Bend over when you get ready to file N C tax

Mr.Gadget

Old Mossy Horns
false economy in my opinion,,,,,,,pay more in interest than you save on real taxes,,,,,,

retirement is abou managing all apsects of income to manage costs - to include taxes - only withdraw what you need, and if you have a paid off house you don't need the income to pay for it and thus don't pay taxes on income you don't need,,,,,,

if it's a government income (state or federal retirement) you don't (or at least didn't up to this year - haven't checked that yet) pay state taxes on it,,,,,,,,if your withdrawing from a retirement account, manage that withdrawal to minimize tax implications,,,,,,,

and if it's SO dang much that you are forced to take,,,,then give it to a good charity,,,,,

but having a house payment for the tax benefits is false economy, ,,,,,,,,,,,,

but then I'm not a tax lawyer,,,,,,,

very true....

bunch of people look at it wrong when it comes to that.

they will do anything to justify making payments on something that they can't really pay for.
 
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woodmoose

Administrator
Staff member
Contributor
You might be right I have that run the numbers myself. One consideration is the opportunity cost of the money that you used to pay off the house early versus the return on investing that money. But, like you I am not on economist

yes,,,,opportunity cost,,,,,,,,but I detest debt,,,,,,
 

hunter

Eight Pointer
Contributor
VikingsFan,

I can only say that it did for me and the wife! I hope we were the exception rather than the rule!

Hunter
 
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Hunter10

Guest
Just wait until you retire, the kids are grown and gone, home paid for, no itemized deductions left at all.
Tax instructions become real simple then:
1) How much did you make ?
2) Send it in !

Sorry to hear that Roundball. Isn't there some sort of tax break for retirees in NC? I'm not old enough to retire, but had heard there was some type of break.
 

nckeith

Ten Pointer
I am not sure what all the fuss is. Take your total wages and salary and multiply by .058. That is the highest you can potentially owe. I find the whole thing much simpler and better off since its saving me about 2% in states taxes so far. I don't get to deduct the 529 contributions I make, but I come out ahead based on my total earnings having a lower tax rate. I do see how the 50k exemption was helping lots of self employed folks, but for wage earners like myself, the break is appreciated.
The whole idea of the new tax code is to spread the burden out to as many as people as possible. We do have about the closest thing to a flat tax right now.
 

Ldsoldier

Old Mossy Horns
I'm a little confused. Are ya'll talking about the exemption being required to be 1? If anything that would net you a larger return (read: get back more of your money) come tax time since it would actually take out more during the year.
 

Zach's Grandpa

Old Mossy Horns
I am not sure what all the fuss is. Take your total wages and salary and multiply by .058. That is the highest you can potentially owe. I find the whole thing much simpler and better off since its saving me about 2% in states taxes so far. I don't get to deduct the 529 contributions I make, but I come out ahead based on my total earnings having a lower tax rate. I do see how the 50k exemption was helping lots of self employed folks, but for wage earners like myself, the break is appreciated.
The whole idea of the new tax code is to spread the burden out to as many as people as possible. We do have about the closest thing to a flat tax right now.

A lot of self employed folks are way under 50K a year, now they owe .058% of whatever that number is.

Just for the heck of it I took the numbers from 2014 and put them on a 2013 D-400 state return. The same numbers last year would have equated to a $541.00 refund instead of $497.00 owed for 2014. Believe me, whether going to zero on exemptions or not it is a tax increase that is going to shock most people when they file.
 

nckeith

Ten Pointer
A lot of self employed folks are way under 50K a year, now they owe .058% of whatever that number is.

Just for the heck of it I took the numbers from 2014 and put them on a 2013 D-400 state return. The same numbers last year would have equated to a $541.00 refund instead of $497.00 owed for 2014. Believe me, whether going to zero on exemptions or not it is a tax increase that is going to shock most people when they file.

I am sorry, but I don't see how this is a tax increase by any means. The tax is flat 5.8%. If you are a 1099 employee and in years past you were paying 0 in state income taxes because you made under 50k, that is not a fair tax. That is me paying almost 8% so you can pay 0. What the legislatures did, was remove exemptions and levi the fairest tax of all, a flat tax that does not increase percentage wise as your earnings go up, and tries to make all wage earners pay something. I would think that anyone in NC making a wage should pay state income taxes. The old system of 3 tiers based on income levels as well as exemptions and the 50k cut off pushed a higher percentage of taxes onto the smaller percentage of tax payers. To say otherwise is the same argument the POTUS made in his state of the Union, which is "rich" people need to pay more. I would argue that everyone needs to pay something, so the burden is spread amongst a greater population.
I know many small business owners who gladly didn't take a paycheck or two towards the end of the past years to game the cutoff. Meanwhile as a regular W-2 employee I had no choice but to watch my earning be taxed weekly.
Surely you are not arguing that it was ok for an employee making $51,000 a year to pay state income taxes but a self employed person making $49,000 should have paid nothing?
 

Firefly

Old Mossy Horns
My Wife and I usually get a small refund back from the state each year. If we have to pay this year then to me its a tax increase. Either way its money out of our pockets whether its a so called tax increase or not...Anyone can call it whatever they wish its still money gone that we won't have to live on in our retirement.
 

nckeith

Ten Pointer
FF I am not sure how retired folks will fair. I am not an accountant. I would hope it won't result in an increase.


Sent from my iPhone using Tapatalk
 

Zach's Grandpa

Old Mossy Horns
Surely you are not arguing that it was ok for an employee making $51,000 a year to pay state income taxes but a self employed person making $49,000 should have paid nothing?

