Tag Archives | Congressional clowns

World’s teeniest tax bracket

By on January 22, 2013 in Creative, Internal Revenue Service, Politics, The Economy

With the new tax bill passed by Congress in January 2013, there are now seven marginal tax brackets–10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. OK, no big problem there.

Here’s the stupid thing: The only single filers who fall into the 35% marginal bracket will be those with taxable income of $398,350 to $400,000.

That’s right–there is now a tax bracket with a range of $1,650. One Thousand, Six Hundred Fifty Dollars.

You can see the new 2013 tax brackets for yourself here, courtesy of The Tax Policy Center, which estimates that fewer than 500 singles nationwide will fall into this bracket in 2013. You can also find Forbes contributor Howard Gleckman, in primo head-shaking mode, weighing in here.

I can’t make this stuff up.

Late refunds this year, courtesy of Congress

By on January 15, 2013 in Internal Revenue Service, Politics

Are you used to filing your returns in January so you can get your tax refund early?

For 2013, think again.

Because Congress didn’t give us the final tax code for 2012 until January of this year, many taxpayers will be unable to get their returns processed by the IRS until late February or early March.

Who can’t file early? Anyone whose return includes depreciation (Form 4562), a residential energy credit (Form 5694) adoption expenses (Form 8839) and about two dozen other forms.

You can find out if you have one of the forms on the late list by checking here.

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Congress’s “2% Solution” creates another mess for taxpayers

By on December 27, 2011 in Elections, Politics, The Economy

After some pathetic grandstanding by House Republicans, Congress passed an extension of the current Social Security tax break in December. Sounds good, right?

Get into the details and see how Congress can make the tax rules more complicated than ever — even when doing something as simple as this.

First off, the extension — reducing the withholding rate for Social Security taxes from 6.2% to 4.2% — is good for only two months. That means this issue is going to come up again during the winter.

Here’s the ridiculous part: If you earn more than $18,350 during the first two months of the year, you will have to pay a recapture tax on any earned income beyond that amount when you do your 2012 returns.

Doesn’t that sound like fun? If you have a job paying more than $110,100, do you like the idea of having to keep track of exactly how much you make before February 29? Does earning overtime in that case mean that you’ve inadvertently complicated your tax-filing life? And how are self-employed people supposed to track exactly when they earn or receive money during the year?

It’s very possible that Congress will eventually extend the tax break so it is good for all of 2012. But this is just one more reminder of how tax legislation is passed without any thought to how it complicates the lives of taxpayers.

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Lies, damned lies, and unemployment statistics

By on December 6, 2011 in Politics, The Economy
     The latest word from the federal number-crunchers says the November unemployment rate dropped to 8.6% from 9% the previous month.  So why doesn’t it feel like the job market is getting better?
     Simple reason:  The government does not include people whose unemployment benefits have run out in the official unemployment figures.  So while 120,000 new jobs were added to the economy in November, the more important number was 315,000–the number of people who dropped out of the work force.
     That is a distressing number.  As The New York Times pointed out, unemployment and underemployment is a problem that Congress continues to largely ignore at a time when government economic stimulus and programs to preserve some semblance of a social safety net are needed more than ever.
     As a tax pro, I look to government reports for a lot of reliable information.  But I hate it when the official statistics mask the reality of Americans’ daily lives.
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Rep. Paul Ryan: The millionaire’s friend

By on September 18, 2011 in Politics, Socialism in America, Tax Policy

Rep. Paul Ryan–the author of the Republican plan to end Social Security and Medicare as you know it–on Sunday called President Obama’s proposal to raise taxes on people who have more than $1 million in earnings, “class warfare.”

Take a moment to absorb that. Here’s a leading speaker for the Republican Party, the chair of the House Budget Committee, leaping to the defense of the abused struggling group of Americans who take in more than a million dollars of income annually.

At the same time, the Republicans haven’t seen a cut programs that benefit the vast majority of Americans–whether to Medicare, unemployment benefits, government public works programs, environmental protection, food safety or a host of others–that they didn’t like.

Paul Ryan, this week’s real general in class warfare.

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