chances are pretty good your adjusted gross income is artificially low. Yeah, you got paid for the duty. But your TAXABLE wages are artificially low for being in a combat zone.
That being the case, you may be able to qualify for the Saver's Credit.
That means the government will give you free money (in the form of a tax credit) for saving for retirement.
From the IRS's Web site:
Restrictions:
You gotta be 18.
You can't be a full-time student.
You can't be a dependent on someone else's tax return.
How do you claim it? Follow the instructions on IRS Form 8880
Yes, the Thrift Savings Program qualifies, as do Roth IRAs, IRAs, SIMPLEs, 401(k)s and 403(b)s.
Of these, I would usually steer troops toward the Roth IRA for this purpose. Why? Because the other plans are all tax-DEFERRED. But with the combat zone income tax exclusion, you're effectively contributing with pre-tax dollars anyway. But the Roth IRA grows tax-FREE, with TAX FREE distributions in retirement, and none of those pesky Required Minimum Distributions the government requires you to take when you get older. (Yeah, most of you aren't worried about those now, but trust me. You will be, and you will hate them.)
With a Roth IRA (or a Roth 401(k) if your employer offers one), you get the FULL benefit of the combat zone tax exclusion, thus contributing with tax-free dollars. Your money compounds tax free. Tax-free income in retirement. (The government thinks you paid taxes on money going in. But since you were in a combat zone, you didn't.)
Combat veterans thus have the opportunity to take advantage of the most tax-advantaged retirement program the tax code allows. And the Savers' Credit just sweetens the deal with some free money from Uncle Sam.
(Aww. the gang at Military.com hasn't picked up on the story yet. Kids, don't try this at home.)
(Caveat: If your employer matches your contribution in a SIMPLE or 401(k), you may want to contribute enough to snag the free matching money. Plans vary, so your mileage may vary as well.)
Now, to kick the whole thing into overdrive: Do you own a small business? Follow the instructions on IRS Form 8881. The Government will give you free money - in the form of a tax credit of up to $500 dollars, tp start up a qualified retirement plan (provided it also covers at least one non-highly compensated employee.
Splash, out
Jason
Been deployed to a hostile fire zone for part of the last year? Did you qualify for the combat zone income tax exclusion?
If so, then check out the W-2 you get from Uncle Sam. You can do that on MyPay. Chances are pretty good your adjusted gross income is artificially low. Yeah, you got paid for the duty. But your TAXABLE wages are artificially low for being in a combat zone.
That being the case, you may be able to qualify for the Saver's Credit.
That means the government will give you free money (in the form of a tax credit) for saving for retirement.
From the IRS's Web site:
The saver’s credit can be claimed by:
Married couples filing jointly with incomes up to $53,000 in 2008 or $55,500 in 2009;
Heads of Household with incomes up to $39,750 in 2008 or $41,625 in 2009; and
Married individuals filing separately and singles with incomes up to $26,500 in 2008 or $27,750 in 2009.
Restrictions:
You gotta be 18.
You can't be a full-time student.
You can't be a dependent on someone else's tax return.
How do you claim it? Follow the instructions on IRS Form 8880
Yes, the Thrift Savings Program qualifies, as do Roth IRAs, IRAs, SIMPLEs, 401(k)s and 403(b)s.
Of these, I would usually steer troops toward the Roth IRA for this purpose. Why? Because the other plans are all tax-DEFERRED. But with the combat zone income tax exclusion, you're effectively contributing with pre-tax dollars anyway. But the Roth IRA grows tax-FREE, with TAX FREE distributions in retirement, and none of those pesky Required Minimum Distributions the government requires you to take when you get older. (Yeah, most of you aren't worried about those now, but trust me. You will be, and you will hate them.)
With a Roth IRA (or a Roth 401(k) if your employer offers one), you get the FULL benefit of the combat zone tax exclusion, thus contributing with tax-free dollars. Your money compounds tax free. Tax-free income in retirement. (The government thinks you paid taxes on money going in. But since you were in a combat zone, you didn't.)
Combat veterans thus have the opportunity to take advantage of the most tax-advantaged retirement program the tax code allows. And the Savers' Credit just sweetens the deal with some free money from Uncle Sam.
(Aww. the gang at Military.com hasn't picked up on the story yet. Kids, don't try this at home.)
(Caveat: If your employer matches your contribution in a SIMPLE or 401(k), you may want to contribute enough to snag the free matching money. Plans vary, so your mileage may vary as well.)
