Taxes

[mom_of_jcchlsm]

This applies only to US residents, of course, and more narrowly only to those who have to file taxes each year.

I got ours out this morning! Yea!!!!!! Am I first among our group to get that job done?

Hubby and I disagree on an item: if you get back more than you paid in, does that count as income and should you pay tithing on it?

And how do you all feel about the current tax system? Let's keep this civil!

[prisonchaplain]

This applies only to US residents, of course, and more narrowly only to those who have to file taxes each year.

I got ours out this morning! Yea!!!!!! Am I first among our group to get that job done?

Hubby and I disagree on an item: if you get back more than you paid in, does that count as income and should you pay tithing on it?

And how do you all feel about the current tax system? Let's keep this civil!

First, I already got my refund back--last week!

Second, do you tithe on your income or on your "increase?" We just went through this too. We had sold our house about three years ago, and made a good amount of money. At the time I said, "We're supposed to tithe on our income. Everything else is discretionary." This year we both sensed that we were wrong, that we should tithe on our "increase." So, we had to budget quite an increase on our giving this year (we're spreading it over 12 months). On the other hand, praise God, the monies are there for us to do it.

So, yeah...I'd tithe on the "increase."

On the other hand, what about Social security--since you pay into the system during your working years, haven't you already tithed on it?

[mom_of_jcchlsm]

My feeling too, PC. I feel we should take the ammount we get back, subtract the ammount we paid in, and tithe on the rest.

SS income? - now there's a stretch. Sure, I can see not tithing that, at least until you hit whatever ammount you originally paid in. Who wants to do the math, though? Isn't it better to tithe on it anyway, even if it's not technically required? I'd feel like I was living the letter of the law and not the spirit.

I know people who set aside their tithing each month and put it into CDs or an interest-earning savings account. Then at the end of each year, they turn over all the tithing plus 10% of the interest earned by holding back that tithe and keep the rest. Letter of the law? Sure. But I feel like that's cheating.

When I was serving in the Air Force, we had issues too. Actual pay for junior enlisted members is minimal. But every month we got "BAQ" and "BAS" and other benefits. BAQ equalled our rent payment, and was meant to replace the base housing that was unavailable to us at the time. I felt (and still feel) that the BAQ was part of my pay. And later when we did live on base, I believe the value of the "free" housing provided was a part of my pay, and should have been tithed.

If you take it to an extreme, what about cultures in which no money ever changes hands - a barter system? If I trade you a haircut and an hour of weeding in the garden for an oil change, what can either of us give the Lord? There is no first tenth, though both of us have labored and have earned something we want and need.

Personally, I think the Lord's plan - a flat percentage - is a good model to follow. Though there will always be wiggle room for those who look for it (as illustrated in the examples above), a flat tax is so much simpler and so undisputably fair. It would take a little time for the economy to shake out its feathers and undo the damage from living so long with subsidies and behavior-modification taxes, but in the end, it would be much better.

[ldsgurl_2002]

i have a question...and i have searched the internet and not found it...i turn 18 like 6 days before the deadline...so do i havve to file my taxes? i haven't made any money but do i still have to file them? i'd really like to know the answer!!!!!!!!!!!!!

[lisajo]

i have a question...and i have searched the internet and not found it...i turn 18 like 6 days before the deadline...so do i havve to file my taxes? i haven't made any money but do i still have to file them? i'd really like to know the answer!!!!!!!!!!!!!

Not if you dont have a job, your parents just cant claim you anymore

[Jason]

<div class='quotemain'>

i have a question...and i have searched the internet and not found it...i turn 18 like 6 days before the deadline...so do i havve to file my taxes? i haven't made any money but do i still have to file them? i'd really like to know the answer!!!!!!!!!!!!!

Not if you dont have a job, your parents just cant claim you anymore

Unless she's going to college. They they can claim her until she's 21, right?

[lisajo]

<div class='quotemain'>

<div class='quotemain'>

i have a question...and i have searched the internet and not found it...i turn 18 like 6 days before the deadline...so do i havve to file my taxes? i haven't made any money but do i still have to file them? i'd really like to know the answer!!!!!!!!!!!!!

Not if you dont have a job, your parents just cant claim you anymore

Unless she's going to college. They they can claim her until she's 21, right?

really man i could have claimed my kid in collage Bummer taxes are already in

[BenRaines]

I believe you can claim a dependent child as long as they depend on you for 50% or more of their support. While in school you can claim tuition paid and as a dependent.

If she is 18 and has no job, even if not in school she is a dependent.

