1470: Breaking Bad

[PsychoLoco]

Originally Posted by Blitzgal

YOU are not being asked to pay more in taxes.

Actually, I already am asked to pay more in taxes. As a sole-proprietor, I have to pay the employee's portion of Social Security and Medicare (just like every worker in the U.S.), but then I also get to pay it again since I employ myself.

[Leentron3030]

Originally Posted by PsychoLoco

Actually, I already am asked to pay more in taxes. As a sole-proprietor, I have to pay the employee's portion of Social Security and Medicare (just like every worker in the U.S.), but then I also get to pay it again since I employ myself.

Your self employed social security and medicare tax is deducted at 50% to arrive at AGI. Adjustments to arrive at AGI are great because they reduce your taxable income. Along with the fact that you can also deduct all of your health insurance premiums for you and your dependents as well. As well as your business expenses.
Also, you are only paying 15.3% on your profits/income. That's basically the same tax rate as those making 35,000 a year and less. Those people also don't get all the deductions that you get though.

[PsychoLoco]

Originally Posted by Leentron3030

Your self employed social security and medicare tax is deducted at 50% to arrive at AGI. Adjustments to arrive at AGI are great because they reduce your taxable income. Along with the fact that you can also deduct all of your health insurance premiums for you and your dependents as well. As well as your business expenses.
Also, you are only paying 15.3% on your profits/income. That's basically the same tax rate as those making 35,000 a year and less. Those people also don't get all the deductions that you get though.

That's not necessarily a fair assumption. Yes, I get additional deductions, but I actually have to pay for those deductions or use my own assets. What you are saying is the equivalent of me telling anyone that works at a company that they need to take the cost of their healthcare paid by the company, depreciation on their work computer and office facilities, the percentage of electricity they use at the office, and all of the coffee they get at the office, add it all up and determine their gross income. I guess just so they can feel better about how much they are actually getting from an employer. SSI and Medicare are costs to the employer, just like all the other deductions.

[PsychoLoco]

But, things like this happen in America all the time. Maybe we need to change our behavior first, then worry about taking more or less money from people later.

[Leentron3030]

Originally Posted by PsychoLoco

That's not necessarily a fair assumption. Yes, I get additional deductions, but I actually have to pay for those deductions or use my own assets. What you are saying is the equivalent of me telling anyone that works at a company that they need to take the cost of their healthcare paid by the company, depreciation on their work computer and office facilities, the percentage of electricity they use at the office, and all of the coffee they get at the office, add it all up and determine their gross income. I guess just so they can feel better about how much they are actually getting from an employer. SSI and Medicare are costs to the employer, just like all the other deductions.

What's not fair? This is why Sole Proprietorships are called pass through taxation. You get to have all your income taxed at a lower % than if you were working for a corporation, deduct expenses, you even get to write off losses, etc. You have it good. SSI and Medicare are costs to the employer, correct. Costs that can be adjusted to ARRIVE at your AGI which reduces the amount of your income that may be taxed. That's a small price to pay for all the benefits of a sole proprietorship.

Maybe I am missing your point. What is the logic behind you saying this is the equivalent of making employees of a corporation do all that? You are running your own business, employees of a corporation are merely contributing members to a business. Employees of a corporation don't see profit and capital gains, you do. Employees of a corporation don't own the building or the computers they are doing work on, you do. Whoever owns the equipment amortizes the depreciation. Whoever is getting capital gains is also experiencing the expenses related to it. Employees of a corporation are getting paid to go into work, perform some duties, and then bounce. We're performing a service, not being a functioning sole proprietorship within a corporation.

[PsychoLoco]

Originally Posted by Leentron3030

What's not fair? This is why Sole Proprietorships are called pass through taxation. You get to have all your income taxed at a lower % than if you were working for a corporation, deduct expenses, you even get to write off losses, etc. You have it good. SSI and Medicare are costs to the employer, correct. Costs that can be adjusted to ARRIVE at your AGI which reduces the amount of your income that may be taxed. That's a small price to pay for all the benefits of a sole proprietorship.

