Maryland is a raging far-right wing global Wall Street state and if all these tax laws break down TAX UNIFORMITY we can bet it is not to benefit WE THE PEOPLE. As we said----no one in Maryland is making sure people actually get these tax breaks--in fact we have media writing articles that tell us a majority of people never claim these tax breaks because they don't know about them or don't know how to do their taxes so they get them. Who wants to go to corporate tax preps when the industry is known to be fraudulent? Creating the environment of distrust in industries we need to do basic civic tasks----that is how we have a super-majority of citizens not getting these tax reliefs. On the other side---we can be sure corporations are getting their tax relief AND THEN SOME as they hire tax prep with goals of fleecing this ANTI-UNIFORMITY TAX CODE.
Below we see a public policy think tank on tax policy and we are told it is LIBERAL. The funders are all right wing global Wall Street so liberal means CLINTON/OBAMA NEO-LIBERAL---this let's the 99% know this group is not working for WE THE PEOPLE even as it outs bad tax policy which has been in place these few decades. It's like shouting for affordable housing AFTER ALL DEVELOPMENT HAS MOVED FORWARD.
ITEP lists a number of foundations among its funders, including the Annie E. Casey Foundation, the Ford Foundation, and the New York Community Trust. ITEP also accepts individual donations.
ITEP's quantitative analyses are utilized by observers from across the political spectrum and by analysts within government. ITEP, as well as the associated Citizens for Tax Justice, has been characterized as liberal'.
If no one is doing oversight-----FLEECE TO THAT CORPORATE HEART CONTENT. Whose job is it to enforce TAX UNIFORMITY LAWS at Federal and state level? Our US Justice Dept.......our state attorney's general ----our city attorney's office-----that is ERIC HOLDER/MARYLAND'S GANSLER/FROSH/ BALTIMORE'S BERNSTEIN/MOSBY.
This is how we know we have GLOBAL WALL STREET PLAYERS in office and not REAL Republicans and Democrats.
'And most states provide special property tax breaks to the elderly. Unfortunately, too many of these breaks are poorly-targeted, unsustainable, and unfair'.
INSTITUTE OF TAXATION AND ECONOMIC POLICY ITEP----MARCH 2015
State Tax Preferences for Elderly Taxpayers
State governments provide a wide array of tax breaks for their elderly residents. Almost every state that levies an income tax
now allows some form of income tax exemption or credit for citizens over age 65 that is unavailable to non-elderly taxpayers.
And most states provide special property tax breaks to the elderly. Unfortunately, too many of these breaks are poorly-targeted, unsustainable, and unfair. This policy brief surveys federal and state approaches to reducing taxes for older adults and suggests options for designing less costly and better targeted tax breaks for elderly taxpayers.
Federal Income Tax Breaks for Elderly Taxpayers
Federal tax law provides two substantial tax breaks to elderly taxpayers:
A partial exemption for Social Security benefits.
No taxpayers with Social Security income pay tax on every dollar of their benefits.
Elderly taxpayers with incomes below $25,000 ($32,000 for married couples) are fully exempt from paying taxes on Social Security benefits. Income for this purpose is adjusted gross income plus half of Social Security benefits. For those with incomes between $25,000 and $34,000 ($32,000 and $44,000 for married couples) up to 50 percent of benefits are taxable and for higher incomes up to 85 percent is subject to tax.
A larger standard deduction.
All married couples can claim a $12,600 standard deduction in 2015 while elderly taxpayers receive an
extra $1,250 for each spouse over 65. Single elderly taxpayers also receive an extra deduction.
Most States Offer Additional Elderly Tax Breaks
Most states that levy income taxes go beyond the tax preferences for the elderly inherited from federal income tax rules and allow special
elderly-only tax breaks of their own. Many states also provide property tax breaks only available to homeowners (and in some cases
renters) over 65. For a list of tax breaks by state, see the chart at the end of the brief.
All Retirement Income:
states with a broad-based income tax (Illinois, Mississippi, and Pennsylvania) fully exempt all retirement income
from taxation. This includes private and public pensions, Social Security, and annuities.
36 states with an income tax allow some exemption for private or public pension benefits. These range from fully
exempting all pension benefits for adults above a certain age to exempting only a portion of benefits or the benefits earned by specific types
of workers, such as military veterans.
32 states with an income tax exempt all Social Security benefits from tax. Five states tax some Social Security benefits,
but provide an exemption that is more generous than what is available at the federal level. Seven states tax Social Security benefits using the
same exemption rules as the federal government.
Virginia allows an exemption capped at $12,000 for all sources of income for adults 65 and older with annual income
below $50,000 ($75,000 for married couples). A few states exempt interest, dividends, or capital gains income received by seniors.
Extra Personal Exemption and Standard Deduction:
20 states allow senior citizens an additional personal exemption or exemption
credit, allowing these taxpayers to shelter twice as much of their income from tax as similar non-elderly taxpayers are able. Seven states
allow their senior citizens to claim the higher federal standard deduction.
Property Tax Reductions:
22 of the 30 states that provide a property tax credit limit the credit’s availability to senior citizens, or provide
a more generous version of the credit to older adults. In some states, the credits are calculated based on the relationship between income and property taxes (a circuit breaker) and in others the credit is simply based on age and income. Many states also offer homestead exemptions, which shelter a certain amount of a home’s value from tax, that are larger for senior citizens than for other taxpayers.