As far as the tithing issue I agree with PC it is your increase. I would add not your increase of your net worth. You don't tithe on the value of the increase of your house until it is realized. You also don't tithe to get a break if your investments are up or down unless you are selling them and realizing gains or losses.

I think it is nitpicking to worry about Social Security. Only half of the premiums paid in each year are from your income. Should you include the 50% that is paid by your employer as income when it is paid in? Then you would have a higher basis when it is time to withdraw. I know I am going to just pay on my SS income as if it were all increase.

Tithing on tax return? Do you tithe on net income or gross. If you tithe on net income based on your tax return then you should pay tithing on return. If you tithe based on your gross earnings on W-2 before any deductions then no that would be double tithing on your tax refund.

Ben

[mom_of_jcchlsm]

Ben,

I think you're missing the point on the tax return. We do tithe on pre-tax earnings, but because of the child tax credit, we actually get more of a refund than we ever pay in. For example, this year we paid in aprox $900 (because we have so many examptions (lots of kids!), very little comes out of my husband's check). But we'll be getting a check for more than $7000 as a "refund" - this is a total refund of the ammount we paid in, plus a portion of the child tax credit (the max we're allowed). I contend that we should pay tithing on the $6100 difference as unearned income. My husband disagrees, and since 1) he's the priesthood holder in the family and 2) it's his income to begin with, I feel I have no override.

LDS Gurl 2002,

If you're unsure if you have to file or not, go to:

http://www.irs.gov/individuals/article/0,,id=96623,00.html

[BenRaines]

Yes I clearly missed the point, since I didn't have all the information :)

If you receive back more than you paid in. If only paid in 900 and gettting back 7000 then you do have an increase of 6100. Money that has not been tithed on if you tithe on your gross income.

In my opinion it would be something tithing should be paid on.

Ben

[prisonchaplain]

Update on my views:

1. We'll be tithing on our social security income when the time comes. While there may be some "overpaying" of the tithe, the Lord will look on it as offerings, and surely bless it.

2. Tax returns that are greater than the amount paid in might be seen as government assistance. Suddenly, I'm in a quandry here. I did not pay tithes on the grants I got to attend college. The government recognizes the social good of families raising children, and supports that endeavor with reduced taxes, and, in some cases an "earned income credit." Do you tithe on scholarships? Straight cash awards? I still tend to agree, it is more blessed to over-tithe than to risk undertithing. However, I did not tithe on college scholarships or grants.

[BenRaines]

This is not to criticize how you did it PC but was not having the govt paying or whom ever gave you the gift in the form of scholarship an increase to you? I know that in learning about tithing we encourage our children to tithe on gift money given them, birthday's, good grades, etc. Is it only that we are teaching or is it increase.

Ben

[ldsgurl_2002]

LDS Gurl 2002,

If you're unsure if you have to file or not, go to:

http://www.irs.gov/individuals/article/0,,id=96623,00.html

thanks!! i did it and it doesn't look like i need to

[Guest MrsS]

This applies only to US residents, of course, and more narrowly only to those who have to file taxes each year.

I got ours out this morning! Yea!!!!!! Am I first among our group to get that job done?

Hubby and I disagree on an item: if you get back more than you paid in, does that count as income and should you pay tithing on it?

And how do you all feel about the current tax system? Let's keep this civil!

Personally, I pay taxes on my GROSS [before deductions are taken out] income, not the net [after all the deductions are taken out]. Thus IF I get a refund, then it is money I have already paid tithing on.

I also pay tithing on all interest earned in savings accounts, money markets, etc. each year as they accrue. That way when I withdraw the money, I don't pay tithing on it. Already did that.

I think the current tax system is way bad. They should "get" a clue from the LDS Church. Everyone ~ business's included (most especially business's) should pay a 10% tax ~ straight across. Let the states and the feds figure out who gets what portion of that 10%. There will be no refunds ever! I can easily live with 20% less of my gross income. 10 to God, and 10 to 'de gubernment'.

[Palerider]

Mrs S.......I agree with that...I pay tithing on my gross and interest....if I get a return from IRS....I don't have to pay tithe cause I already did.....or I contribute more to Fast Offerings.....

[prisonchaplain]

This is not to criticize how you did it PC but was not having the govt paying or whom ever gave you the gift in the form of scholarship an increase to you? I know that in learning about tithing we encourage our children to tithe on gift money given them, birthday's, good grades, etc. Is it only that we are teaching or is it increase.