Now, to kick the whole thing into overdrive: Do you own a small business? Follow the instructions on IRS Form 8881. The Government will give you free money - in the form of a tax credit of up to $500 dollars, tp start up a qualified retirement plan (provided it also covers at least one non-highly compensated employee.
Splash, out
Jason
Labels: finance, investing, soldiers' issues, taxes
Wednesday, March 25, 2009
Obama to Special Olympics: Drop Dead
The One is sticking to his guns on limiting the deduction for charitable donations - essentially sticking a finger into the eye of the donor base.
Breathtaking.
The Ego-in-Chief is essentially saying he knows better than the charities themselves how to raise money and how they will be affected by his tax increase on their donor base. He's saying he knows the charity large donor bases better than the charity fund raisers who know their largest donors personally.
What the EiC apparently hasn't figured out is that although that provision affects about 1 percent of the American people, that 1 percent of donors represents a HELL of a lot more than 1 percent of charitable donations.
The difference comes directly out of much needed programs for the widows, orphans, the poor, the environment, and a whole host of causes... and yes, the Special Olympics.
Atlas to EiC: I'm getting some mighty twitchy shoulder muscles, if you know what I'm saying.
Splash, out
Jason
(It's gonna be a busy for years for the 'stupid' tag, I'm afraid.)
QUESTION: Mr. President, are you -- thank you. Thank you, Mr. President. Are you reconsidering your plan to cut the interest rate deduction for mortgages and for charities? And do you regret having proposed that in the first place?
OBAMA: No, I think it's -- I think it's the right thing to do, where we've got to make some difficult choices. Here's what we did with respect to tax policy.
What we said was that, over the last decade, the average worker, the average family have seen their wages and incomes flat. Even in times where supposedly we were in the middle of an economic boom, as a practical matter, their incomes didn't go up. And so, well, we said, "Let's give them a tax cut. Let's give them some relief, some help, 95 percent of American families."
Now, for the top 5 percent, they're the ones who typically saw huge gains in their income. I -- I fall in that category. And what we've said is, for those folks, let's not renew the Bush tax cuts, so let's go back to the rates that existed back in -- during the Clinton era, when wealthy people were still wealthy and doing just fine, and let's look at the -- the level at which people can itemize their deductions.
And what we've said is: Let's go back to the rate that existed under Ronald Reagan. People are still going to be able to make charitable contributions. It just means, if you give $100 and you're in this tax bracket, at a certain point, instead of being able to write off 36 percent or 39 percent, you're writing off 28 percent.
Now, if it's really a charitable contribution, I'm assuming that that shouldn't be the determining factor as to whether you're giving that $100 to the homeless shelter down the street.
And so this provision would affect about 1 percent of the American people. They would still get deductions. It's just that they wouldn't be able to write off 39 percent.
In that sense, what it would do is it would equalize -- when I give $100, I'd get the same amount of deduction as when some -- a bus driver who's making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent -- he gets to write off 28 percent. I get to write off 39 percent. I don't think that's fair.
So I think this was a good idea. I think it is a realistic way for us to raise some revenue from people who've benefited enormously over the last several years.
Breathtaking.
The Ego-in-Chief is essentially saying he knows better than the charities themselves how to raise money and how they will be affected by his tax increase on their donor base. He's saying he knows the charity large donor bases better than the charity fund raisers who know their largest donors personally.
What the EiC apparently hasn't figured out is that although that provision affects about 1 percent of the American people, that 1 percent of donors represents a HELL of a lot more than 1 percent of charitable donations.
The difference comes directly out of much needed programs for the widows, orphans, the poor, the environment, and a whole host of causes... and yes, the Special Olympics.
Atlas to EiC: I'm getting some mighty twitchy shoulder muscles, if you know what I'm saying.
Splash, out
Jason
(It's gonna be a busy for years for the 'stupid' tag, I'm afraid.)
Labels: economy, Obama, stupid, taxes
Friday, March 13, 2009
Capital moves to where it is treated best.
Unfortunately, thanks to Obamapelosipalooza, that isn't here anymore.
Must be part of that "change" thing I kept hearing about during the campaign.
More:
The fungibility and portability of capital is news to libtards, who are probably scratching their heads over this one.
Splash, out
Jason
The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.
Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.
Must be part of that "change" thing I kept hearing about during the campaign.
