AMT vs HMID

NEW -> Contingent Buyer Assistance Program
<p>Awgee - thanks for clarifying.</p>

<p>Janet - as Awgee mentioned, no one can remember it all. Thanks for bringing it up though, otherwise it wouldn't have been clarified! </p>
 
<p>Ah yes, the tax code.</p>

<p>How much does it weigh these days?</p>
 
I guess. Personally, I like parks, roads, police and fire protection, and public libraries, among other things. I like that public health programs reduce widespread disease.





I don't mind paying taxes and my career choices are no different for them. I do mind the way they are allocated and I do mind that the tax code is so full of loopholes that most of the tax burden (as a percentage of income) falls on the middle class.
 
<p>Janet - 18,000 pages and growing every time Congress meets.</p>

<p>Laing_Lies - Over $137,500 you will not receive the full mortgage interest deduction due either to high income threshholds or AMT.</p>
 
<p><em>"the tax code is so full of loopholes that most of the tax burden (as a percentage of income) falls on the middle class. "</em></p>

<p>My experience and statistics show that high income earners pay the vast majority of income taxes, both as a total amount and as a percentage of income. I am not taking a moral stance, or saying what it should be. I am just stating the facts.</p>
 
<p>What's considered Middle Class these days? I mean $137,000 a year used to sound like a lot to me, but it seems like these days that's not very hard to reach for a dual-income family.</p>

<p> </p>
 
<p>Laing_Lies - You take all the deductions to which you are entitled, and yes, you are screwed. If it makes anyone feel any better, Angelo Mozillo will be paying at a the maxiamum marginal tax rate on the stock he sold this year. And there are no loopholes. I know. Everybody thinks the rich have a bunch of loopholes that preclude them from paying income tax, but it is a myth. Mozillo and the other corporate officers who exercise their non-qualifying stock options, will be paying big time taxes.</p>

<p>Actually, the most advantageous and profitable loopholes as a percentage of income are designed for and taken by low income earners. There are folks who pay nothing in income tax, and get money refunded that they never paid. Again, I am not taking a moral stance. I am just stating fact.</p>
 
<p>Awgee -</p>

<p>I do agree with you. Even if there were loopholes for the rich, I don't know why that would be so bad. I mean why did I spend 12 years in training/residency to pay more taxes? I'm being punished by paying a percentage of my income because I worked hard to be able to make more money? So, with the risk of being slammed on this blog, I do not feel pain for the low-income people and middle-class workers because every year I pay in taxes more than their entire income! (I'm not bragging - I'm complaining)</p>
 
<p>Laing_Lies - <em>"I'm not sure if this is a reputable site or not"</em></p>

<p>Reputable? I dunno. I do know that tax code is so complicated that we only use three sources of third party info, and then only for quick down and dirty checking. For any research of substance, we always go to tax code. The IRS will not forgo charging my clients penalties and interest if I say, "But this website said ...., and it's reputable". </p>
 
Awgee - I thought to qualify for the EITC one had to have paid income taxes?





Also, are the high income earners W-2'ers or is a significant portion of that investment income?





TIA.
 
<p>LL,</p>

<p>Many of us are in your situation. And there are legal ways to reduce your tax liability. Talk to your CPA about tax liability reduction by restructure your income. It works wonder. It's not how much you make, but it's how much you get to keep.</p>
 
Eva - There are many qualifications for EIC, but paying income taxes is not one of them. One must earn income to qualify, but one does not need to pay taxes. Oddly enough, EIC and a few other credits which do not require payment of taxes to receive are called "refundable credits". Don't you just love the IRS and the names they have for code? Refundable credits? Alternative Minimum Tax?
 
<p><em>"Also, are the high income earners W-2'ers or is a significant portion of that investment income?"</em></p>

<p>Eva - Sorry I forgot to answer this question in my last post. But, high income earners are usually W-2'ers. It is my experience that most folks who invest in equities do not do well. And I can count the number of day traders on one finger who are profitable. Most huge income earners make large W-2 salaries and exercise stock options and sell the resultant stock. The taxes paid on exercised stock options and the resultant stock sale are phenomenally large in the last couple of years. And it isn't just my clients. I speak with other tax professionals and they are experiencing the same.</p>
 
Awgee- With respect to "investment income" I was really referring to the Paris Hilton's of our country - the trust fund babies. I can see that W-2'ers would pay more. Self employeds get some great perks, like writing off car leases. In any event, it's been awhile since I've reviewed the underlying stats. I'll have to find some time this weekend to do that. I'm good at talking out of my behind, but it really doesn't add to the common wisdom.
 
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