Design Issues for Elderly Income Tax Breaks
The goal of reducing taxes for elderly taxpayers is an attractive, if costly, one—and lawmakers in virtually every state have taken steps to achieve it. Providing such tax breaks requires confronting several important design issues that can make the difference between an effective policy and a poorly-targeted and expensive tax giveaway.
First and foremost, there is the question of who should benefit. In many cases, wealthy elderly taxpayers reap the biggest benefits from state
income tax breaks designed for older adults. This is especially true in states that fully exempt Social Security or pension income from the tax base. Since low- and fixed-income elderly taxpayers are already shielded from owing income taxes on Social Security under federal rules, states that chose to exempt all Social Security benefits spend a lot of money on a poorly designed tax break. In Rhode Island for example, more than half of the benefit of fully exempting Social Security from the state’s income tax flows to the richest 20 percent of taxpayers. Exempting all retirement income is even less targeted with two-thirds or more of the break going to the top 20 percent in Rhode Island.
Other considerations include:
What types of income should be eligible for tax breaks?
Many state income tax exemptions for elderly taxpayers apply only to
particular income sources, such as pension and Social Security benefits, while providing no relief for earned income such as salaries and wages. Special tax breaks for pension benefits shift the cost of funding public services away from retirees and onto working taxpayers--including working seniors.
How large a deduction or exemption?
States that provide elderly exemptions usually limit the amount that can be deducted. Arkansas,
for example, allows seniors to exempt the first $6,000 of all pension benefits.
Yet other states allow much higher caps on deductions;
a married Maryland couple over 65 could deduct as much as $58,000 in benefits in 2014. And three states (Illinois, Mississippi and Pennsylvania) completely exempt all pension benefits from income tax while fully taxing seniors’ wages). Imposing a low cap on exemptions for seniors helps to target the benefits of elderly tax breaks to low-income seniors, and makes these exemptions more affordable for state governments.
Some states allow elderly exemptions only for low-income seniors. For example, Montana exempts up to $3,980 of pension income and the exemption is gradually reduced to zero for single taxpayers with incomes over $35,190 ($37,180 for joint filers).
Most states, however, extend elderly tax breaks to seniors at all income levels. Imposing income limits helps to target the benefits of
pension and other retiree tax breaks to truly needy seniors.
Deduction or credit?
States can provide income tax breaks through deductions and exemptions, which reduce taxable income, or through credits, which provide a dollar-for-dollar reduction in tax liability. Deductions are usually worth much more to upper-income taxpayers, while credits provide a more equal benefit to taxpayers with varying levels of income.
Refundable or non-refundable credit?
A refundable income tax credit is one that is available even to those who owe little or no
income tax. Refundability is important for fixed-income seniors who pay a larger portion of their income in sales and property taxes than in income taxes. Idaho, for example, has a special “grocery tax” credit (available to taxpayers of all ages, but seniors get a higher credit) that is administered through the income tax, and is designed to offset sales taxes on low-income seniors who may owe no income tax.
Refundable credits are the best-targeted, and least expensive, way to achieve income tax relief for fixed-income seniors.
Demographic Trends Mean Growing Costs for Elderly Tax Breaks
Poorly targeted tax breaks for the elderly are a costly commitment for many states and long-term demographic changes threaten to make these tax breaks unaffordable in the long run. Older adults are the fastest growing age demographic in the country. According to the US Census, the population of adults 55 and older grew by more than 30 percent between 2000 and 2010, while the population of those under 55 grew only by 4 percent. This trend is even starker in some states, where the population of older adults has grown by as much as 50 percent in just a decade.
By 2030, almost 20 percent of the US population will be over 65. Over time, this demographic shift will mean that a shrinking pool of workers will be forced to fund tax breaks for an expanding pool of retirees—heightening the need to target these tax breaks appropriately in order to minimize their cost.
Moreover, while poverty has often been associated with advanced age, a 2014 US Census report found that Americans over 65 are less likely to be poor than people in their prime working years, further exacerbating the mismatch between the tax breaks offered and needs within the population. Since the 1990s, the poverty rate for the elderly has been steady at 10 percent, while the overall share of Americans living in poverty has risen to 13.6 percent. Trends such as rising income inequality and single-parent household formation have eroded the middle
class, further weakening the pool of workers that finance tax breaks for the elderly.
Elderly Tax Breaks: Matching Rhetoric with Reality
Few demographic groups receive more attention from state lawmakers than fixed-income seniors. There is a virtual consensus among elected officials that retirees should not be “taxed out of their homes,” for example. Yet state income tax breaks for elderly taxpayers typically reserve the lion’s share of their benefits for better-off elderly taxpayers. These poorly targeted tax breaks shift the cost of funding public services towards non-elderly taxpayers, many of whom are worse off than the seniors benefiting from the tax breaks. Retooling elderly tax breaks to better target the neediest seniors will help states, in the long run, to achieve a fairer and more sustainable tax system.