More:
Swiss cantons are free to set their own tax rates. For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland. That compares with an average global corporate tax rate of 25.9 percent, according to consultancy KPMG.
"One trend that we see is that particularly Bermuda-based companies are now moving to Switzerland," said Martin Frey, a partner at law company Baker & McKenzie. "That may only partly be obviously for tax reasons, but also for security reasons and the fact that the Obama administration may go after them."
The fungibility and portability of capital is news to libtards, who are probably scratching their heads over this one.
Splash, out
Jason
Labels: economy, Obama, stupid, taxes
Monday, March 02, 2009
The lie of the day (UPDATE/CORRECTION)
UPDATE/CORRECTION: Reader Dan points out an error I made in writing this post earlier. I thought of it, too, driving around today, but couldn't get back to a computer in time to amend.
The error is this: Taxable distributions represent capital gains to the fund, but are taxed as income to the fund shareholder, not as capital gains. If the Bush tax cuts expire, the point still stands, because Bush cut taxes for all income levels - not just the top brackets. Obama has stated that he supports limiting tax increases to those making over a certain amount. We'll see what actually gets passed and signed into law.
Original post follows, as written.
...............................................
Obama would like to increase capital gains taxes on anyone making more than 250,000 dollars per year.
So who would that affect? ANYONE who holds mutual funds outside of a qualified plan.
That's not just going to screw the rich. That's going to hurt any diligent saver who invests excess capital in mutual funds.
Why? Because when a mutual fund sells a holding at a gain, that constitutes a taxable event, which they then pass on to shareholders in the form of taxable distributions. Mutual fund shareholders at all income levels are on the hook for this tax, and short of selling their shares (at a captal gain/loss), there is nothing they can do to avoid it, if they own the stocks at the time the distribution happens.
Once again, when Obama targets the rich, he winds up hurting the little guy. (News flash: The rich are in life insurance, annuities, and managed accounts, not mutual funds.)
To add insult to injury, if you bought into a mutual fund high, and the fund had redemptions going into the bear market of the last year, forcing it to sell stocks it had held for a long time, you could eat a taxable exemption, get handed a nasty tax bill, and have to pay taxes ON A FUND THAT LOST YOU MONEY!
Splash, out
The error is this: Taxable distributions represent capital gains to the fund, but are taxed as income to the fund shareholder, not as capital gains. If the Bush tax cuts expire, the point still stands, because Bush cut taxes for all income levels - not just the top brackets. Obama has stated that he supports limiting tax increases to those making over a certain amount. We'll see what actually gets passed and signed into law.
Original post follows, as written.
...............................................
Obama would like to increase capital gains taxes on anyone making more than 250,000 dollars per year.
So who would that affect? ANYONE who holds mutual funds outside of a qualified plan.
That's not just going to screw the rich. That's going to hurt any diligent saver who invests excess capital in mutual funds.
Why? Because when a mutual fund sells a holding at a gain, that constitutes a taxable event, which they then pass on to shareholders in the form of taxable distributions. Mutual fund shareholders at all income levels are on the hook for this tax, and short of selling their shares (at a captal gain/loss), there is nothing they can do to avoid it, if they own the stocks at the time the distribution happens.
Once again, when Obama targets the rich, he winds up hurting the little guy. (News flash: The rich are in life insurance, annuities, and managed accounts, not mutual funds.)
To add insult to injury, if you bought into a mutual fund high, and the fund had redemptions going into the bear market of the last year, forcing it to sell stocks it had held for a long time, you could eat a taxable exemption, get handed a nasty tax bill, and have to pay taxes ON A FUND THAT LOST YOU MONEY!
Splash, out
Labels: economy, finance, investing, taxes
Friday, February 27, 2009
Obama to widows, orphans, the poor and the handicapped:
"Drop dead."
Just when I think the Obama Administration has done the dumbest thing imaginable, they come up with something even dumber.
Many charities rely on just a few large donors for a substantial portion of their cash flows. These donors have large pockets, of course, and are generally wealthy.
The Obama proposal, if the Washington Times' characterization is accurate, is a dagger pointed straight at the United Way, Boys and Girls Clubs of America, Ronald McDonald House, the Red Cross, Catholic Charities, and every other large charity you'd care to name, local or national.
The wealthy will not be hurt by this. The wealthy can simply find something else to do with their money. The people hurt by this are precisely the people who rely on these charities, and their low-paid staff.