I'm not arguing anything, just stating that the same numbers for 2013 would have resulted in a small refund but result in owing tax in 2014. I suppose that could be called most anything anyone wants to call it, I call it a tax increase for me personally.
 

Firefly

Old Mossy Horns
FF I am not sure how retired folks will fair. I am not an accountant. I would hope it won't result in an increase.


Sent from my iPhone using Tapatalk

Neither do I but I don't see any difference really if there is an increase in our taxes.. I don't think it will be any different for retiree's but we will see shortly..
 

sky hawk

Old Mossy Horns
Contributor
I'm with nckeith, no matter how our taxes fair next month when we file, a flat tax rate where everyone pays something is better than large discrepancies among taxpayers regarding who pays and how taxes are paid. Sounds like a lot of tax exemptions got canceled, but philosophically, a simpler tax system is a better tax system.
 

flathead977

Ten Pointer
As a side note, how does last years refund count as income that you need to turn into your tax preparer? It was your money that you overpaid and let the state have all year interest free, then have to claim it as income when filing. Makes no sense to me.
 

ArmyMutt

Eight Pointer
One thing I really dislike about NC is that they factor my income (TN resident from military) into her tax burden because they want to use the federal 1040. We usually end up filing a cmopletely different set of paperwork just so we don't get taxed unfairly.
 

BarSinister

Old Mossy Horns
I might like to see just a flat tax on goods so we can recoup some of the money from the freeloaders.

ArmyMutt that is about as unfair as you can get. Several states do it though. I also do not like paying taxes on things (boats, motorcycles, cars, etc) each year when I paid taxes on them when they were bought.

Founding Fathers are rolling over in their graves for sure.
 

Gadwall

Ten Pointer
As a side note, how does last years refund count as income that you need to turn into your tax preparer? It was your money that you overpaid and let the state have all year interest free, then have to claim it as income when filing. Makes no sense to me.

It's because state taxes you pay are deductible on your Federal return. So, when you get a state refund on overpaid taxes, you have to recognize it as income. Otherwise you would have gotten a deduction for taxes you didn't really pay (because they were refunded). Sounds crummy, but it really does work out.
 

Ldsoldier

Old Mossy Horns
Unless you're getting back more than you paid in this makes no sense. Otherwise it's no different than money you put in a savings account.
 

Gadwall

Ten Pointer
Unless you're getting back more than you paid in this makes no sense. Otherwise it's no different than money you put in a savings account.

Your analogy doesn't work because you don't get a deduction from the federal govt. when you put money in a savings account, therefore you don't have to recognize income when you take it out. You DO get a federal deduction when you pay state income taxes. Therefore if you get some back you have to undo the deduction (i.e., recognize it as income).
 

Ldsoldier

Old Mossy Horns
I guess it doesn't make sense because I'd only claim money as taxes that I actually paid in taxes. A refund shouldn't be claimed because its your money to begin with, unless you're getting back more than you paid in.
 

Firefly

Old Mossy Horns
I guess it doesn't make sense because I'd only claim money as taxes that I actually paid in taxes. A refund shouldn't be claimed because its your money to begin with, unless you're getting back more than you paid in.

I agree, to me paying tax on tax just ain't right !
 

Zach's Grandpa

Old Mossy Horns
You don't have to claim a state refund as income on your 1040 unless you showed it as an expense on your 1040 the year before. You aren't really paying tax on it just offsetting a deduction you took for paying state tax.

Example: $3000.00 was withheld during a year for state tax, you claim that on your Fed. 1040 as an expense on a schedule A as local and state taxes paid. Later in the year you get back $1000.00 of that in a refund check, now you didn't have a $3000.00 expense you had a $2000.00 expense. So the next year you claim the $1000.00 as income to offset the difference.
 

Gadwall

Ten Pointer
You don't have to claim a state refund as income on your 1040 unless you showed it as an expense on your 1040 the year before. You aren't really paying tax on it just offsetting a deduction you took for paying state tax.

Example: $3000.00 was withheld during a year for state tax, you claim that on your Fed. 1040 as an expense on a schedule A as local and state taxes paid. Later in the year you get back $1000.00 of that in a refund check, now you didn't have a $3000.00 expense you had a $2000.00 expense. So the next year you claim the $1000.00 as income to offset the difference.

Exactly.
 

southwake

Four Pointer
North Carolina changed their deduction schedule beginning January first of 2014. To put it in simple terms they took less money out of your paycheck each pay period.

for example-in 2013 you made 50k. you had 3 dependents . you claimed married 1 dependent. throughout the year state tax was taken out with every paycheck. At the end of 2013 you paid the state 4k. After doing your taxes in February of 2014(2013 tax year) you find out you OVERPAID the state and got a refund of 1000 dollars, so your tax was 3000. Pretty normal.

now in 2014 you have the same number of dependents, you made the same money, you still claimed married 1 dependent. With the new tax deduction schedule in place they were taking less money out of your paycheck each pay period. By the end of 2014 they only took out 3000 dollars, instead of the usual 4000 in years past, so there went the refund you though you were getting. You got it throughout the year.

just one example. It will be the same principal of you are married, single, kids, no kids.

also if I remember correctly the actual income tax rate was supposed to be lower. I think another tax change was they increased other taxes to make up the difference in the lower income tax. Bait and switch as someone else already stated. my opinion is The main goal in doing this was to save the top earners money, and then tax every day items higher--that's "fair" right?.
 
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Jlewis74

Old Mossy Horns
I came out almost even to the penny which is how I like it! Taxes could always be less but I dont want to move!
 

Wncbowhunter

Ten Pointer
Yep, for the first time in my tax paying life, I owe the state more $$$$$. Not but 30 bucks so it is not a major issue and I like coming out even so all in all not too upset.
 
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