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Driller1, if you claim self-employment and your enterprise’s declared or undeclared gross revenues were of some substantial amount, I would suppose the IRS has or very soon will be continuing to examine and or audit your finances.
Respectfully, Supposn
I file income taxes every year. I do not pay income taxes. I have not pay any money into income taxation for many years. No money is 'withheld' from my paychecks, for the purpose of income taxation. No money is owed when I file my income taxes.
I have not paid income taxes since 1983.
We have been audited three times by the IRS. Each time we have been audited, we requested the audit, as we wanted to compare our records with the IRS' records.
Always be open and honest with the IRS. Never hide what you are doing from any IRS auditor. Never try to cheat the IRS in any manner. Do not violate any laws. However, not 'everyone' pays income taxes.
I am merely a US Service member [currently retired] who also operates a few small businesses.
As for SS, as I have stated I have worked with many US servicemembers who did not pay FICA.
I file income taxes every year. I do not pay income taxes. I have not pay any money into income taxation for many years. No money is 'withheld' from my paychecks, for the purpose of income taxation. No money is owed when I file my income taxes.
I have not paid income taxes since 1983.
We have been audited three times by the IRS. Each time we have been audited, we requested the audit, as we wanted to compare our records with the IRS' records.
Always be open and honest with the IRS. Never hide what you are doing from any IRS auditor. Never try to cheat the IRS in any manner. Do not violate any laws. However, not 'everyone' pays income taxes.
I am merely a US Service member [currently retired] who also operates a few small businesses.
As for SS, as I have stated I have worked with many US servicemembers who did not pay FICA.
You do realize that for every year of one's active career counted for SS where no income is reported counts as "zero" in the average. This in turn will lower the amount of benefits when such persons file.
The "zero" effect is one reason why females tend to have lower SS benefits than men on average. Women simply move in and out of the workforce more often usually because of marriage and to have/raise babies. However all those years of no income reported weighs down their average.
Persons working "off the books" as it were for long periods say after being laid off are often shocked when they file for SS and their benefit amounts are much lower than expected.
Bob TN, aside from early withdrawals of 401K funds, the named exemptions from FICA taxation you listed do not seem unreasonable or proportionally significant.
Deducted funds diverted to FlexMed are the similar to health insurance expenses; if the employees and their families don’t use the available services, their cost to the employee is no less income they have not received and could not spend.
Respectfully, Supposn
I would maintain the employee exemption portion of them, not the employer.
Sporty and Misty, as you wrote, originally Social Security retirement was conceived as primarily an insurance plan but due to medical advances and to an additional extent to Medicare, our population’s life expectancy is greater than it was in 1935 when the first Social Security act was passed. The enactment of the affordable care Act is expected to increase the extent of this trend.
Thus SS retirement benefits are of greater economic significance today than they were in 1935.
Social Security is now our most regressive tax that’s of particular hardship to our working poor and their families. It’s politically, economically unfeasible to increase their direct and indirect FICA taxes.
Employees now directly pay 7.65% and indirectly (due to through employers’ FICA imbedded within all prices), along with everyone else they pay the equivalent of somewhere between a 2% - 3% equivalent of a federal sales tax. Thus all employees, (including the working poor) pay approximately 10% - 11.6% for FICA.
[Refer to the first post of this thread for further explanation].
For 40% of retirees, their SS benefits are what enables them to stay above the poverty income levels. This is of significant financial benefit to retirees and their families. Additionally this is of net significant economic benefit to our nation.
Eliminating the Social Security retirement program or reducing its benefits without replacing it with something better would of course be financially detrimental to the elderly and their families; additionally it would be of net economic detriment to our nation.
Due to the retirement program’s economic benefit to our entire nation, it is not unreasonable that everyone (regardless of their income source) should contribute more to sustaining that benefit to our entire nation. The alternative is a greatly increased incidence of poverty in the USA.