Splash, out
Jason
Still, the charitable giving deduction reduction, which would limit deductions for couples making $250,000 or individuals making $200,000, provoked the most heat Thursday. Mr. Obama is counting on that provision to raise $179.8 billion over 10 years.
Just when I think the Obama Administration has done the dumbest thing imaginable, they come up with something even dumber.
Many charities rely on just a few large donors for a substantial portion of their cash flows. These donors have large pockets, of course, and are generally wealthy.
The Obama proposal, if the Washington Times' characterization is accurate, is a dagger pointed straight at the United Way, Boys and Girls Clubs of America, Ronald McDonald House, the Red Cross, Catholic Charities, and every other large charity you'd care to name, local or national.
The wealthy will not be hurt by this. The wealthy can simply find something else to do with their money. The people hurt by this are precisely the people who rely on these charities, and their low-paid staff.
Splash, out
Jason
Labels: Democrats, economy, finance, Obama, stupid, taxes, The Left
Tuesday, February 03, 2009
Riddle me this, peoples!
Why is it that Tom Daschle can simply blow off paying taxes on his car to the tune of nearly a hundred thousand dollars $128,000 and nobody catches it until he's nominated for a cabinet position, but Nancy Killefer, Obama's choice for performance czar and overall shooter of the wounded gets slammed with a tax lien for less than a grand (for failing to pay unemployment insurance on household help.)
Unlike Tom Daschle, who had to be bitch-slapped into compliance, Killefer took care of her tax debt on her own, years ago.
And out she goes.
Obama still stands behind Daschle, who doesn't have the grace or honor to step aside for the good of the Administration.
Killefer gets thrown under the bus.
Sorry, Ms. Killefer. The country could have used your services.
Mr. Daschle? Not so much.
Splash, out
Jason
Unlike Tom Daschle, who had to be bitch-slapped into compliance, Killefer took care of her tax debt on her own, years ago.
And out she goes.
Obama still stands behind Daschle, who doesn't have the grace or honor to step aside for the good of the Administration.
Killefer gets thrown under the bus.
Sorry, Ms. Killefer. The country could have used your services.
Mr. Daschle? Not so much.
Splash, out
Jason
Labels: Obama, Politics, taxes
Thursday, January 22, 2009
Nannies and Taxes Derailed Carolyn Kennedy's anointing to the Senate.
Thank God.
Why are libtards so keen on raising taxes on everything in sight; yet so keen on not paying them themselves?
This part's hilarious:
So the Governor demonstrates a firm grasp of the obvious: That Kennedy is an empty suit, and her elevation to the Senate would make a laughing stock of Democrat politics (not that that has ever stopped them before), and yet the flying monkeys in the Kennedy camp manage to ignore the Nanny problem and the tax problem and insist that yes, the Gov IS, TOO, GONNA PICK CAROLYN KENNEDY!!!!!(paynoattentiontowhatthegovernor'sofficeisactuallysaying).
(either they are lying about their knowledge of the issue, or Kennedy lied to them and they're, umm, ok with that).
More:
Translation: The Democratic party is run by a bunch of 14-year-old girls who hate each other's guts.
Democrats. They'd be funny if they didn't have so much power.
Why are libtards so keen on raising taxes on everything in sight; yet so keen on not paying them themselves?
This part's hilarious:
Hard feelings toward Ms. Kennedy were clearly building among the governor’s staff on Thursday, after a dramatic evening in which she was reported to be dropping out, then wavering, then ultimately, shortly after midnight on Thursday, issuing a statement ending her candidacy.
The person close to the governor said Mr. Paterson “never had any intention of picking Kennedy” because he had come to consider her unready for the job. The person did not describe the exact nature or seriousness of the tax and household employee issues.
But other Democratic operatives and people who talked to the governor disputed that account, and said that he had all but decided to select Ms. Kennedy as senator, and that his staff was arranging a press conference for late this week.
So the Governor demonstrates a firm grasp of the obvious: That Kennedy is an empty suit, and her elevation to the Senate would make a laughing stock of Democrat politics (not that that has ever stopped them before), and yet the flying monkeys in the Kennedy camp manage to ignore the Nanny problem and the tax problem and insist that yes, the Gov IS, TOO, GONNA PICK CAROLYN KENNEDY!!!!!(paynoattentiontowhatthegovernor'sofficeisactuallysaying).
(either they are lying about their knowledge of the issue, or Kennedy lied to them and they're, umm, ok with that).
