- $434 = Federal and State taxes saved per pay period **at first I thought my net pay should be higher, but then I remembered that Social Security and Medicare taxes are not affected by deductions in taxable income
- $4783 = taxes saved for 2009 if I max out 401K (~$434 per pay period x 11 pay periods)
- $1,000 = make-up tax payment that I will NOT have to pay come April 2010
- $1,700 = what I have left to spend per month
- $1,200 = absolute fixed costs (rent, insurance, student loan)
- $500 = what I have to spend on everything else (food, gas, car repairs, misc., etc.)
- $0 = anticipated leftover at the end of the month
Archive for the ‘Taxes’ Category
It seems that Dog Ate My Finances has created another uproar within the blogosphere by refusing to apply for unemployment insurance after a recent job loss.
Her feeling (that unemployment is equivalent to a hand-out – which I don’t agree with) may tick people off, but her action (not taking unemployment, which, in some teeny tiny way, lessens the strain on the whole system) should be something that benefits everyone in her state who is taking unemployment.
So I say, each to his/her own. If you qualify for unemployment assistance, don’t be ashamed to take it. Being on unemployment is not a sign of weakness nor a personal failing. If you decide not to take unemployment for whatever reason, then good for you, and don’t be ashamed to stand behind your decision.
In the end, we’re all just trying to do the best we can, by making decisions that mesh with our financial and personal goals and beliefs, right?
I owe close to $1,000 for federal and state taxes.
This is due to lack of a 401(k) this year – I could’ve brought down my taxable income by $15,500 if only my employer offered the 401(k) option to me. (Do you see why I am such a huge fan of a “universal” or “private” 401K? Any policy wonks listening? We need non-employer-based income-deferral program outside of IRA, please.).
I will have to wait for my paycheck to come in (April 15) before I e-file my return (April 15) and pay up to Uncle Sam.
Here’s one of my biggest personal finance pet peeves: one of the biggest source of tax deferral for the middle class, the 401(K), is utterly dependent on the employer.
Doesn’t this arrangement feel a little anachronistic in an age where careers may be characterized by frequent job changes and/or stints at self-employment?
I didn’t have a 401K for 2008. My company is talking about starting a 401K in the next several months, so I’m hoping that will work out. All that TAXES that’s being taken out of every paycheck is enough to make me see red. I know, I know, public goods and all that jazz… but please.
Why can’t the government set up a portable tax-deferal vehicle that allows an individual to defer W2 earnings? It’d just look like the IRA, with the contribution limits as a 401K. Let’s call it a “private 401K” here.
In essense, instead of the company administering the 401K plan, the individual can choose any provider such as Fidelity, Vanguard, Scottrade, ING, etc. Then, if the employer decides to do so, it can contribute a “match” in the private 401K.
Under this scenario, ANYONE with an earned income would be eligible to contribute $21,500 in tax-advantaged accounts for 2009: $16,500 in a private 401K, and $5,000 in an IRA. The government is worried about people saving adequately for retirement. Wouldn’t this be a step in the right direction?
I can’t imagine that this idea hasn’t been proposed before. On another note, I really think that healthcare insurance should be de-coupled from employers as well.
So I got my state & federal tax refund (~$1,500)… I put basically everything into the Freedom Fund and retirement portfolio. (Sidebars updated).
But, as a little something something for myself, I bought a BCBG dress ($26 at Marshall’s) and red patent leather pumps ($10 at Ross). I know, I’ve TOTALLY fallen off the buy-less-stuff wagon.
I was very tempted by a pair of Coach heels, but I realized that I didn’t quite like the way the toe looked, and just because I found Coach shoes for $45 in my size doesn’t mean I have to buy it. I also passed on Michael Kors sandals for $30. So, it was a relief to find that although brand names still exert some influence over me, I am able to resist the temptation.
I love so many things about you. The sunny weather of Los Angeles. The beautiful lights of San Francisco. The seaside breeze of San Diego. The quaint charm of Santa Barbara. I love your food and people and even your moniker, the Golden State. And I think Arnold has a legitimate claim to the title “America’s Toughest Governor.”
But… as a denizen of the Golden State, might I just offer a couple suggestions for improvement?
First, what is up with your taxes? 9.3% state income tax, then up to a 8%+ sales tax? Sure, you’ve got low property taxes, but let’s be serious. A low property tax won’t help if I can’t even afford the property.**
Can’t you offer some relief to us working folks? How about a state tax deduction for 529 Plans? Lots of states do it already… isn’t it time that CA joined in the fun? You’ve got one of the preeminent public university systems in the UC, but let’s face it. Even for a public school, UC’s aren’t getting any cheaper.
**Where’s this impeding real estate bust that I’ve been reading about? Why is the 2-bedroom condo next to me still selling for $450,000 (down from $475,000!) even with a “motivated seller”?
Loyal (but over-taxed) Californian
‘Cause I’ve got one to give away!
Thanks to the folks at H&R Block, I have the key code for one TaxCut Online Premium + State + efile (a $59.95 value).
All you need to do is to comment on this post and tell me an interesting fact about taxes or your thoughts about taxes. Oh, and pick a number between 1-100. I’ll use a random number generator to pick the winner on Friday, April 4. You must leave your email so I can contact you if you win.
Okay, that’s all. If you’re a late filer… start commenting! 🙂
EDIT: The winning number is 30, and so the winner is Penny Pincher with the closet number at 27. Congrats & thanks to everyone who participated! If I ever get any more cool stuff in the future, I’ll let you know. 🙂