Should I be paying this much in taxes?!?

[eliquid]

I will tell you this, talking to a CPA/tax professional is NOT enough.

I've had/talked to dozens of CPA's and tax attorneys over the last decade. All of them suggest something different and none of them have suggested the same thing.

Many just run your numbers with no advice or generic vanilla advice. Others don't understand or know a lot about your business ( crypto, SaaS models, etc ). Some only suggest what someone else in their firm told them.

You need to kiss a lot of frogs and do this often, to find the right person.

I had to dig into things myself and learn a lot on my own, then go to the people I talk to and ask more questions in order to get the right strategies for me. If I didn't dig into this on my own, I wouldn't have known about R&D credits last year at all because no one else was even telling me about them or offering them up as suggestions. Other things like this, etc.

It's hard to find someone that isn't just "another bland CPA" on the street corner. Knowing which questions to ask is also a tough deal because what you dont know, you dont know.

.

 

[MJ DeMarco]

I'm actually surprised you're not paying more.

 

[Rabby]

Cut to scene - government bureaucrats dancing to the song "We're in the Money." Tears stream down citizen's faces as the crats enjoy cake and champagne. Ragamuffin children stand outside, hungry and dirty.​

Enter AF77, eyes wide.

AF77: What in the world is going on here?

Bureaucrat #1: No big deal, mate! We're just having a celebration, that's all.

AF77: But who's paying for all this?!

Bureaucrat #2: Why, you are mate!

Bureaucrat Chorus: Laughter.

 

[CareCPA]

My joking comments aside, @Rabby is giving the most useful advice. Regardless of country, once you hit a certain tax bracket, a tax advisor will save you more money than they cost. And it they don’t at least you know you’ll have done all you legally can. I’m sure your tax system also has funky deductibles you may not be aware of that could reduce your tax burden.

In the US, if you're just a W-2 employee, then there isn't much tax planning. Not worth the cost of a CPA unless you're $300k plus (then you get into conservation easements and other fun things).

Own a business. Otherwise, you're SOL.

 

[jpn]

I don’t live in a socialist or communist country.

[Edit]
On second thought, lets not risk making this political. It was intended in jest anyway.

 

[ZCP]

are you in the US? go to irs.gov .... download form 1040 and the instructions. physically fill out your tax return and see 'why'. then run a few scenarios and see what other options for income vs how it is taxed ....
then get w/ your tax professional and see if there is something you are missing....

the gist .... w2 income is heavily taxed. THEN you pay for your stuff w/ post tax money. .... not fastlane

 

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[biophase]

If you are only paying 20% in taxes, you will definitely owe more at the end of the year.

In your tax bracket it's common to have about 33% taken out of your paycheck and then get back a little bit of money at the end of the year.

But your overall yearly tax from your paycheck will be between 25-30% usually. So expect to have more taken out as you move up the income ladder.

 

[AF77]

To complain about the tax is useless, it's something that everyone endures.
For your road to wealth, it is better not to complain.

I don’t believe everyone gets raped, and I don’t see worrying about or trying to prevent the theft of a fifth of your income as “complaining”.

 

[Rabby]

Thread is derailed in 3... 2... 1...

Ok but before that happens. Seriously, it's worth talking to a CPA. Make sure you're taking the write-offs you can take, and do some research on tax credits and deductions that apply to your industry. For several years I was able to take a "domestic production" credit which was great. In the US. It's been repealed now I think, but it was good while it lasted, and most people didn't even know it existed.

 

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[jpn]

Thread is derailed in 3... 2... 1...

Ok but before that happens. Seriously, it's worth talking to a CPA. Make sure you're taking the write-offs you can take, and do some research on tax credits and deductions that apply to your industry. For several years I was able to take a "domestic production" credit which was great. In the US. It's been repealed now I think, but it was good while it lasted, and most people didn't even know it existed.

My joking comments aside, @Rabby is giving the most useful advice. Regardless of country, once you hit a certain tax bracket, a tax advisor will save you more money than they cost. And it they don’t at least you know you’ll have done all you legally can. I’m sure your tax system also has funky deductibles you may not be aware of that could reduce your tax burden.

 

[GoGetter24]

With all respect but this seems quite low. Here you pay 51% of every 'dollar' you make.

Even the Helots, the slaves of the Spartans, got to keep half of what they made.

Interestingly, they couldn't own weapons either -- only the state (the Spartans) could do that. For reasons not unconnected to the 50% tax bit...
The more things change the more they stay the same.

 

[AF77]

I make 134,000 a year on paper.