More:
Several people who have spoken to the governor said he had decided on Ms. Kennedy some time ago. A Democrat operative with ties to Mr. Paterson said the governor told Ms. Kennedy last week that she was the choice, but that he would use the next few days to do “a little misdirection to keep the suspense up.”
A person close to the governor adamantly denied that assertion.
“The fiasco of the last 24 hours reinforced why the governor never intended to choose her,” the person said.
Translation: The Democratic party is run by a bunch of 14-year-old girls who hate each other's guts.
Democrats. They'd be funny if they didn't have so much power.
Labels: Democrats, Politics, taxes, The Left
Wednesday, October 29, 2008
Tax tip for military families
I just came across this little gem:
Now, I say this with a bit of a caveat:
In my opinion, most military people would be better off funding a Roth IRA, if they're otherwise eligible, rather than a traditional IRA, which is the account this particular paragraph refers to.
Why?
Simple. Think of it this way: A regular or traditional IRA (I'll call them "T-IRAs for short) lets people take a tax deduction now, but forces them (or their heirs) to pay full-boat income tax when they retire. Secondarily, there are very complex and draconian requirements T-IRA owners have to follow which tell them when and how they have to take distributions...that is, receive income from the IRA.
A Roth IRA is the reverse: They pays theys' thar taxes NOW, but if they can leave the money alone until retirement, (with certain exceptions), they never have to pays thar taxes on it again EVAR!. And if a family inherits it, they can stretch out that IRA a lot longer and not have to swallow a huge income tax bill in the first five years like the families that inherit a T-IRA.
So the calculation is if you think your taxes will be higher in the future than they are now, you want a Roth. If you think your family will inherit a balance (I.e., you're a smoker, a diabetic, a skydiver, or are otherwise playing fast and loose with the standard mortality tables) you want your family to inherit a Roth, as well, rather than a traditional IRA. The IRS is hungry, and THEY WANT THAT TAX REVENUE that you deducted when you first made the T-IRA contributions, and they WILL go after your heirs to get it, and they WILL go after you if you don't take distributions according to their schedule!
Clear as mud?
Now, consider that if you drew significant non-taxable combat pay, your AGI is artificially low. Which means so is your tax bill, and probably your tax bracket.
So since your tax bracket is artificially low that year, chances are that that serviceman or woman will want to use the Roth, pay that artificially low tax, and never have to worry about getting screwed by the IRS in retirement. In essence, a military person who drew mostly combat pay in that year is funding his or her retirement account with tax free dollars - and taking it out, tax free as well. (Investment returns after fees being equal, this kicks the shit out of the Thrift Savings Program for the military, which will force you to pay full boat income tax in retirment.)
Tax wise, it's the best investment structure going!
Now, this is where it gets tricky: There's no guarantee you can qualify. Your income limits may still screw you out of the IRA or the Roth IRA, if you had significant nonmilitary income, or if your spouse works, earns decent money in the civilian world and you filed jointly. And if you blow the income limits and try to contribute anyway, the IRS WILL hunt you and your family down with an axe. Well, you'll pay a modest penalty at least.
Sit down with a tax professional and see how the above applies to your specific situation. Countercolumn does not give tax advice.
But don't expect your tax preparer to be conversant with rules as they apply to military members. Most garden variety tax preparers can barely spell IRS. You need to go in and be able to show them the regs. In this case, IRS Publication 590.
Splash, out
Jason
If you were a member of the U.S. Armed Forces, compensation includes any nontaxable combat pay you received. This amount should be reported in box 12 of your 2007 Form W-2 with code Q.
If you received nontaxable combat pay in 2004 or 2005, and the treatment of the combat pay as compensation means that you can contribute more for those years than you already have, you can make additional contributions to an IRA for 2004 or 2005 by May 28, 2009. The contributions will be treated as having been made on the last day of the year you designate. If you have already filed your return for a year for which you make a contribution, you must file Form 1040X, Amended U.S. Individual Income Tax Return, by the latest of:
3 years from the date you filed your original return for the year for which you made the contribution,
2 years from the date you paid the tax due for the year for which you made the contribution, or
1 year from the date on which you made the contribution.
Now, I say this with a bit of a caveat:
In my opinion, most military people would be better off funding a Roth IRA, if they're otherwise eligible, rather than a traditional IRA, which is the account this particular paragraph refers to.
Why?
