Is it my imagination or do single individuals, indeed, get soaked in taxes, while the other filing brackets make out much better financially? Also, what will Bush's economic stimulus package do for singles?
mahal:The answer is to do something legally which warrants filing a Schedule C. Who said that?
Do you have statistics on what percentage of American citizens are single now as opposed to in recent decades? I think that the singles group percentage has been increasing; yet, it does not have the "gray power" of senior citizens who are represented by such organizations as AARP.
Do you mean like buying a house (that would be schedual A) or starting a business (schedual C)?
No, I don't have any statistics, but I always advise people that they should never allow their choices to be entirely guided by tax benefits. Here are some examples:
If you give money to charity for the sake of the deduction, for every $100 you give, you deduct $10-15 in taxes, and you lose the rest.
If you start a business so that you can record a loss in your tax form, you'll find that some of your expenses aren't allowed, some are depreciated and spread over several years, and ultimately, you get the same 10-15% return as in a contribution (depending on your tax bracket). You lose the rest and waste a whole lot of time.
It's better to focus on revenues than the deductions. Get a job, expand your business, improve your career. That's good advice to anyone. Pinching pennies saves much less, and sometimes costs you.
Posts: 3632 | Location: Washington, US | Registered: 06-03-02
Not sure how they justify 'penalising' singles in the US, but here it's a question of 'future' economics.
You see, the current generation of people are paying taxes to support the people who are retired now. In the same way, today's children will pay for your elderly care (probably) in the future. Older people need (generally) much more health care, provided with pension, etc., etc. though they are not contributing and, historically, have not contributed enough money into the 'system' during their working lives to cover their future needs. This current financial need comes from todays taxpayers.
As a parent, I'm spending my time, effort and money to look after 'you' in your old age because I'm creating future taxpayers, but as a single with no kids you are not and (in most cases) are not making enough 'provision' for yourself in your old age. Of course, there are exceptions, where some people do save and take out retirements plans, etc., but in most cases this is not true. This is why marrieds with kids get tax breaks....because 'we' are the ones building/maintaining the future, while 'you' aren't.
But, yes, you're right, as the age profile is changing, with people living longer and requiring care or pension for longer, financial life is much tougher for younger/singles today than it has been.
Thus, the answer is to encourage you (via the tax system) to get married and have kids (creating more taxpayers for the future) so that this demographic/economic problem is minimised or avoided.
Married people with kids aren't getting such a great deal either. The tax breaks you get are so minimal that you don't even really notice. If you want to get a good deal on taxes, be head of household with dependents. You have to keep your income down to play the game. You don't pay any taxes and get back EIC that was even more than what you put in the first place. It's a great deal. Just get a divorce.
This is probably a matter of preference when you consider the costs involved, but I see married-joint getting the better deal. Here are some differences:
2 married people deduct $13850 (standard + exemptions), 2 people filing H/H deduct $12900.
Head of household requires a dependant, married-joint doesn't. The "other person" in a married-joint family is an adult and can bring in gangloads of income without any penalty, head of household assumes that the dependant has little or no income and is actually a burden to the taxpayer. As soon as the dependant earns more than $3000 they can no longer be a dependant, and the head of the household must file as single.
The 2 best tax credits on the books, "child tax credit" and "additional child tax credit" are not available to all H/H filers. The limitations disqualify many dependants.
Married couples have higher ceilings across the board on benefits (like IRA's and capital gain allowances) and receive better benefits from tax credits. Compare the EIC tax table in any income category, and you'll see the benefit for "married-joint" is a couple hundred $$ higher than H/H.
[This message was edited by mahal on 01-15-03 at 06:37 PM.]
Posts: 3632 | Location: Washington, US | Registered: 06-03-02
CatWoman: Make that "a lot more efficiently"! It is also about time that whistleblowers stopped being regarded as snitches instead of honest and courageous malcontents.