See the chart starting on the following page for a state-by-state overview of tax breaks for elderly taxpayers as well as age demographic trend
Here is an example of how these tax breaks are really not helping in this case seniors. These few decades of far-right wing economic policy has had a majority of US citizens having worked hard for decades at strong paying jobs lose those jobs and become long-term unemployed. During that time those made desperate for work were pushed to SS disability-----they lost their Medicare benefits because states have been allowed to create WINNERS AND LOSERS in who receives these EQUAL PROTECTION BENEFITS. This was the problem a left tax policy group would have been shouting these few decades. Today, most of our US citizens have been pushed to the lowest SS monthly payment because of these earlier designations. Literally, hundreds of millions of Americans are getting less than half of these pre-paid benefits paid as payroll taxes.
States like Maryland doing this attack on EQUAL PROTECTION BENEFITS-----offer as a BANDAID tax-free status on what is left. Remember, the Federal government sends the full amount a state citizen is supposed to receive---then states have been allowed to select what groups get SS, VET, Disability, Medicare----We can bet like Maryland, these states below defrauded their seniors of full benefits----and the BONE is not taxing now super-low monthly payments----such as $750 a month.
'All Retirement Income:
states with a broad-based income tax (Illinois, Mississippi, and Pennsylvania) fully exempt all retirement income
from taxation. This includes private and public pensions, Social Security, and annuities'.
For those US citizens still getting pensions---we know these bubble and bust economics of global neo-liberalism killed any gains over and over----and this coming municipal and US Treasury bond fraud will wipe out pensions-----so what's a little tax break for those seeing their retirements fleeced with fraud over and over?
Below we see the URBAN INSTITUTE partnered with the BROOKINGS INSTITUTE------to tell us its time for tax reform ----decades after these bad tax policies were installed. It also shows how OUR US CITIES DEEMED FOREIGN ECONOMIC ZONES have an urban institute tied to global Wall Street. Not working for US city citizens----working for global 1%.
- © Urban Institute, Brookings Institution, and individual authors, 2016.
How do phase outs of tax benefits affect taxpayers?Individual Income Tax<2/3>
Q.How do phaseouts of tax provisions affect taxpayers?
A.Many preferences in the tax code phase out for high-income taxpayers—their value falls as income rises. Phaseouts narrow the focus of tax benefits to low- and middle-income households while limiting revenue costs, but raise marginal tax rates for affected taxpayers.
Many preferences in the tax code are phased out (meaning their value is reduced as income rises) for higher-income taxpayers as a way to target tax benefits on middle- and lower-income households and to limit the loss of revenue. Phaseouts, however, not only claw back these benefits from the more affluent, they also increase the effective marginal tax rate these taxpayers face, decreasing the after-tax gains of earning more income.
Some taxpayers are affected by multiple tax provisions phasing out at the same time, compounding the negative impact on their earning incentives. More broadly, phaseouts complicate the tax code and make it more difficult for taxpayers to understand the taxes they pay.
How Do Phaseouts Work?
Phaseouts are structured in different ways and thus have different effects. Some reduce credits and thus have the same impact on all affected taxpayers. Others reduce deductions, in which case their quantitative impact depends on the taxpayer’s marginal tax rate: the higher the tax rate, the greater the value of the lost deduction.
Phaseouts reduce tax benefits at different rates depending on their structure and range (table 1). Most phaseouts reduce benefits at a constant rate over an income range; that rate depends on the width of the range. For example, for single tax filers, the American Opportunity Tax Credit phases out evenly over a $10,000 range, so its phaseout rate is 1 percent per $100 in additional income. In contrast, the adoption credit phases out over a $40,000 range, so its phaseout rate is one-fourth as fast—just 0.25 percent per $100.
Some phaseouts, however, reduce benefits by a specified amount for each fixed increment of income. For example, the child tax credit decreases by $50 for every $1,000 or part of $1,000 in additional income above the phaseout threshold. Whether income exceeds the threshold by $1 or by $999, the credit falls by the same $50, so earning a few more dollars could make a taxpayer worse off.
Some phaseouts have more pronounced cliffs, so the benefit drops in large increments when income exceeds the threshold. For example, in 201, the limit on the deduction for higher education tuition and fees drops from $4,000 to $2,000 for a single tax filer if income exceeds $65,000 by even $1, and then drops to zero when income tops $80,000. Again, just a few dollars of additional income could leave a taxpayer whose income is near the cliff much worse off.
Many phaseouts are indexed for inflation so that the phaseout ranges remain fixed in real terms. Phaseouts that are not adjusted for inflation affect more taxpayers over time, as inflation raises nominal incomes and thus lifts more taxpayers above the phaseout thresholds.
How Phaseouts Create Marriage Penalties and Bonuses
Many phaseouts create significant marriage penalties—or bonuses—because the phaseout range for married couples is less than twice that for single tax filers. For example, in 2017 the phaseout of personal exemptions begins at $313,800 for married couples filing jointly, less than twice the $261, 500 threshold for single filers. Consider a couple in which each spouse has income of $200,000. The phaseout would not affect either spouse if they were not married—each would have income under the single threshold—but as joint filers they lose 70 percent of their combined $8,100 personal exemptions, increasing their taxable income by nearly $5,700.
Phaseouts can also create marriage bonuses, reducing a couple’s combined tax bill. For example, if one spouse has $300,000 of income and the other spouse has none, their combined income would be under the $313,800 threshold for reducing exemptions for joint filers in 2017. If they were single, the high-earning spouse would lose 32 percent of her personal exemption, which would increase her taxable income by nearly $1,300.
Phaseouts also impose marriage penalties on low-income families, and those penalties are often a larger percentage of their income than the marriage penalties caused by phaseouts for higher-income taxpayers.