Simple. Think of it this way: A regular or traditional IRA (I'll call them "T-IRAs for short) lets people take a tax deduction now, but forces them (or their heirs) to pay full-boat income tax when they retire. Secondarily, there are very complex and draconian requirements T-IRA owners have to follow which tell them when and how they have to take distributions...that is, receive income from the IRA.
A Roth IRA is the reverse: They pays theys' thar taxes NOW, but if they can leave the money alone until retirement, (with certain exceptions), they never have to pays thar taxes on it again EVAR!. And if a family inherits it, they can stretch out that IRA a lot longer and not have to swallow a huge income tax bill in the first five years like the families that inherit a T-IRA.
So the calculation is if you think your taxes will be higher in the future than they are now, you want a Roth. If you think your family will inherit a balance (I.e., you're a smoker, a diabetic, a skydiver, or are otherwise playing fast and loose with the standard mortality tables) you want your family to inherit a Roth, as well, rather than a traditional IRA. The IRS is hungry, and THEY WANT THAT TAX REVENUE that you deducted when you first made the T-IRA contributions, and they WILL go after your heirs to get it, and they WILL go after you if you don't take distributions according to their schedule!
Clear as mud?
Now, consider that if you drew significant non-taxable combat pay, your AGI is artificially low. Which means so is your tax bill, and probably your tax bracket.
So since your tax bracket is artificially low that year, chances are that that serviceman or woman will want to use the Roth, pay that artificially low tax, and never have to worry about getting screwed by the IRS in retirement. In essence, a military person who drew mostly combat pay in that year is funding his or her retirement account with tax free dollars - and taking it out, tax free as well. (Investment returns after fees being equal, this kicks the shit out of the Thrift Savings Program for the military, which will force you to pay full boat income tax in retirment.)
Tax wise, it's the best investment structure going!
Now, this is where it gets tricky: There's no guarantee you can qualify. Your income limits may still screw you out of the IRA or the Roth IRA, if you had significant nonmilitary income, or if your spouse works, earns decent money in the civilian world and you filed jointly. And if you blow the income limits and try to contribute anyway, the IRS WILL hunt you and your family down with an axe. Well, you'll pay a modest penalty at least.
Sit down with a tax professional and see how the above applies to your specific situation. Countercolumn does not give tax advice.
But don't expect your tax preparer to be conversant with rules as they apply to military members. Most garden variety tax preparers can barely spell IRS. You need to go in and be able to show them the regs. In this case, IRS Publication 590.
Splash, out
Jason
Labels: finance, reserve issues, retirement, soldiers' issues, taxes
Friday, September 19, 2008
Estate Tax fallout
One bit of fallout from the recent rash of federal outlays: I think we can kiss goodbye any hopes that the estate tax exemption is going to remain at $2 million. That sucker is back down to $500,000 if Obama wins, before you can say "Patriotic."
And if McCain wins, that's going to be the first bone he throws to a likely Dem congress in order to get even a smidgeon of his agenda passed. Either way, I think it's very unlikely you can bank on a continued $2 million estate tax exemption.
So what does this mean?
Well, like the AMT, it's going to have a disproportionate effect on the blue states...property values in red states (Florida and Arizona excepted) did not inflate as much as properties along the coasts. So to an extent, it's a poison pill for the Dems. But a lot more people are going to need to look long and hard at how their assets are going to be passed on to the next generation.
Incidentally, the increased estate tax burden is going to fall disproportionately on another Democrat constituency: same-sex couples. Why? Because married couples enjoy an unlimited estate tax exemption to the surving spouse. Unless a same-sex couple is legally married, though, even a will is not going to help. Andy Sullivan's long-time companion can pass away (BECAUSE HE WANTS TO!!!!) and even if they own a house jointly that puts them over the 500k exemption, Sully's going to have to find some way to raise enough cash to cover an amount equal to up to 47% of the estate's value over and above the $500k exemption.
It's going to be great for insurance salespeople, of course, since the time-honored way to pay for the estate tax without having to liquidate assets (like a home) is to take out a life insurance policy sufficient to cover the estate tax. The number of people with a new life insurance need is far, FAR higher with an estate tax exemption of $500,000 than it is with an exemption of $2,000,000. Further, I would posit that at the lower exemption amount, the chief asset that will need to be sold to make the exemption is going to be the family home. This is a much bigger deal at a 500k exemption than at the 2 million level, because in many cases, a much larger chunk of the exemption is likely to be the one asset that is most difficult and painful to liquidate in time to pay the estate tax: the home.