[We should consider that deep wide spread poverty was the existing economic climate of every advanced nation (including the USA0 when FDR signed the first Social Security act. It’s ironic that conservatives hated FDR because he was “a traitor to his (financial) class and socialists hated him because the policies enacted by his “New Deal” denied them of the best opportunity they ever had to transform the USA to be a socialist nation. It seems characteristic of conservatives that they cannot take “yes” for an answer. They’re always striving to achieve what is to their own worst interest. If they could repeal Social Security retirement laws or undermine the program by “privatization or other means, the political consequences would be very much contrary to their vision of what our nation should be.
Beware of what you wish for, you may get it].
What you say may be true but leaves out consideration of the Earned Income Tax Credit which negates some of the effects of the tax and FICA deductions on the "working poor".
Benefits of FICA are also not at all regressive. Someone making $30k per year gets a much higher percentage of their income in the form of social security than $90k. So while they're both taxed at the same rate, which isn't regressive, the wealth transfer mechanism kicks in on the other end so that the person making $30k per year gets something like 3x as much out for every dollar put in as the guy making $90k. So in effect, it's extremely progressive.
FICA is basically just the only federal "tax" that over 40% of the country pays since they no or less than no income taxes. Nobody likes paying taxes.
The most regressive taxes are the ones in which everyone pays exactly the same, regardless of their ability to pay. Automobile license plates, for example.
The most regressive taxes are the ones in which everyone pays exactly the same, regardless of their ability to pay. Automobile license plates, for example.
That's a fee. It's equivalent to saying that transportation is a regressive tax because everyone (who uses it) pays exactly the same fare (unless a student, elderly, disabled, or some other special class) regardless of their ability to pay.
A license plate fee is no more a regressive tax than a bus fare is a regressive tax. Sales taxes are, by some, considered regressive since elasticity of people with less money spend more of their income on things subject to sales tax than people with higher income do.
That's a fee. It's equivalent to saying that transportation is a regressive tax because everyone (who uses it) pays exactly the same fare (unless a student, elderly, disabled, or some other special class) regardless of their ability to pay.
A license plate fee is no more a regressive tax than a bus fare is a regressive tax. Sales taxes are, by some, considered regressive since elasticity of people with less money spend more of their income on things subject to sales tax than people with higher income do.
In some states the registration fee is based on the car's value, I believe that is what he means. I forget what kind of tax the IRS considers it to be, but you can write it off as a tax paid to the state if you itemize.
It's been years since I had a car new enough to do that with
Come to think of it, my NM registration is based on the GVW of the vehicle - my little car costs maybe $50 for 2 years and my 15,000# GVW truck is $120 for one year. I believe the IRS would consider these to be taxes too, but I don't itemize any more.
I file income taxes every year. I do not pay income taxes. I have not pay any money into income taxation for many years. No money is 'withheld' from my paychecks, for the purpose of income taxation. No money is owed when I file my income taxes.
I have not paid income taxes since 1983.
We have been audited three times by the IRS. Each time we have been audited, we requested the audit, as we wanted to compare our records with the IRS' records.
Always be open and honest with the IRS. Never hide what you are doing from any IRS auditor. Never try to cheat the IRS in any manner. Do not violate any laws. However, not 'everyone' pays income taxes.
I am merely a US Service member [currently retired] who also operates a few small businesses.
As for SS, as I have stated I have worked with many US servicemembers who did not pay FICA.
Submariner, you're contending that you’re contending no net incomes from all employment and enterprises over a number of years while operating “a few small businesses”?
Your losses and other reductions from taxable incomes exceed your declared earnings?
That’s a conceivable but very unusual scenario.
You do realize that for every year of one's active career counted for SS where no income is reported counts as "zero" in the average. This in turn will lower the amount of benefits when such persons file.
If you have chosen to have a SS policy, then it is likely a good idea to 'report' an income every year and to pay into your personal SS policy.
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