In 2016, a single mother who earns $17,450 and has one child pays no income tax and receives two refundable credits—a $1,000 child tax credit (CTC) and a $3,373 earned income tax credit (EITC) (table 2). If she marries a man making $40,000—whose 2016 income tax as a single person would be $3,984—she would lose all of her EITC (the couple’s income would cause the credit to phase out completely) but would retain her CTC. Losing the EITC means that the couple would pay $2,978 in income tax when married, compared with receiving a net payment of $354 (her $4,349 combined credit minus his $3,995 tax) if they remained single. That difference is a marriage penalty of $3,332, or 5.8 percent of the couple’s adjusted gross income.
 The married couple’s bonus would be even larger because, having no income, the nonearner could not benefit from the personal exemption. Filing jointly, the couple would get the full value of both spouses’ exemptions.
 In 2016, a single mother with one child begins paying income tax (before credits) when her income exceeds $17,450—the sum of her $9,350 standard deduction for a head of household and personal exemptions for herself and her child totaling $8,100.
What the Brookings Institute CLINTON/BUSH/OBAMA is trying to say is this: since massive unemployment is getting ready to hit the US especially in our US cities----people having NO INCOME TO TAX-----the shift of taxation is now being installed to hit the affluent---those upper-middle and newly rich will be the one's paying off all that US Treasury and Maryland state bond debt over 30 years.
Now, it is NOT LEFT SOCIAL PROGRESSIVE to work to leave 99% of US citizens unemployed and unable to pay taxes------but global Wall Street sells this as HOLDING THOSE MORE WEALTHY ACCOUNTABLE TO TAXATION.
At this point that bracket of upper-middle and newly rich is 10% -----that 5% is going under the bus and heavy taxation will put them there.
'Many preferences in the tax code are phased out (meaning their value is reduced as income rises) for higher-income taxpayers as a way to target tax benefits on middle- and lower-income households and to limit the loss of revenue. Phaseouts, however, not only claw back these benefits from the more affluent, they also increase the effective marginal tax rate these taxpayers face, decreasing the after-tax gains of earning more income'.
So, PHASEOUT tax policy claws back wealth already earned ---funny, WE THE PEOPLE were not allowed to CLAW BACK MASSIVE WALL STREET AND CORPORATE FRAUD with these same tax policies.
DEFINITION of 'Phase Out'
1. The gradual reduction of a tax credit as a taxpayer approaches the income limit to qualify for that credit.
2. The gradual reduction of a taxpayer's eligibility to contribute to a tax-advantaged retirement account as the taxpayer approaches an income limit.
BREAKING DOWN 'Phase Out'1. For example, the federal Child Tax Credit begins to phase out for married taxpayers filing jointly when their modified adjusted gross income (MAGI) reaches $110,000. If their MAGI falls below this number, they can claim the full credit. If it falls above this number, the credit is gradually reduced until the income limit is reached. Above that limit, the taxpayer cannot claim the Child Tax Credit.
2. In 2009, single taxpayers whose MAGI was more than $55,000 could not fully deduct contributions to a traditional IRA from their taxes. This tax credit phased out for MAGI between $55,000 and $65,000, meaning that contributions were only partly deductible. Single taxpayers with MAGI above $65,000 could not deduct their traditional IRA contributions from their taxes at all.
If you are the working class and poor thinking you win when these shifts to upper and affluent occur-----WAKE UP---it simply means 99% of US citizens are soon going to be too poor to tax. These salaries are those shifts to an ever-smaller group of citizens being paid VERY HIGH SALARIES----while 99% of citizens are paid almost no salaries.
As their income grows, most physicians realize that the tax brackets don’t tell the whole story. There are a plethora of tax breaks that lower your tax bill substantially, but as income increases, you become ineligible for them due to phase-outs. This has the indirect effect of raising your marginal tax rate. This page will discuss each of these, and their consequences on you.
Earned Income Credit – $13,660-43,998
This one applies mostly to medical students, unfortunately, as most are phased out even on a resident’s salary. It is designed to encourage people to get off welfare and work for a living. This refundable credit can be worth up to $5471 in 2011. You are no longer eligible for it if you are single without children once you make more than $13,660. Even if married with 3+ children, you are phased out at $43,998.
Social Security Benefit Taxation – $25,000-44,000
Not only are you taxed on the money you use to pay into social security, you’re also taxed on most of it as it is paid out. But if your “combined gross income” (which includes your regular income, your tax-exempt interest, and 1/2 of your social security benefits) is more than $25,000 (single) or $32,000 (married) you’ll be taxed on it. You never get taxed on all of it, as the maximum amount you pay tax on is 85% of your benefit if your income is above $34,000 (single) or $44,000 (married.) Just plan on paying tax on most of your social security in retirement.
Individual Retirement Arrangement Deduction – $56,000-$110,000
You can only deduct contributions to IRAs under two circumstances. First, have no retirement plan at work such as a 401K. Second, make less than a certain amount. In 2011, the phase-out is $56-66,000 for singles and $90-110,000 for married. You can still do non-deductible contributions, but your best bet if you’re in this situation is a Backdoor Roth IRA. Even if you don’t have a plan at work, if your spouse does your contribution is still limited if your household income is over $169,000.