Look for a jump in life insurance sales (to cover the increased estate tax liability), annuities (to get money OUT of the estate and convert it to income), and reverse mortgages (to get the house out of the estate).
Now, this is going to be a painful effect for the upper middle class, because they will be forced to weigh the desire to keep a home in the family against the need for retirement income - and they've undersaved to begin with.
I wouldn't rely on pensions for a lot of them. And, quite frankly, unless they've done a terrific job planning ahead, the life insurance premiums it is going to take to cover, say, $300,000 to $1.5 million in increased estate tax liability is not going to be affordable for people in their 50s and 60s, let's say, whose chief asset is in their home, which is not readily convertible to cash to pay a premium.
And this is not even including the cost of providing for their own long-term or nursing home care.
The libtards think they can "soak the rich" by lowering that estate tax exemption back down to $500,000 from $2 million.
I'm here to tell you... they have a funny idea of what "rich" means. The more I learn about family finances, the more I see that this is a pretty ugly development for an awful lot of families.
Splash, out
Jason
And if McCain wins, that's going to be the first bone he throws to a likely Dem congress in order to get even a smidgeon of his agenda passed. Either way, I think it's very unlikely you can bank on a continued $2 million estate tax exemption.
So what does this mean?
Well, like the AMT, it's going to have a disproportionate effect on the blue states...property values in red states (Florida and Arizona excepted) did not inflate as much as properties along the coasts. So to an extent, it's a poison pill for the Dems. But a lot more people are going to need to look long and hard at how their assets are going to be passed on to the next generation.
Incidentally, the increased estate tax burden is going to fall disproportionately on another Democrat constituency: same-sex couples. Why? Because married couples enjoy an unlimited estate tax exemption to the surving spouse. Unless a same-sex couple is legally married, though, even a will is not going to help. Andy Sullivan's long-time companion can pass away (BECAUSE HE WANTS TO!!!!) and even if they own a house jointly that puts them over the 500k exemption, Sully's going to have to find some way to raise enough cash to cover an amount equal to up to 47% of the estate's value over and above the $500k exemption.
It's going to be great for insurance salespeople, of course, since the time-honored way to pay for the estate tax without having to liquidate assets (like a home) is to take out a life insurance policy sufficient to cover the estate tax. The number of people with a new life insurance need is far, FAR higher with an estate tax exemption of $500,000 than it is with an exemption of $2,000,000. Further, I would posit that at the lower exemption amount, the chief asset that will need to be sold to make the exemption is going to be the family home. This is a much bigger deal at a 500k exemption than at the 2 million level, because in many cases, a much larger chunk of the exemption is likely to be the one asset that is most difficult and painful to liquidate in time to pay the estate tax: the home.
Look for a jump in life insurance sales (to cover the increased estate tax liability), annuities (to get money OUT of the estate and convert it to income), and reverse mortgages (to get the house out of the estate).
Now, this is going to be a painful effect for the upper middle class, because they will be forced to weigh the desire to keep a home in the family against the need for retirement income - and they've undersaved to begin with.
I wouldn't rely on pensions for a lot of them. And, quite frankly, unless they've done a terrific job planning ahead, the life insurance premiums it is going to take to cover, say, $300,000 to $1.5 million in increased estate tax liability is not going to be affordable for people in their 50s and 60s, let's say, whose chief asset is in their home, which is not readily convertible to cash to pay a premium.
And this is not even including the cost of providing for their own long-term or nursing home care.
The libtards think they can "soak the rich" by lowering that estate tax exemption back down to $500,000 from $2 million.
I'm here to tell you... they have a funny idea of what "rich" means. The more I learn about family finances, the more I see that this is a pretty ugly development for an awful lot of families.
Splash, out
Jason
Labels: finance, insurance, investing, Real Estate, taxes, The Left
Friday, September 12, 2008
Democrats don't care about poor people!
John McCain gave over 27% of his income to charity in 06-07.
Obama gave 5.8% and 6.1% in those two years.
Hmmm. 27 to 6. Sounds like Koufax's Win/Loss record in his hall of fame prime!
McCain might not be able to type well. But he knows how to write a check!
As for Biden: He gave three tenths of one percent.
Wow. I don't think Palin's released her figures yet, but all she has to do is tithe, and she will be body-slamming Obama...while raising four children, on less money!
