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Of course I know; I can look at my pay stub and see it.
The expenditures after that, well, we don't keep careful records, but we know to keep them down, and the prime mantra is AVOID FIXED COSTS. That means no subscriptions to streaming services, etc.; avoiding products whose function depends on a subscription (Peloton, anyone?) and so on.
A few times a year I run the w4 withholding calculator from the IRS so I have a pretty good grasp of where the money goes. I've done a pretty good job and have received <$100 federal returns the last few years. This year I'll be paying a few thousand as I sold a house I co-owned with my brother. It wasn't my primary residence so proceeds will be taxable.
What you get back is the refund. The return is all the forms filed (1040, etc.).
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by TaxPhd
What you get back is the refund. The return is all the forms filed (1040, etc.).
I prefer no to lend the government my money interest free, so I always owe several hundred or a thousand in April. A tax refund is a savings account with no interest. At least in the credit union I get .5% interest.
Quote:
Originally Posted by TaxPhd
What is it about being a business owner that would result in 35% take-home (or less)?
When I bought my business in 1993 the seller was getting 35% take-home profit. At the peak I managed to get it up to 40%. That's the way it is with a small business in a competitive environment, when you have to pay commercial rent, employees, insurance, utilities B & O tax, and the rest, but have to keep prices reasonable.
A potential benefit down the road doesn’t change what taxes are
No, it doesn't, but viewing some of those payroll "taxes" as something you pour down a hole and never see again isn't really accurate. Viewing them less as a tax and more like a savings account or investment is.
"May" would be the word not "will." Not everyone will live long enough to collect either or long enough where they come out ahead of the game.
Agree. That would have been a better word. Call me an optimist!
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Define "taxes". Some of those deductions will benefit YOU eventually! Ever heard of SS and Medicare OP?