Roth IRA Contribution Limit -$107,000-179,000
Your ability to contribute to an IRA phases out between $107-122,000 for singles and $169-179,000 for married. But never fear, you can still do a Backdoor Roth IRA thanks to laws passed in 2010.
Saver’s Credit -$17,000-56,500
This is a great idea; you can get up to $1000 from the government just for putting $2000 in a Roth IRA or your 401K. Unfortunately, almost no one gets it in any significant amount. Those who qualify for it don’t make enough to save much of anything for retirement. Those who can save for retirement make too much to get the credit. It phases out at $17,000-28,250 (single) and $34,000-56,500 (married.) To make things worse, it is a non-refundable credit. Most of the people who qualify to get it really aren’t paying anything in taxes anyway. Good idea. Bad implementation.
Student Loan Interest Deduction -$60,000-150,000
This one is a dirty trick by the government in my opinion. You go to school and learn something that will contribute to society and the economy. They let you defer your loans until you start making decent money, then, as soon as you become successful and the interest actually starts accumulating, you can no longer deduct the interest on the loans. This phase-out ranges from $60-75,000 for singles and $120-150,000 for married. The deduction is also limited to $2500 per year. So when taking out $200,000 in loans to pay for medical school realize that you’ll probably never get any tax benefit from those loans. Unlike most mortgages, your after-tax rate will be exactly the same as your pre-tax rate.
Hope Scholarship/American Opportunity Credit and Lifetime Learning Credits -$60,000-180,000
These are non-refundable credits you get for paying for yourself or your kids to go to school. Unfortunately, many doctors don’t get these. The American Opportunity Credit can pay you up to $2500 per student for up to 4 years of school, but phases out at $80-90,000 for singles and $160-180,000 for married. The lifetime learning credit, which can pay up to $2000 per return, phases out even earlier- $60,000 for single taxpayers and $120,000 for married, but at least it can be used if the student stays in school longer than 4 years. So for most doctors, you can’t use them for yourselves because they’re non-refundable, and you can’t use them for your kids because you make too much. Although some married primary care physicians may slip in under the new $180,000 limit for the American Opportunity Credit, especially if you are cutting back on your practice at the same time your children are in college.
Coverdell Education Savings Accounts (ESAs or Education IRAs) Contribution Limit -$95,000-$220,000
These are post-tax investment accounts that allow your money to grow tax-deferred and, if used to pay for educational costs, taxes are not due when the money is withdrawn. The ability to contribute to them phases out at $95-110,000 for singles and $190-220,000 for married. This isn’t that big a deal, as the newer 529 plans are superior to the ESAs in almost every way. They allow for higher contributions ($13,000 instead of $2000 per year), they are often state-tax-deductible, and there is no income limit for contributions. Although their expenses are slightly higher and investment choices are slightly more limited than an ESA at a low-cost mutual fund company, most people should probably still be using 529s over ESAs.
Education Savings Bonds – $85,100-135,100
You don’t have to pay taxes on the accrued interest of US Savings Bonds if you use them for educational purposes for you or your dependents. Unless you make more than $85,100 (single) or $135,100 (married.)
Education Tuition and Fees Deduction -$65,000-160,000
You can deduct up to $4000 worth of educational expenses from your taxes if you make less than $65,000 (single) or $130,000 (married.) That deduction is reduced to $2000 if you make $65-80,000 (single) or $130-160,000 (married.) Above those limits, there is no deduction.
Child Tax Credit – $75,000-$130,000
The child tax credit is worth up to $1000 per child. The credit phases out at $75-95,000 for singles and $110-130,000 for married. Sometimes this credit can even be refundable, but the rules on that are pretty complicated and don’t really apply to most doctors anyway. Don’t feel too badly about losing this one, it is supposed to be reduced back to $500 in 2013 anyway. At least you still get the exemption for the child.
Child and Dependent Care Credit – $15,000-43,000
If you make less than $15,000 (married or single), you get to deduct 35% of your childcare expenses. If you make more than $44,000, you only get to deduct 20%. This one probably only applies to students and residents with children.
Adoption Credit – $185,220-225,220
It turns out it costs a lot of money to adopt a child. You can get a refundable credit of up to $13,170 for your expenses. Unless your income is above $185,220-225,220, at which point you can’t. I guess the government prefers children to be adopted by lower income families. Yet another one of those unintended consequences of government policies.
Personal and Dependent Exemptions – None!
Luckily, this one only affects some physicians. You know that $3700 you get to deduct from your income for each member of your family? It used to be that this deduction phased out between $156,400 and $278,900 for singles and $234,600 and $357,100 for married. The phase-out was eliminated for 2010-2012, and is then scheduled to return.
Itemized Deductions -None!
Another dirty rule of the IRS. They tell you that you’ll get a deduction for buying a house, paying for medical costs, giving money to charity etc. Then they start limiting those deductions as your income goes up. The good news? This phase-out was eliminated for 2010-2012 as well. Stay tuned to see if it comes back. Hopefully not, as the phase-out began at $156,400 for both married and single in the past.