Biden isn't going to want to show his face. "Stand up, Chuck!" ROFL!
Splash, out
Jason
ADDED: Plus, I'd weight what a conservative gives to charity a lot more than what a libtard gives. If a conservative does charitable giving, it will go to feed the hungry, teach people to read, it will go to the Scouts, to Little League, the Red Cross, or other worthy causes.
When a libtard gives to a charity, it's more likely going to PETA or some damned tree-hugging outfit dedicated to saving dolphins from becoming sushi.
Obama gave 5.8% and 6.1% in those two years.
Hmmm. 27 to 6. Sounds like Koufax's Win/Loss record in his hall of fame prime!
McCain might not be able to type well. But he knows how to write a check!
As for Biden: He gave three tenths of one percent.
Wow. I don't think Palin's released her figures yet, but all she has to do is tithe, and she will be body-slamming Obama...while raising four children, on less money!
Biden isn't going to want to show his face. "Stand up, Chuck!" ROFL!
Splash, out
Jason
ADDED: Plus, I'd weight what a conservative gives to charity a lot more than what a libtard gives. If a conservative does charitable giving, it will go to feed the hungry, teach people to read, it will go to the Scouts, to Little League, the Red Cross, or other worthy causes.
When a libtard gives to a charity, it's more likely going to PETA or some damned tree-hugging outfit dedicated to saving dolphins from becoming sushi.
Labels: Biden, McCain, Obama, Palin, Politics, taxes
Sunday, May 11, 2008
Idiot Moron Libtards at Crooks and Liars will believe anything
And apparently, so does the editorial staff of the Colorado Springs Gazette:
By: Nicole Belle on Saturday, May 10th, 2008 at 5:30 PM - PDT
C&Ler “Z” sent this link to a letter to the editor of the Colorado Springs Gazette:
SUPPORT THE TROOPS
Many soldiers missing out on Bush’s stimulus checks
In August 2006 the 10th Mountain Division, 2nd BCT, 1-89 Cavalry was sent to Iraq for 12 months. In April 2007, the troops were told the Army was adding three additional months to their time in country.
In November 2007 the troopers of 1-89 arrived back in New York from their tour. They are now being told by the IRS, via the IRS Web site, that they haven’t earned enough money to qualify for the economic stimulus check.
Only problem with that one: It's a lie, Nicole.
From the IRS's Web page:
Liberal and stupid is no way to go through life, Nicole. Here's a hint: Don't believe letters to the editor. Especially about taxes.
Splash, out
Jason
By: Nicole Belle on Saturday, May 10th, 2008 at 5:30 PM - PDT
C&Ler “Z” sent this link to a letter to the editor of the Colorado Springs Gazette:
SUPPORT THE TROOPS
Many soldiers missing out on Bush’s stimulus checks
In August 2006 the 10th Mountain Division, 2nd BCT, 1-89 Cavalry was sent to Iraq for 12 months. In April 2007, the troops were told the Army was adding three additional months to their time in country.
In November 2007 the troopers of 1-89 arrived back in New York from their tour. They are now being told by the IRS, via the IRS Web site, that they haven’t earned enough money to qualify for the economic stimulus check.
Only problem with that one: It's a lie, Nicole.
From the IRS's Web page:
For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard and National Guard are also included, but not the U.S. Merchant Marine or the American Red Cross.
Normally, combat pay is not counted as income and is not taxable. For the purposes of receiving an economic stimulus payment, however, military personnel serving in combat zones have the option of including their nontaxable combat pay on their 2007 or 2008 income tax returns if it helps their eligibility for the 2008 economic stimulus payments.
To receive the stimulus payment this year, combat zone personnel or their spouses must file a 2007 income tax return by Oct. 15. Otherwise, they can claim the economic stimulus payment on next year’s income tax return.
Military personnel who normally would not file an income tax return because their 2007 income is not taxable can file a simple Form 1040A with the IRS if they want to receive the economic stimulus payment. They should report their nontaxable combat pay on Line 40b of the Form 1040A to show at least $3,000 in qualifying income. The Department of Defense lists the amount of excluded combat pay, along with the designation, “Code Q,” in Box 12 of Forms W-2.
Liberal and stupid is no way to go through life, Nicole. Here's a hint: Don't believe letters to the editor. Especially about taxes.
Splash, out
Jason
Labels: finance, soldiers' issues, taxes, The Left
