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  • Anybody doing taxes yet?

    I've been a bit of a stranger lately since I decided to do my 2008 taxes now and not get hit in April with a double tax month (2008 annual and 2009 first quarter)...

    .50 cents per mile for the work truck This saved my A$$!

    Started an IRA in case I had to stash some money to lower my taxable income ( I was afraid I was going to be on the low end of a higher bracket).

    I'm less intimidated now that they are done and I have a better understanding of the tax system (It's still dumb though)

    Not sure there are to many of you guys that do your own taxes still but your years of wisdom and your wordly knowledge is always appreciated...

    Okie

  • #2
    Re: Anybody doing taxes yet?

    i have ALL of my paperwork ready to goto the CPA nest week. it's easier for me to let someone else deal with it and avoid any SNAFUs.

    i want to get it done now and not later. postponing doesn't make it any easier

    steve
    In the never ending struggle to keep the water flowing.... The Poo Poo Cowboy rides again!!!

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    • #3
      Re: Anybody doing taxes yet?

      Originally posted by OkieBill View Post
      I've been a bit of a stranger lately since I decided to do my 2008 taxes now and not get hit in April with a double tax month (2008 annual and 2009 first quarter)...

      .50 cents per mile for the work truck This saved my A$$!

      Started an IRA in case I had to stash some money to lower my taxable income ( I was afraid I was going to be on the low end of a higher bracket).

      I'm less intimidated now that they are done and I have a better understanding of the tax system (It's still dumb though)

      Not sure there are to many of you guys that do your own taxes still but your years of wisdom and your wordly knowledge is always appreciated...

      Okie


      Is there software for doing a small C-Corp?.....I really hate this part of the year because of doing taxes.....I have to pay a CPA also, bummer.
      sigpic

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      • #4
        Re: Anybody doing taxes yet?

        I think im getting sick

        I pay on the last day

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        • #5
          Re: Anybody doing taxes yet?

          Originally posted by OkieBill View Post
          ( I was afraid I was going to be on the low end of a higher bracket).
          Why would that matter? Only a tiny bit of your income would get taxed at the higher rate.

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          • #6
            Re: Anybody doing taxes yet?

            This thread should probably be moved to the "business discussion" section.
            I hired a CPA recently too. He does my taxes better than I can, gives me advice on how to save money, and best of all he handles a lot of the book-keeping now! Saves me hours of time.
            Water Heater Reviews & Water Heater Information

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            • #7
              Re: Anybody doing taxes yet?

              Originally posted by cpw View Post
              Why would that matter? Only a tiny bit of your income would get taxed at the higher rate.
              Yeah, a lot of people don't understand how tax brackets work. Only the portion of income that falls in the bracket is taxed at that level. So, if you make $5,000 over a certain bracket in taxable income, only the last $5000 will be taxed in the higher bracket, the rest of your income will be taxed at the lower bracket. I was trying to explain that to people during the election, so they would better understand the tax plans of the candidates.
              Water Heater Reviews & Water Heater Information

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              • #8
                Re: Anybody doing taxes yet?

                Originally posted by cpw View Post
                Why would that matter? Only a tiny bit of your income would get taxed at the higher rate.

                IRA is being used to lower the taxable income (pretax)... It can make the difference between owing money and not having to pay.

                Please explain how only the income I made above a certain point is taxed at one rate while the lesser income is taxed at a lower rate?

                I'm always up for a tax lesson

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                • #9
                  Re: Anybody doing taxes yet?

                  Originally posted by Service Guy View Post
                  Yeah, a lot of people don't understand how tax brackets work. Only the portion of income that falls in the bracket is taxed at that level. So, if you make $5,000 over a certain bracket in taxable income, only the last $5000 will be taxed in the higher bracket, the rest of your income will be taxed at the lower bracket. I was trying to explain that to people during the election, so they would better understand the tax plans of the candidates.

                  I'm not sure this is accurate in all situations based on everything I have been reading... Can you tell me where this is explained on the tax forms?

                  Comment


                  • #10
                    Re: Anybody doing taxes yet?

                    Originally posted by Service Guy View Post
                    This thread should probably be moved to the "business discussion" section.
                    I hired a CPA recently too. He does my taxes better than I can, gives me advice on how to save money, and best of all he handles a lot of the book-keeping now! Saves me hours of time.
                    Business section, I have never been there... What a good idea

                    Comment


                    • #11
                      Re: Anybody doing taxes yet?

