Comments on: Make Over $200,000 And Pay No Income Tax? http://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/ A place to discuss money...for the rest of us. Fri, 10 Feb 2012 05:21:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: John Enrighthttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-36460 John Enright Tue, 25 May 2010 18:32:15 +0000 http://www.mytwodollars.com/?p=1541#comment-36460 IT"S ALL PART OF OUR SOCIETY THOUGH...DON"T YOU LIKE TO WATCH AMERICAN IDOL AND DANCING W STARS? IT”S ALL PART OF OUR SOCIETY THOUGH…DON”T YOU LIKE TO WATCH AMERICAN IDOL AND DANCING W STARS?

]]> By: John Enrighthttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-36459 John Enright Tue, 25 May 2010 18:25:23 +0000 http://www.mytwodollars.com/?p=1541#comment-36459 Actually there is NO LAW THAT EXISTS THAT CAN MAKE YOU PAY FED INCOME TAX... Plus inflation is a hidden tax on us all... Your birth certificate has a security number on it that coinsides with a stock securities number...You are owned by a bank and publicly traded on the stock market...YOU ARE A SLAVE...YOU JUST DON"T KNOW IT Actually there is NO LAW THAT EXISTS THAT CAN MAKE YOU PAY FED INCOME TAX…

Plus inflation is a hidden tax on us all…

Your birth certificate has a security number on it that coinsides with a stock securities number…You are owned by a bank and publicly traded on the stock market…YOU ARE A SLAVE…YOU JUST DON”T KNOW IT

]]> By: Steve Dhttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-29655 Steve D Tue, 21 Oct 2008 17:35:57 +0000 http://www.mytwodollars.com/?p=1541#comment-29655 So, rather then rant and complain I looked at the tax code. How could they do that? There are only a few basic ways that you can have an AGI of over $200k and pay no taxes. The main place is in schedule A. For example if you earn $220k but have to pay $300k in out of pocket medical you would have no tax liability. If someone stole $230k from you then again you'd have no tax liability. In other cases the home mortgage interest, property tax, state income tax can help reduce the liability to zero. Gifts to charity also apply - I would think this would be somewhat common in the case of some 70year old with 5mil giving away a $300k per year. Outside of schedule A there is a little list on the 1040. Other items that would contribute: District of Columbia. first-time homebuyer credit Qualified Adoption Expenses AMT credit Child tax credit residential energy credits education credits credit for elderly and disabled credit for child care retirement savings credit foreign tax credit (for taxes earned and paid in a foreign country that are also taxed in the us.) Then there is a whole pile in the business side - form 3800: welfare to work for hiring certain folks, disabled access credit renewable electricity credit bio-diesel credit distilled spirits credit. Messy - yes. Some specific stupid programs yep. Big easy loopholes for the evil rich to get out of paying taxes - not so much. A good argument for massive tax simplification - Yes. It's not easy to trust that its even close to fair that way it is now. Plus the little stupid things encourage lobbying and corrupting the system. So, bad - but not quite the evil it's portrayed to be. So, rather then rant and complain I looked at the tax code. How could they do that?

There are only a few basic ways that you can have an AGI of over $200k and pay no taxes. The main place is in schedule A. For example if you earn $220k but have to pay $300k in out of pocket medical you would have no tax liability. If someone stole $230k from you then again you’d have no tax liability. In other cases the home mortgage interest, property tax, state income tax can help reduce the liability to zero. Gifts to charity also apply – I would think this would be somewhat common in the case of some 70year old with 5mil giving away a $300k per year.

Outside of schedule A there is a little list on the 1040.
Other items that would contribute:
District of Columbia. first-time homebuyer credit
Qualified Adoption Expenses
AMT credit
Child tax credit
residential energy credits
education credits
credit for elderly and disabled
credit for child care
retirement savings credit
foreign tax credit (for taxes earned and paid in a foreign country that are also taxed in the us.)
Then there is a whole pile in the business side – form 3800:
welfare to work for hiring certain folks,
disabled access credit
renewable electricity credit
bio-diesel credit
distilled spirits credit.

Messy – yes. Some specific stupid programs yep. Big easy loopholes for the evil rich to get out of paying taxes – not so much. A good argument for massive tax simplification – Yes. It’s not easy to trust that its even close to fair that way it is now. Plus the little stupid things encourage lobbying and corrupting the system. So, bad – but not quite the evil it’s portrayed to be.

