2012 tax return question
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registered pw
Joined: Aug 2003
Posts: 38,859
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From: south central pa
2012 tax return question
In 2012 in PA we will be above the $70,701 mark for the 25% federal tax bracket b/c of a settlement awarded to us that is taxable married filing jointly. Up until the 2011 tax year year we were in the 15% after all deductions.
We would have to put over $1000 more a month into a 401k which is impossible to reduce it all back into the 15% range.
My question is, When we end up with 2012 taxable income above 70,701, do we pay the 25% on the entire amount or do we pay 10% on 0-$17,400; 15% on $17401-70,700 and 25% on everything else beyond 70,701?
We're seeing what we need to do to reduce our tax so we don't pay out the nose next february.
I've asked our current tax professional(who we're replacing next year b/c of a few errors in the past few years but they don't know it) to do a projected tax return for 2012.
We would have to put over $1000 more a month into a 401k which is impossible to reduce it all back into the 15% range.
My question is, When we end up with 2012 taxable income above 70,701, do we pay the 25% on the entire amount or do we pay 10% on 0-$17,400; 15% on $17401-70,700 and 25% on everything else beyond 70,701?
We're seeing what we need to do to reduce our tax so we don't pay out the nose next february.
I've asked our current tax professional(who we're replacing next year b/c of a few errors in the past few years but they don't know it) to do a projected tax return for 2012.
Карты убийцы
Joined: Apr 2003
Posts: 8,264
Likes: 125
From: Cochabamba, Bolivia
In 2012 in PA we will be above the $70,701 mark for the 25% federal tax bracket b/c of a settlement awarded to us that is taxable married filing jointly. Up until the 2011 tax year year we were in the 15% after all deductions.
We would have to put over $1000 more a month into a 401k which is impossible to reduce it all back into the 15% range.
My question is, When we end up with 2012 taxable income above 70,701, do we pay the 25% on the entire amount or do we pay 10% on 0-$17,400; 15% on $17401-70,700 and 25% on everything else beyond 70,701?
We're seeing what we need to do to reduce our tax so we don't pay out the nose next february.
I've asked our current tax professional(who we're replacing next year b/c of a few errors in the past few years but they don't know it) to do a projected tax return for 2012.
We would have to put over $1000 more a month into a 401k which is impossible to reduce it all back into the 15% range.
My question is, When we end up with 2012 taxable income above 70,701, do we pay the 25% on the entire amount or do we pay 10% on 0-$17,400; 15% on $17401-70,700 and 25% on everything else beyond 70,701?
We're seeing what we need to do to reduce our tax so we don't pay out the nose next february.
I've asked our current tax professional(who we're replacing next year b/c of a few errors in the past few years but they don't know it) to do a projected tax return for 2012.
Our system is a marginal rate system meaning you, me, and Bill Gates pays the same percentage on the first tier. Of course deductions are okay, but credits are great. Google for tax credits. I think most of the home improvement credits are gone, but not 100% for sure. If not get a new door, windows, roof, hot water heater, etc. and reap the credits.
My favorite tax trick was to give to the university foundation in a restricted manner that could only be used in my department. Then I would take a "seminar" paid by the university as a vacation. A tax deductible vacation that is.
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Joined: Jan 2001
Posts: 25,967
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From: Jersey
If it was 25% on the entire income could you imagine earning $70,700 one year and then telling your boss next year to keep your raise because it would cost you more in tax?
Last edited by doopstr; Feb 26, 2012 at 07:53 PM.
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