                      Originally posted by OkieBill View Post
                      I'm not sure this is accurate in all situations based on everything I have been reading... Can you tell me where this is explained on the tax forms?
                      Here, I just googled "tax bracket" and this site came up.
                      http://www.fairmark.com/begin/bracket.htm

                      Will my overall tax go up sharply when my income reaches the point where I'm in the next tax bracket?
                      No, there's no reason to be concerned about this possibility. When you reach a higher tax bracket, any additional income will be taxed at the higher rate, but the income required to reach that level is still taxed at the lower rates. For example, if your taxable income is just $100 above the limit on the 15% bracket, the last $100 dollars will fall in the 25% bracket and will cause your tax to increase by $25, but won't affect the tax you pay on all your other income.
                      Water Heater Reviews & Water Heater Information

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                      • #12
                        Re: Anybody doing taxes yet?

                        Originally posted by Service Guy View Post
                        Here, I just googled "tax bracket" and this site came up.
                        http://www.fairmark.com/begin/bracket.htm
                        Well I thought my taxes were done %$@&

                        Thanks for the advice guys! Yor wisdom is priceless

                        Man it sux being a business rookie...

                        Okie

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                        • #13
                          Re: Anybody doing taxes yet?

                          Originally posted by OkieBill View Post
                          I'm not sure this is accurate in all situations based on everything I have been reading... Can you tell me where this is explained on the tax forms?
                          If you look at the tables starting on page 92:
                          http://www.irs.gov/pub/irs-pdf/i1040.pdf

                          Let's say your single. You pay 10% of the amount from 0 to $8025. But if you make between $8,025 and $32,550, you pay $802.50 + 15% of the amount over $8,025.

                          Under the US tax system, you end up with more in your pocket if you make more money.

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                          • #14
                            Re: Anybody doing taxes yet?

                            Ahhhhh I think it is making sense to me now My wife is helping me understand...

                            It can make a heck of a difference to have the IRA and lower your taxable income.

                            For example:

                            The tax on the $5000 IRA contribution
                            15%= 750
                            25%=1250
                            28%=1400
                            33%=1650
                            35%=1750

                            So If you are on the cusp of a bracket and the IRA contribution takes you below this amount then your tax goes down to this + 15% of the amount over this
                            Taxable income is overBut not overThe tax isPlusOf the amount over$08,025$0.0010%$08,02532,550802.5015%8,02532,55078,8504,481.2525%32,55078,850164,55016,056.2528%78 ,850164,550357,70040,052.2533%164,550357,700 103,791.7535%357,700

                            ( I lost the formating of the table in the link Service guy posted
                            http://www.fairmark.com/begin/bracket.htm down at the bottom.)

                            In other words if you earned $32,550 your tax would be $4481.25 without the IRA contribution.

                            If you earned the same amount BUT made a $5000 IRA contribution to put your taxable income at $27,550 then your tax would be $3730.75 making a tax savings of $750.

                            Okie

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                            • #15
                              Re: Anybody doing taxes yet?

                              don't forget that estimated taxes are due/ postmarked by the 15th

                              a "sep" ira allows the self employed to contribute up to 15% of their net profits into a tax deferred retirement account. plus this comes right off the top of your taxable income.

                              a ''roth'' ira is similar except the deduction is taxed now and the money is tax free upon retirement down the road.

                              hiring a good accountant and keeping them year after year makes for a very simple tax prep. they have your returns from years past and it's basically an update every year with new numbers and tax codes.

                              i've had my same accountant the past 20+ years and i'm in and out of his office once a year in under 2 hours. he has my returns and estimates ready in 2 weeks and i'm billed under $400.

                              reason why so cheap. as i've mentioned, been with him for years, and my personal bookkeeping, quicken line items are all broken down.

                              i do 99% of the day to day bookeeping and he takes my end of year line items and applies them to my returns.

                              what's funny is his file cabinets are labeled with celebrity names and my little drawer is buried in the low far corner
                              doesn't he know i'm plumber rick

                              well i guess it's better than the rest of the family. their drawer isn't labeled

                              rick.
                              phoebe it is

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