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I started working at 15, I paid whatever the EZ-form said to pay. Which I think was around 15%. I did that until I was 25, when I began to learn to itemize my taxes and I studied tax-planning.
I have not paid into Income Taxation since 1983.
I don't beleive you've paid zero income tax for nearly 35 years and if you were paying 15% when you first started working you probably don't understand how the progressive system works
I don't beleive you've paid zero income tax for nearly 35 years
There were a few years where my employer [US Navy] would start the year withholding Income Taxes 'for me' and I would have to fight with the dispersing office to get them to reset my withholding status back to 'Exempt'. So they would withhold some, and I had to file to get it back the following year.
Eventually I learned that I needed to file a new W-4 form with dispersing on the first week of January and again on the second week of January. Otherwise their computer would reset my withholding status from 'Exempt' to some other status. A few years I was deployed during the month of January, so that messed me up for the entire year.
You can see that on line 7, you can enter 'Exempt' as your income tax filing status.
I have had no Income Tax liability since 1983. I have tried to maintain my tax withholding status as 'Exempt' since then.
I have not willfully paid into Income Taxation since 1983. I have not owed any Income Taxes. Any time that Income Taxes have been withheld due to the incompetence of my employer, those funds have been refunded to me the following year.
Also as a side note, a few years my salary was 'tax exempt' due to the nature of my career. But 'tax-exempt' income is a separate matter from having a tax withholding status of 'Exempt'.
There were years where I have had both 'tax-exempt' salary and where my tax withholding status was 'Exempt'.
Does that clarify it for you? Sometimes these terms get tossed around and it can be confusing.
I have never paid an income tax 'rate' that high but numerous years where effective tax was well over 50%. Between income tax, SS tax, property taxes, sales taxes, fuel taxes, excise taxes, and some taxes hidden in salaries, retail prices, and services, my total taxation was clearly the largest expense in my household.
There were a few years where my employer [US Navy] would start the year withholding Income Taxes 'for me' and I would have to fight with the dispersing office to get them to reset my withholding status back to 'Exempt'. So they would withhold some, and I had to file to get it back the following year.
Eventually I learned that I needed to file a new W-4 form with dispersing on the first week of January and again on the second week of January. Otherwise their computer would reset my withholding status from 'Exempt' to some other status. A few years I was deployed during the month of January, so that messed me up for the entire year.
You can see that on line 7, you can enter 'Exempt' as your income tax filing status.
I have had no Income Tax liability since 1983. I have tried to maintain my tax withholding status as 'Exempt' since then.
I have not willfully paid into Income Taxation since 1983. I have not owed any Income Taxes. Any time that Income Taxes have been withheld due to the incompetence of my employer, those funds have been refunded to me the following year.
Also as a side note, a few years my salary was 'tax exempt' due to the nature of my career. But 'tax-exempt' income is a separate matter from having a tax withholding status of 'Exempt'.
There were years where I have had both 'tax-exempt' salary and where my tax withholding status was 'Exempt'.
Does that clarify it for you? Sometimes these terms get tossed around and it can be confusing.
Where does your income come from for more than 3 decades that enables you to be exempt from paying any federal income tax?
Where does your income come from for more than 3 decades that enables you to be exempt from paying any federal income tax?
I am a career sailor in the US Navy, I served primarily on submarines. I retired in 2001. My Dw and I both took IRS courses called VITA every year for 10 years, we were both certified tax preparers. Along with being budget counselors.
During my Naval career every home that we bought was a Multi-Family-Residence [MFR] [Tri-plex, Four-plex, Five-plex].
Every MFR:
provided us rental income that covered costs [mortgage, insurance, property taxes, maintenance],
provided my family a home to live in without requiring any of my salary,
provided us tax-sheltering in the form of depreciation,
and each MFR built equity for us.
Obviously most of my career was spent on deployment, while my Dw was kept busy managing the MFRs. As I have already explained to you, some years my salary was 'tax-exempt' even without the tax-sheltering from our portfolio. My profession is one that carries a relatively high amount of 'deductible profesional expenses'. [I had a lot of professional write-offs].
By the time that I was forced onto pension, we had amassed four MFR properties, in different states and overseas. We consolidated these holdings to one MFR. We refinanced the remaining MFR and used the cash to buy our farm homestead where we live today.
Today we live on a farm. We settled in an area known for it's extremely low Cost-Of-Living. We have no mortgage, no debt. We produce most of our own food. We are on solar power. Our primary income is my pension. My military pension is low enough that on it's own I do not earn enough to be eligible to pay income taxes. Because that is how much we pay our military retirees.
I do have farm income, but let us be real it is a farm. We have more tax write-offs than we can honestly use. On a farm you can not swing a dead cat without striking yet another tax write-off.
There were a few years where my employer [US Navy] would start the year withholding Income Taxes 'for me' and I would have to fight with the dispersing office to get them to reset my withholding status back to 'Exempt'. So they would withhold some, and I had to file to get it back the following year.
Eventually I learned that I needed to file a new W-4 form with dispersing on the first week of January and again on the second week of January. Otherwise their computer would reset my withholding status from 'Exempt' to some other status. A few years I was deployed during the month of January, so that messed me up for the entire year.
You can see that on line 7, you can enter 'Exempt' as your income tax filing status.
I have had no Income Tax liability since 1983. I have tried to maintain my tax withholding status as 'Exempt' since then.
I have not willfully paid into Income Taxation since 1983. I have not owed any Income Taxes. Any time that Income Taxes have been withheld due to the incompetence of my employer, those funds have been refunded to me the following year.
Also as a side note, a few years my salary was 'tax exempt' due to the nature of my career. But 'tax-exempt' income is a separate matter from having a tax withholding status of 'Exempt'.
There were years where I have had both 'tax-exempt' salary and where my tax withholding status was 'Exempt'.
Does that clarify it for you? Sometimes these terms get tossed around and it can be confusing.
Are you a spy? Do you work for the World Bank in an international posting? Are you the President of the United States? We would all like to be exempt from taxation (not just withholding) but it is not to be... :-)
Are you a spy? Do you work for the World Bank in an international posting? Are you the President of the United States? We would all like to be exempt from taxation (not just withholding) but it is not to be... :-)
I think submariners' military pay is mostly exempt. Perhaps service on a submarine qualifies as service in a combat zone?
When I entered the workforce in 1981, the top 70% bracket started at $108,300 which was about 5x what I was making. My effective tax rate as a new grad out of college was higher than it is now. I was in the 30% bracket at what today would be about $80K. The big difference then was that itemized deductions didn't phase out for high income people and you could write a lot more off including things like interest on car loans and revolving credit. The rules were also very lax about home offices.
And everybody wonders why we have this gigantic national debt. The middle class largely no longer pays Federal income tax. Only affluent people pay much of anything. And then we hear the political rhetoric about the evil rich people when it's the middle class escaping paying taxes that is largely causing the problem.
With Federal + State + FICA + Local taxes today we can be up to 60%
Especially more so when one considers the portion of Social Security and Medicare that the employers have to pay. These are "hidden" and no one ever sees them, however it is part of the total compensation package that an employer has to fork over to the gument.
For example, the Clinton's deducted $41,040 in mortgage interest, and also $1.0 Million "donation" to their own family foundation. I would like to see limits on deductions, and tighter definitions of Charitable Contributions. Eliminate the vast majority of Charitable organizations tax status. Food kitchens, etc should still be tax deductible, for example.
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