Alternative Minimum Tax Exemption -$47,450-$362,250
Why have just one tax system when you can have two? Due to all the tax deductions and credits authorized over the years by Congress, some bright people have been able to reduce their taxes to amounts that Congress now considers unfair. So they instituted a “minimum” tax amount. So after spending hours figuring out how much you owe each year, you have to check and see if you would owe more under the alternative minimum tax system, then pay whichever tax turns out to be higher. Factors that increase the likelihood of paying alternative minimum tax include: Higher income, married status, more children, and higher state taxes. As part of the process of determining your AMT, you exempt part of your income from the calculation. The amount you can exempt goes down as your income goes up. The current threshold is $47,450 for singles and $72,450 for married. Your exemption is reduced by 25% of the amount of income you made over the exemption amount. That’s a complicated way of saying that as your income increases from $47,450 to $237,250 (single) or from $72,450 to $362,250 (married), you become more likely to have to pay the alternative minimum tax.
So what can you do about all this? For most of it, very little. However, lowering your adjustable gross income by putting money into retirement plans can make you eligible for deductions or credits you would otherwise be phased out of. Sometimes just putting a few extra bucks into your 401K can save you thousands in taxes. So it is important to be familiar with the phase-outs that are near your income range to spot possible tax savings.
If your specialty has little fixed overhead, you may also consider part-time work more attractive than you otherwise would given the much lower overall tax rates possible by taking advantage of tax breaks you would otherwise be phased out of. It is important to note that there is never a point in the tax code where your after-tax income goes down when you make more money, but the law of diminishing returns is definitely in effect as your income climbs through the tax brackets and especially these phase-outs.
As with all deregulation of financial services during Clinton era-----banking and financial services exist to fleece the poor. That is Clinton's MANTRA-----FLEECE THE POOR----
We see Child Tax Credits---Earned Income Tax Credits these few decades higher for our working class we are told to assure more income while wages are being lowered to third world levels. At the same time these low-income workers are the ones not knowing the tax system.....they are also the one's tied to PAYDAY LOAN BANKING-----so are often desperate to get money as fast as they can. Who gets most of those TAX CREDITS AIMED AT LOW-INCOME? Pay Day Loan and Tax Prep corporations.
IF WE THE PEOPLE THE 99% KEEP ALLOWING OUR WORKING CLASS AND POOR BE FLEECED OF ANY INCOME THEY CAN GENERATE---HOW CAN WE EXPECT PEOPLE TO BOOT-STRAP THEMSELVES TO STABILITY?
We have known this has been happening these few decades----those NGOs saying they are helping to protect against fraudulent tax preps are silent on tax policy MOVING FORWARD BEING VERY, VERY, VERY BAD FOR ALL 99% OF AMERICANS. Don't worry---those far-right wing global Wall Street NGOS and pols will be really made AFTER this coming decade of fraud and unemployment occurs.
‘Instant’ tax refunds offer quick cash — but who really benefits?
- Submitted by the Iowa Attorney General’s Office
- Apr 4, 2017
“If you’re expecting a tax refund from the IRS, do you want the refund now or later?”
If the question were really that simple, of course it’s an obvious answer.
Unfortunately it’s not that simple, and here’s the real question: “If you’re expecting a tax refund from the IRS, do you want the refund now or later, knowing that you’ll likely pay high fees for receiving a refund only a few days or weeks early?”
Some tax preparation services offer you the option of receiving an “instant” advance tax refund, which may be in the form of a check or prepaid card. Tax preparers may even tell you their advance refund service is free. But make no mistake — somehow you’ll pay for what is essentially a short-term, high-interest or high-fee loan.
Preparers might use different names for fees they charge, including processing, application, technology, document or administration fees. Perhaps the advance tax refund fees are hidden — the preparation service simply adds the cost to its overall price of preparing and filing your tax return. The law forbids preparers from basing fees on a percentage of the refund amount, or computing their fees using any figure from a tax return.
Several years ago, the Internal Revenue Service and federal regulators cracked down on “refund anticipation loans,” or RALs. RALs were costly short-term, high-interest loans based on taxpayers’ anticipated income tax refunds. While newer products may use names like “refund anticipation checks,” “instant” refunds or “quick” refund cash, the old saying that “there’s no such thing as a free lunch” very much applies.
Before agreeing to an instant refund, consider this:
• According to the Internal Revenue Service, the IRS should issue your refund within three weeks if you file your return electronically (e-file), and faster when you choose direct deposit. Here you get your full refund, and you won’t pay listed or hidden fees for getting an expected refund a little more quickly.
• Understand that you are responsible for paying the loan or “instant” refund amount if your tax return is less than anticipated or you do not get a refund.
• If you seek cash quickly so you have money to buy something now, think about options other than advance tax refunds. Are there any credit or promotional options that you can take advantage of?
• If you are determined to seek an advance tax refund, check with several tax preparers and get an estimate regarding your tax preparation and advance refund costs — including clear explanations about their fees. Check on a tax preparer’s credentials, including the preparer’s educational background and professional experience, and make sure your preparer is registered with the IRS. Conduct an internet search on tax preparers you are thinking of doing business with to see if there are complaints.
• Be wary of getting an advance refund through a prepaid card. These cards often cost you money through transaction fees each time you withdraw cash, and may set maximum per-transaction withdrawal amounts.
Those seeking additional information should contact the Iowa Attorney General’s Consumer Protection Division, 1305 E. Walnut St., Hoover Building, Des Moines, IA 50319 or by telephone at 515-281-5926. Those living outside the Des Moines area can call toll free at 888-777-4590 or email email@example.com.