Maybe I am missing your point. What is the logic behind you saying this is the equivalent of making employees of a corporation do all that? You are running your own business, employees of a corporation are merely contributing members to a business. Employees of a corporation don't see profit and capital gains, you do. Employees of a corporation don't own the building or the computers they are doing work on, you do. Whoever owns the equipment amortizes the depreciation. Whoever is getting capital gains is also experiencing the expenses related to it. Employees of a corporation are getting paid to go into work, perform some duties, and then bounce. We're performing a service, not being a functioning sole proprietorship within a corporation.

You’re saying that I shouldn’t complain about taxes or the amount of SSI/MC because I get other benefits/deductions. I’m saying that it is not fair to say that because of several factors.

Revenue – Expenses = Profit. The profit is what I take home as a SP, and is largely AGI at the end of the 1040 because I run my expenses through the company to get a higher % of deductibility. The expenses in a company vs a SP are virtually identical as far as what is allowable/deductible, and can be discretionary to a certain extent. For an employee of a company, their paycheck is Revenue and then they start with exclusions and deductions. I’m not automatically more wealthy as a SP because I can fully expense my medical insurance costs instead of having it limited to the payments in excess of 10% of AGI like normal employees. That’s still an out of pocket expense for me. Also, there are no matching 401k payments, no employer side SSI/MC paid for me, no paid vacations, no sick leave, no employer paid unemployment insurance or liability insurance. The benefits of being a SP also carry a huge risk and responsibility.

The “add it up” comment was in reference to this assumption. If I’m going to be automatically assumed to be better off as a SP because I can tweak expenses in my favor, then I want to automatically calculate the cost of having an employee at a company, and then add it to everyone’s paycheck so that I can let them know how much more they are getting on top of the take home pay. Should they then feel better about their situation just because it’s pointed out to them? Or is the reality of who is better off determined more by how that person personally manages themselves? In other words, I’m probably better off because of how I treat the system, not because of how the system treats me.

[Blitzgal]

Originally Posted by PsychoLoco

Actually, I already am asked to pay more in taxes. As a sole-proprietor, I have to pay the employee's portion of Social Security and Medicare (just like every worker in the U.S.), but then I also get to pay it again since I employ myself.

Again, when we're talking revenue problems in this country, we're talking about companies who are shirking millions of dollars in tax payments through various loopholes, offshore holdings, and in the taxpayer subsidies and entitlements they receive. YOU are not being asked to pay more in taxes. YOU are a drop in the bucket.

Taxes today are at their lowest levels since 1950. We can deal with a lot of the problem by simply allowing the Bush tax cuts to expire....they had ten years to create jobs, they haven't, time to move on.

[Leentron3030]

Originally Posted by PsychoLoco

You’re saying that I shouldn’t complain about taxes or the amount of SSI/MC because I get other benefits/deductions. I’m saying that it is not fair to say that because of several factors.

My original point wasn't to say "you shouldn't complain" but I see how it came off that way. When I first saw your post about having to pay both parts of the FICA tax, I felt like you weren't painting the whole picture. Someone can go online and say "Chris Brown is a good dancer", and he is, but that's not all he is. The whole picture is "Chris Brown is a good dancer who beat the crap out of his girlfriend before a public appearance and acted like a child during following appearances." When you said you were a sole proprietor that pays both parts of FICA, I wanted to clear it up a bit more and state that yes you may pay both parts, but you also get to deduct half and enjoy other tax advantages of a sole proprietorship. There are people on here who don't have knowledge of this stuff and I wouldn't want them thinking a sole proprietorship means "you pay double". The ability to write off half was created to avoid double taxation.

Now I myself wouldn't complain about paying both parts because I agree with the point behind it. If you want to complain that you pay both parts, you can. I didn't mean to come off that way.

[Cart Horse]

Originally Posted by DWarrior

Chemda's into chicks now, Keith's into architects.

Chemda's into chicks now, Keith's into archichicks.

[BrianAlt]

I'm FB friends with my wife's co-worker. I've been to her wedding and we went out to dinner with them at least a couple of times.

One day I decided to check out her pictures (she's a hot little blonde, to be honest). She has pictures of her with friends in Vegas, Puerto Rico, other places. In most of the pictures she's dancing and drinking, many with guys in the group. There must be a couple hundred pictures of her trips. She has two pictures of her with her husband.

After checking out the pics I turned to my wife and said, "these people are not together!". She asked what I was talking about and I told her the above. She said, naaaaaah! But I still doubt it.