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Old 02-01-2016, 04:55 PM
 
Location: Eastern UP of Michigan
1,204 posts, read 867,155 times
Reputation: 1292

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Well------ crown and possible a root canel.
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Old 02-01-2016, 05:35 PM
 
26,146 posts, read 21,364,265 times
Reputation: 22721
Quote:
Originally Posted by ohhwanderlust View Post
Yep, I'm counting everything that's taken out.

We're in the 28% bracket for federal.

But what is your effective federal rate?
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Old 02-01-2016, 06:05 PM
 
123 posts, read 83,769 times
Reputation: 297
Quote:
Originally Posted by Lowexpectations View Post
I'm well aware of the difference between withholding and tax liability. Fwiw 250k mfj taking the standard deduction is roughly 20.5% effective not taking into account 401k contributions, state income tax as a deduction etc maxing 2 401ks drops the effective rate under 17%
Yes, you may well be but many others are not. I did not intend to say that you yourself were unaware of this. My effective tax rate at $250k was about 22%, as a single. A surprising number of people confuse marginal and effective rates, as you are, no doubt, also aware. I deleted my post because I probably should have addressed another poster.

Last edited by Achelois; 02-01-2016 at 06:07 PM.. Reason: Typos will be my undoing.
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Old 02-01-2016, 06:10 PM
 
Location: Wartrace,TN
7,890 posts, read 12,593,914 times
Reputation: 16086
Quote:
Originally Posted by LowonLuck View Post
How will you use your tax refund if you get one? I am boring. Mine is going to savings.
Same here. It isn't much of a refund and I have no immediate need.
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Old 02-01-2016, 06:13 PM
 
Location: Cheektowaga, NY
2,008 posts, read 1,237,188 times
Reputation: 1794
All going into my wife and I's joint savings account. Saving up for a 25-30% down payment on a house in about a year or so.
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Old 02-01-2016, 07:53 PM
 
20 posts, read 18,301 times
Reputation: 25
I plan on spending my $1 fed refund check on a vanilla cone in McD.
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Old 02-01-2016, 08:35 PM
 
1,517 posts, read 1,653,034 times
Reputation: 2526
Mines will be used to pay off my car.
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Old 02-01-2016, 11:26 PM
 
2,813 posts, read 2,098,183 times
Reputation: 6129
Quote:
Originally Posted by LBTRS View Post
I'm sure you do think I am better off having a higher income and paying taxes on it so you can get a refund when you paid absolutely NO federal tax into the system.
Are you kidding?

You ARE better off having a higher income and paying taxes on it. Of course you are.

If you would be better off with such a low income that you didn't have to pay federal income tax, why don't you? I'm mean that seriously. The answer, of course, is that you're better off making more money.

This is not a difficult concept, people.

A few years ago, thanks to an unexpectedly large bonus and some raises/promotions that came mid-year, we owed--OWED--$100K at tax time. It was shocking to pay such a large amount, but you know what? HAVING THE MEANS TO PAY IT was MUCH better than not making that money all. Without question.
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Old 02-02-2016, 07:13 AM
 
Location: Arizona
296 posts, read 315,794 times
Reputation: 606
Going to open a Roth IRA. Need to start while I'm still in my early 20s
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Old 02-02-2016, 09:32 AM
 
Location: Boise, ID
8,046 posts, read 28,356,590 times
Reputation: 9469
Quote:
Originally Posted by ohhwanderlust View Post

My husband thought for sure we'd be getting a fat refund like the $13,000 we got last year. But then I got promoted, and apparently being bumped into the next bracket (both me and us jointly) somehow changed everything.

I seriously feel like I actually took home more when I earned less money. Lol. So much for working hard to get that promotion and working 50+ hours a week ever since.
I hear this all the time. You do understand that moving to the next tax bracket doesn't tax ALL your money at the higher rate, just any money over that breakpoint, right? So if your AGI was $1000 into the next tax bracket, you would only pay the higher rate on that $1000. So many people don't understand this concept.


So if you're in the 15% bracket (using me for an example) and your effective federal tax rate was 8% (like mine was last year with no deductions other than the standard), and you moved barely into the next bracket, your effective rate might be 8.1% or 8.2%, but it isn't going to suddenly jump to 14%, where you net less than if you hadn't moved up a bracket.


Mathematically, there is no point at which moving into a higher bracket nets you less money. More money gross always = more money net, at least from a federal tax rate viewpoint.
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