GUESS WHAT? Tax laws are being installed that require tax refunds go onto PREPAID CARDS/DEBIT CARDS
' Be wary of getting an advance refund through a prepaid card. These cards often cost you money through transaction fees each time you withdraw cash, and may set maximum per-transaction withdrawal amounts'.
Left social progressives do not give tax breaks to low-income and then create deregulated banking and finance corporations ready to fleece them of all refunds.
The fact that corporations like this exist is global Wall Street and their 5% to the 1%. The fact that Federal laws are being installed that require all Federal programs including IRS do direct deposit and offer to do so onto DEBIT CARDS----is setting the stage for the next round of global Wall Street frauds and fleecing. These CLINTON/BUSH/OBAMA pols pass tax laws designed specifically to fleece the 99% of Americans.
Get a Faster Tax RefundWhen you e-File with the IRS and have your refund direct deposited to a Netspend® Prepaid Card, you can get your tax refund faster than a paper check.
Card usage is subject to card activation and identity verification.
ConvenientWhen you Direct Deposit your tax refund, you don’t have to wait around for a check (or wait in line to cash it)—and because there’s no paper check involved, your refund can’t get lost in the mail.
Done in a few steps.
- If you haven’t already ordered a Netspend Prepaid Card, that’s your first step. Be sure to activate your Card and verify your identity when it arrives in 7-10 days.*
- Select Direct Deposit on your tax form (or select the direct deposit option if filing online) to receive your refund when filing your taxes.
- Enter your Netspend Prepaid Card routing and account numbers in the designated fields, and choose “Checking” as the account type.
For those citizens having DISDAIN for others who are fall into these fleecing patterns------the fleecing today by this tax refund system may hit our poorer citizens TODAY---but we will all be pushed onto online only direct deposit of tax refunds and global online banking will not allow ANY TAX REFUNDS to make it to WE THE PEOPLE THE 99%.
- This is why we shout----people thinking they are WINNERS TODAY-----will be the LOSERS tomorrow if we keep MOVING FORWARD.
Mar 12, 2014 @ 01:33 PM 8,354 2 FREE Issues of Forbes
Should You Put Your Tax Refund On A Prepaid Card
We help you make sense of your finances.
Opinions expressed by Forbes Contributors are their own.
Curtis Arnold, Contributor
By Curtis Arnold and Lucy Lazarony
All the major tax preparation companies give you this option, but does it make financial sense? Here’s a look at the pros and cons of receiving a tax refund via prepaid cards with direct deposit.
Fast access to your tax refund. Need a faster tax refund? E-filing your return and requesting a tax refund be sent to a prepaid card with direct deposit or a bank account is the fastest way to go, according to the IRS website. The IRS is issuing refunds to taxpayers in as few as 10 days for those who e-file and opt to receive their tax refund by direct deposit.
“Direct deposit is typically better,” says David Newville, senior policy analyst at the Center for Financial Services Innovation. “You’re going to get it quicker and it’s going to be more secure than a check.”
Pocket that tax refund, pronto! (Photo credit: Tax Credits)
Keep tax refund money separate from other accounts. Have a special project in mind for that tax refund but worried the money will disappear quickly amid your day-to-day spending? Putting a tax refund on a prepaid card will keep the money separate from your other accounts.
“You might not want to dump it into a bank account because it might get lost in day-to-day charges,” says Ben Jackson, a senior analyst at the Mercator Advisory Group.
Watch out for fees. The biggest downside to receiving your express EXPR -1.85% tax refund on a prepaid card is the assortment of fees associated with prepaid cards.
Joe Ridout, a spokesman for Consumer Action, a San Francisco-based consumer advocacy group, sees no advantage to receiving a tax refund on a prepaid card, especially for people with bank accounts who could simply opt to receive a direct deposit of their tax refund into a checking or savings account.
“If you have a bank account, there’s no advantage whatsoever to getting your tax refund on a prepaid card,” Ridout says. “You needlessly would forfeit some of your tax refund with the fees that come with these cards.”
Ridout added that prepaid cards may be appealing to consumers without bank accounts but the fees associated with prepaid cards can make them a costly choice. “The best money saving solution for consumers is to open a bank account,” Ridout says. “Because these cards are a solution that will cost you money.”
Still, opening a bank account may simply not be possible for some people. And while it is certainly true that far too many prepaid cards charge fees that don’t make a speedy refund a wise choice, there are some exceptions. Shane Tripcony, of BestPrepaidDebitCards.com commented, "Typically, bank accounts such as free checking accounts are cheaper to operate, but for some people, the built-in limitations such as no overdraft fees make prepaid debit cards a viable alternative. As fewer banks are offering free checking accounts, the prepaid card option becomes a good choice, despite differences in fees. It is all in how you will use the account."
In fact, if you are considering a prepaid card for your tax refund, here are some low-fee options that will take the smallest bite out of your money.
Serve from American Express AXP -0.21%. There simply aren’t many fees associated with Serve, American Express’s consumer-friendly prepaid debit card. There’s no activation fee, it’s easy to dodge the $1 monthly account charge and, importantly, cash withdrawals from MoneyPass ATMs are also free. It’s easy to get your federal tax refund sent quickly to your Serve account and, yes, there’s no charge.
