[RooRoobird14]

Heck, I can do better than that!!!!

I'm an engineer, hubby is an IBM salesman (both 46 yrs old). Together last year we earned $210,000. Though payroll witholding, we had $38,000 taken out of our paychecks by the IRS, $11,000 witheld by the state (maximum witholding rates, zero deductions). We had to write out an additional check on January 15th for another $8,000 to the IRS. $57,000 in state and Federal income taxes on an income of $210,000--how would you like to pay that?

For the smart-@ss freepers who say "get a better accountant," you obviously don't know what you're talking about. Our problem is that we are "evil rich" people with one child and a paid-off mortgage. Because of our income, we can't do IRA's, Roth IRA's education savings accounts, etc. etc. Yes, we max out our 401k's every year!!! We don't even get a full deduction for our daughter because of our income bracket. Ever heard of that neat little trick in the tax code? Most people haven't.

Since we don't own our own business, we can't reduce our taxes with fake expenses like so many small business owners do.

Welcome to the real world of the U.S. Tax Code, farmall!!!

You can thank (among others) your socialist buddies at the NEA for continuing to vote for scumbag Democrats who can't do anything except raise my taxes and create new wasteful ogovernment programs.

[DallasDeb]

Yes, we max out our 401k's every year!!!

The government increased the maximums on 401K and 403B contributions beginning this year. The limit is increasing by $500 to $11,000 for 2002, and then it will increase by $1000/year until it reaches $15,000 in 2006. I know it's not much, but it's something. Also, once a taxpayer reaches 50, he/she can begin to contribute more to 401Ks.

Also, under the new tax law, workers age 50 and older can contribute even more of their salary to their 401K plans beginning in 2002, provided plan rules allow. Here are the amounts of the catch-up provisions and the years when they take effect, excluding any employer contributions:

 

Year	Maximum Tax-Deferred Contribution for All Workers	Catch-Up Contribution (for age 50+)	Total Contribution with Catch-Up
2002	$11,000	$1,000	$12,000
2003	$12,000	$2,000	$14,000
2004	$13,000	$3,000	$16,000
2005	$14,000	$4,000	$18,000
2006	$15,000	$5,000	$20,000

Beginning in 2007, the catch-up contribution amount will be indexed for inflation in $500 increments. This contribution is in addition to the catch-up contribution that is allowed to employees who have worked for the same employer for 15 years or more.

Also, check out the Education IRAs. The maximum is only $500 (per taxpayer?). I believe it started last year, so you might still be able to set up an account by 4/15/02 to claim it on your 2002 taxes.

[JudyB1938]

If you want to REALLY get mad, figure out all the other taxes you pay - gasoline, sales, etc. My son-in-law did here while back. It was SEVENTY PERCENT by the time all "hidden" taxes were factored in.

[Inkie]

One or two people on this thread seem to think that, if you make more than them, then you deserve to have it taken away. Would they do that to their next door neighbor, say, if the neighbor had two nice cars and they had one crapped out one? Would they go over and say, "You have more than me; give me some of what you have." No, they wouldn't. So why is it okay to do that via the tax system? Furthermore, as to the original post on this thread, if you tally up all the hours that these two teachers work, they are probably making less than minimum wage.

[Henk]

Since we don't own our own business, we can't reduce our taxes with fake expenses like so many small business owners do.

What the heck is that supposed to mean? You can only expense against income you make from the buisness to begin with.

[1 FELLOW FREEPER]

You are not evil, in fact I am proud of you two. But you can lower your taxes 100 different ways. You either need a good accountant, or a good financial advisor.By the way I earn that much and pay 1/3 less in taxes.

[TheCPA]

You are right that an employee has far less flexibility in saving taxes than does a self-employed individual. You are also right that few people understand that exemption deductions and itemized deductions are phased out for people with what the government thinks are high incomes. These phaseouts, however, will themselves be phased out under the 2001 Tax Act. Other than maxing our your 401k plans, about all you can do is be sure to shelter medical expenses with a Sec. 125 cafeteria plan if your employer has one available. You could also start a small business if you have the time and interest.