My take home every other week is 4,124.00
My actual income before taxes is 5,108.00

I get over 900 dollars taken out every two weeks! That’s a F*cking fifth of my income.

AND, I always OWE money to the irs at the end of the year.

I have two small children and I am married.

Edit: I was a bit off, Exact numbers:

 

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[Kevin88660]

You would have paid slightly less if you move to Singapore.

 

[Thimar Laouichi]

To complain about the tax is useless, it's something that everyone endures.
For your road to wealth, it is better not to complain.

 

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[jpn]

Interesting, I just ran your income through an income tax calculator for my country.

Of the 5108 you get every 2 weeks you'd take home 2835. Also sales tax in this country is 21%.

Only 2 things are certain in life, death and taxes. And it could be a lot worse.

 

[Rabby]

If you're self employed / own a business, it's worth hiring a CPA. Mine pays for himself and then some.

 

[AF77]

Interesting, I just ran your income through an income tax calculator for my country.

Of the 5108 you get every 2 weeks you'd take home 2835. Also sales tax in this country is 21%.

Only 2 things are certain in life, death and taxes. And it could be a lot worse.

I don’t live in a socialist or communist country.

 

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[wordwarrior]

I live in the most taxed jurisdiction in North America with a 53% marginal income tax rate when you combine federal and provincial taxes.

 

[ExaltedLife]

No, you shouldn't be taxed at all, but you are. Look into how to dodge them without getting caught.

 

[ExaltedLife]

Our government is just too F*ckin' big, bureaucratic and inefficient.

This book has helped me see the potential in having something else in place other than the 2 choices we seem to have now.

Something needs to change.

Just read the description alone and see if it doesn't intrigue...

I'm a convert (although I do dig what Andrew Yang has had to say, recently).

Libertarians are onto the right track but not quite - they don't have much of a political philosophy. Read "Capitalism: The Unknown Ideal".

 

[AfterWind]

In my country it's more like 30%, no matter the rate they pay you.

Although, I'm sure there are some workarounds in Europe, whenever I see, for example 70k euros a year salary, I just divide that number by 2 because taxes. Better underestimate than overestimate in this case.

I think 20% is okay.

 

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[Jaden Jones]

I live in the most taxed jurisdiction in North America with a 53% marginal income tax rate when you combine federal and provincial taxes.

This!!! In canada you would pay twice that, not as much in my province as his. But I make about the same as you and I pay about 47%

 

[Schwarz]

You should come to Belgium. They love ripping you off here. If the 30-50% income tax rate has not convinced you, then I am sure the 21% VAT or 34% corporate tax rate will do the job.

 

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[CrimsonNight]

It is like 50% here in Sweden if you earn around 487 600 SEK (52 446 USD). Add an additional 20% on the amount over that.

Of course, there are several ways to avoid this large amount of taxes but most people still pay that much.

 

[AF77]

I can’t believe I don’t get any of that back and I owe money every year.


Sent from my iPhone using Tapatalk

 

[AF77]

I'm actually surprised you're not paying more.

OUCH.

From the man himself.

So basically this is normal, I should continue to feel robbed, and assume suicide is the only escape?

Every time I get a 6% raise it gets cut in half by taxes.

 

[AF77]

If you are only paying 20% in taxes, you will definitely owe more at the end of the year.

In your tax bracket it's common to have about 33% taken out of your paycheck and then get back a little bit of money at the end of the year.

But your overall yearly tax from your paycheck will be between 25-30% usually. So expect to have more taken out as you move up the income ladder.

Very useful knowledge.
So essentially with minor 3%-6% bumps, I’m making 5 dollars more a week.

 

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[TonyStark]

OUCH.

From the man himself.

So basically this is normal, I should continue to feel robbed, and assume suicide is the only escape?

Every time I get a 6% raise it gets cut in half by taxes.

Yes

 

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[focusedlife]

No, you shouldn't be taxed at all, but you are. Look into how to dodge them without getting caught.

Our government is just too F*ckin' big, bureaucratic and inefficient.

This book has helped me see the potential in having something else in place other than the 2 choices we seem to have now.

Something needs to change.

Just read the description alone and see if it doesn't intrigue...

I'm a convert (although I do dig what Andrew Yang has had to say, recently).

 

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[AF77]

Our government is just too F*ckin' big, bureaucratic and inefficient.

This book has helped me see the potential in having something else in place other than the 2 choices we seem to have now.

Something needs to change.

Just read the description alone and see if it doesn't intrigue...

I'm a convert (although I do dig what Andrew Yang has had to say, recently).

I overly enjoyed law abiding citizen until the end; guess who I was rooting for?