U.S. Bank Convenient Cash Card. Another good option, particularly if you live in an area with plenty of U.S. Bank ATMs, is the U.S. Bank Convenient Cash Card. Like most prepaid debit cards, it’s a snap to get your tax refund loaded for free onto a U.S. Bank Cash Card. But what sets it apart from other options is that cash withdrawals from U.S. Bank ATMs are free, as are direct deposit and bill pay.
Chase CCF +% Liquid. With 5,500 Chase branches nationwide, it’s easy to withdraw the tax refund you get loaded onto the Chase Liquid prepaid card without incurring an unwanted ATM charge. For a $4.95 monthly account charge, Chase Liquid makes it simple to avoid a long list of other fees as well. It makes the card a worthy option for receiving a quick, relatively fee-free tax refund.
But remember, because fees on prepaid cards vary so widely, it’s important to study the terms and conditions on prepaid cards carefully before signing up for one.
Just as global Wall Street CLINTON/BUSH/OBAMA now TRUMP promote SMART METERS-----for our home energy and water as GOOD FOR ENVIRONMENT---GOOD FOR CITIZENS SAVING MONEY-----so too are these tax refund structures being sold as EASY AND EFFICIENT.
Again, we KNOW MOVING FORWARD has a goal of global online banking only------we know all wages, retirement payments----tax refunds will force DIRECT DEPOSIT -----and we know it will be these PREPAID DEBIT CARD STRUCTURES that do this. When my bank saw I was not CHIPPED----they were insistent I be CHIPPED with my debit card.
These are what our national media and corporate universities call INNOVATIVE TECHNOLOGY------all of it has a goal of being very, very, very, very REPRESSIVE.
Sadly, it is those pesky 5% to the 1% global Wall Street players often pushing low-income to these products and then sit back getting stock dividends on all that fraudulent profit----thinking they are WINNERS.
Get Your Tax Refund With Prepaid Debit Cards
Kari Luckett, Updated on Apr 01, 2016
*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
Receiving your tax refund as fast as possible is preferred by most American’s, but that’s especially true for those who file late. According to the IRS, seven out of ten refunds were received in the form of a direct deposit last tax season. But did you know direct deposits aren’t just for traditional checking accounts?
Receiving your tax return on a prepaid card is a great alternative for those who don’t have a traditional checking account and don’t want to wait for their check via snail mail. Below is a list of prepaid debit card options available for those who want to receive their tax refund quicker, in the form or a direct deposit. Some even offer a cash back bonus if you have your refund deposited onto their prepaid card.
Get Your Tax Refund Faster
It’s important to keep in mind that you won’t receive your tax refund faster with any of the below prepaid offers because they have some special relationship or partnership with the IRS. The refund may be received faster because direct deposit will always be faster than a paper mailed check.
Most of these prepaid offers require the name on the card account to match the name on the tax refund, so if you filed a joint tax return, make sure both of your names are on the account. Some will come with additional fees to process the transaction and spending limitations, which may sway you one way or another on which card to choose.
NetSpend Corporation has a few cards that promote a faster refund, including:
$10 off coupon for your tax refund check cashing fee. Offer expires April 1, 2015.
The Account Now Prepaid Card promises a fast refund with ezTaxReturn.com. Account Now is also running a sweepstakes now through April 30, 2015, giving consumers a chance to triple their tax refund. There are three ways you can enter to win, one of which is by directly depositing your federal or state tax refund. Read the official rules for eligibility requirements and more information.
The Readydebit Platinum Visa Prepaid Card also states that consumers can deposit their tax refund onto the card, which are FDIC insured up to $250,000, and comes with credit monitoring. The bank routing number and Account Number can only be used for authorized ACH debit transactions, and not for debit transactions that are converted into a paper check, check-by-phone, or other item processed as a check.
Receive Bonus Cash Back With Direct Deposit
Some prepaid cards offer a cash bonus for those who directly deposit their tax refund. Those who are current RushCard members or those who would like to apply for a prepaid Rushcard, you’ll receive your tax refund up to two days faster. Cardholders will also receive $20 cash back when they directly deposit their tax refund. With Visa Zero Liability Policy, your funds will be protected if your card is lost or stolen.*
Cardholders will need their routing number and account number in order to perform the deposit. The name on the tax return needs to match the name on the account. There is a spending limit of $2,500 on all POS and ATM transactions within a 24-hour period. Read the full terms and conditions for fees and additional details. Check out the available RushCards by visiting our website.
TurboTax & State Refund Options
If you filed with TurboTax, you can receive your tax refund on a NetSpend Premier Prepaid Card. When filling out your taxes with TurboTax.com, simply select to receive your refund on a NetSpend Premier Visa Prepaid Card and the card will be delivered by snail mail for you to activate and use.
Those residing in the state of Virginia already have the convenience of a direct deposit. Since tax year 2012, all individual tax refunds are issued in one of two ways; as a direct deposit into the tax payer’s bank account, or they may opt to receive a debit card, the Virginia Tax Refund Debit Card. The Act was passed to reduce printing and postage costs, but also seems to put an end to lost or stolen paper checks sent via snail mail. States such as Connecticut, Georgia, Louisiana, New York, Oklahoma, and South Carolina allow taxpayers to receive their state tax refunds on a prepaid debit card issued directly from the state. Check with your state's tax or revenue department online to find out.
Some states have also rejected tax returns filed electronically through Intuit (TurboTax.com) due to recent fraudulent activity with the program. This only affected state tax returns and not federal returns.