]]> By: Whiners unite!http://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27143 Whiners unite! Thu, 19 Jun 2008 21:25:16 +0000 http://www.mytwodollars.com/?p=1541#comment-27143 Okay, I don't condone tax evasion and loopholes, but stop to consider this: You're on a modest to low income, you scrimp and save in every way possible. Even your kids start work at a very early age (say 10, then at 14, a legal, taxable job). You encourage your kids to go to college so they can have better opportunities than you. They do (via financial aid, working, loans, etc). They come out of college with a degree that literally opens doors. Fifteen years later, your kids have a family and their household income tops $200k. Are you going to begrudge them their hard-earned financial situation? Guess what? I'm one of those kids. So for those of you who want to "stick it to the rich", consider that their earnings didn't come from the money tree, but hard work. I happily pay my taxes because I'm thankful for what I have and I DON'T MIND, but I do get mighty tired of everyone and their mother putting their sticky fingers into my wallet and taking more and more and more, simply because I can afford it. The people you should begrudge are the big businesses that have oodles of tax shelters and benefits. Oh, and my mom's modest income? No more than $6,000 in a year. Okay, I don’t condone tax evasion and loopholes, but stop to consider this: You’re on a modest to low income, you scrimp and save in every way possible. Even your kids start work at a very early age (say 10, then at 14, a legal, taxable job). You encourage your kids to go to college so they can have better opportunities than you. They do (via financial aid, working, loans, etc). They come out of college with a degree that literally opens doors. Fifteen years later, your kids have a family and their household income tops $200k. Are you going to begrudge them their hard-earned financial situation? Guess what? I’m one of those kids. So for those of you who want to “stick it to the rich”, consider that their earnings didn’t come from the money tree, but hard work. I happily pay my taxes because I’m thankful for what I have and I DON’T MIND, but I do get mighty tired of everyone and their mother putting their sticky fingers into my wallet and taking more and more and more, simply because I can afford it. The people you should begrudge are the big businesses that have oodles of tax shelters and benefits. Oh, and my mom’s modest income? No more than $6,000 in a year.

]]> By: Dividend Growth Investorhttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27076 Dividend Growth Investor Mon, 16 Jun 2008 19:22:09 +0000 http://www.mytwodollars.com/?p=1541#comment-27076 Or people who are 100% invested in Muni Bonds. Lol :-) Or people who are 100% invested in Muni Bonds. Lol :-)

]]> By: PF Links Sunday While Other Blog is Doing Great | Personal Finance Blog by Money Ninghttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27055 PF Links Sunday While Other Blog is Doing Great | Personal Finance Blog by Money Ning Sun, 15 Jun 2008 15:31:04 +0000 http://www.mytwodollars.com/?p=1541#comment-27055 [...] Two Dollars finds out that many people earning over $200,000 pay no income tax! [...] [...] Two Dollars finds out that many people earning over $200,000 pay no income tax! [...]

]]> By: dogatemyfinanceshttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27048 dogatemyfinances Sun, 15 Jun 2008 02:37:39 +0000 http://www.mytwodollars.com/?p=1541#comment-27048 I'm guessing this "loophole" is charity. People who already made their money and donate what comes in. I’m guessing this “loophole” is charity. People who already made their money and donate what comes in.

]]> By: Crybabyhttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27043 Crybaby Fri, 13 Jun 2008 22:30:36 +0000 http://www.mytwodollars.com/?p=1541#comment-27043 *waaahhhh* People have money and stuff I don't have. *waaahhhh* I want tax loopholes too but I don't bother to give to charities because I need to fuel my giant SUV and pay for my premium satellite package. It just isn't fair! I'm going to vote for whomever promises to stick it to the rich!!! Those jerks!!! (Even if it means MY tax breaks will go away too.) Eep! *sniff* *waaahhhh* People have money and stuff I don’t have. *waaahhhh*

I want tax loopholes too but I don’t bother to give to charities because I need to fuel my giant SUV and pay for my premium satellite package.

It just isn’t fair!

I’m going to vote for whomever promises to stick it to the rich!!! Those jerks!!! (Even if it means MY tax breaks will go away too.) Eep!

*sniff*

]]> By: Mrs. Micahhttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27024 Mrs. Micah Thu, 12 Jun 2008 19:40:26 +0000 http://www.mytwodollars.com/?p=1541#comment-27024 If I had $200,000 a year right now, I'd be happy to pay the taxes. But that's mostly because it's maybe 9x what we made last year. ;) If I had $200,000 a year right now, I’d be happy to pay the taxes. But that’s mostly because it’s maybe 9x what we made last year. ;)

]]> By: Davidhttp://www.mytwodollars.com/2008/06/12/make-over-200000-and-pay-no-income-tax/#comment-27023 David Thu, 12 Jun 2008 19:11:11 +0000 http://www.mytwodollars.com/?p=1541#comment-27023 Unfortunately, avoiding taxes results in no schools, bad roads, no airlines, no oil, no police, no fire, no.... ;-) I agree Jeremy - the entire thing needs to be ditched - but it never will be, as too many people depend on it staying as-is. A friend of mine works for the state of CA and says that you get in trouble if you actually do your job or try to improve things - the goal there is to do as little as possible, keep your job forever, never raise an eyebrow, and retire on our tax dollars. That's it - there will never be real reform, I am afraid. Unfortunately, avoiding taxes results in no schools, bad roads, no airlines, no oil, no police, no fire, no…. ;-)

I agree Jeremy – the entire thing needs to be ditched – but it never will be, as too many people depend on it staying as-is. A friend of mine works for the state of CA and says that you get in trouble if you actually do your job or try to improve things – the goal there is to do as little as possible, keep your job forever, never raise an eyebrow, and retire on our tax dollars. That’s it – there will never be real reform, I am afraid.

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