Ben

You raise an interesting question. Like I said, a true quandry. Most college students get $1000s, if not $10,000s in grants and scholarships. So, in addition to student loans, do we suggest to college graduates that they have a tithe-debt that may add additional thousands? I am not saying we should not. However, for many college students this would indeed be huge.

Just to muddy the waters more. Most public universities use tuition for about 20-25% of its costs. So, even a student that paid full tuition, in reality, is getting 75% support from the state. Is that increase? If s/he pays $8000 per year in tuition (WA State), does that mean that in reality there was a $16000 increase--that the student "owes" God $1600?

In my own case, I won $1000 in a writing contest a few years back, and did tithe $100 on it (in addition to paying taxes on it). But, scholarships? Maybe. Or maybe the reality that I'll be tithing on a much better income as a result of the education suffices?

I wonder how many college graduates at this site suddenly find themselves running for calculators?

[mom_of_jcchlsm]

Well, the "flat tax" plans I've seen call for more like a 17 to 20% tax. But the theory is that when things stabilize, wages will increase (because companies will not be paying as much tax) and prices on goods and services will come down a little.

Here's a clip from Wikipedia on three versions of flat tax:

Flat tax with deductions

The most common flat tax implementation proposition, and the type that has been proposed in the United States by Steve Forbes in his presidential campaign and by ###### Armey to congress, calls for base deductions for people and dependents. For example, the Armey proposition called for deductions of $26,200 for married couples filing jointly, $13,100 for individuals, $17,200 for single head of households, plus $5,300 for each dependent. After those deductions (and no other), each family would pay a 17% rate on the difference. Businesses would pay a flat 17% rate across all profits. Similar proposals have been discussed with different rates and deductions.

Under Steve Forbes’ plan for his 1996 and 2000 presidential campaign, a family of four would pay no income tax on its first $42,000 dollars spent. Savings are exempt. Spending above that amount would be taxed at a flat rate of 17% (if the tax is included as part of the tax base) or 20.5% (if the tax is on top of the base), so that a family of four that spends $43,000 dollars would forfeit $205 to the government.

As the "pure flat tax" has proven difficult to sell, "modified" varieties of the flat tax have been proposed which would allow deductions for specific items, but would eliminate most existing deductions. Commonly, charitable deductions and home mortgage interest are the items discussed, as they are highly popular and often used by current taxpayers.

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Negative income tax

Another flat tax variant that has been extremely popular among US economists has been the Negative Income Tax that Milton Friedman proposed in Capitalism and Freedom. The basic idea is the same as a flat tax with personal deductions, except that it implements a neutral wealth redistribution system which avoids any possibility of the incidence of welfare trap, whilst distributing the money in what economists regard as the most efficient manner - as cash (as opposed to food stamps, medicaid, etc). Under an NIT, a deduction system and flat tax rate would exist as in previously mentioned flat tax schemes. However, people would be able to collect the tax rate of the difference between their deduction and their true income. As an example, let us say that we have a flat tax system where each adult gets a $20,000 deduction, married couples filing jointly receive a $40,000 deduction, and either receives an additional $7,000 in deductions per dependent. The flat tax rate would be 20%. Under such a system, a family of four making $54,000 a year would pay no taxes. A family of four making $74,000 a year would pay 20% on the difference of $20,000, or $4,000 in taxes, just like the previously mentioned personal deduction systems. The difference comes in people who make less than the deduction: if the same family made $34,000 a year, they would pay "negative income tax" (in other words, they would receive money). In this case they would receive a check for $4,000. Such a system would be intended not only to replace the United States' current tax structure, but also its current welfare structure of food stamps, medicare/medicaid, social security, etc. Much of the spirit of this type of reform has been achieved in the form of the Earned Income Tax Credit, although without corresponding drops in other types of welfare spending. Some critics of the NIT do not like that it does not have a work requirement in order to receive welfare, which some welfare systems have recently adopted. Others see the wealth redistribution as a subsidy to industries that use low cost labour - it has been argued that people who make this point would probably be proponents of a true flat tax, as it could be said that the NIT is no more a subsidy to low skill labour-intensive industry than other welfare mechanisms for the poor that already exist.

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True flat tax

Lastly there is the "true" flat tax. It has never been proposed by a politician or public figure (probably out of fear of political backlash) but The Economist featured an April 14, 2005 article on its mechanics entitled The flat-tax revolution. If the idea of the personal deduction flat taxes proposed in the United States by the likes of ###### Armey and Steve Forbes is tax simplification via a reduction of "corporate welfare" through politicians handing out special deductions and for families to have the ability to send in their tax form on a postcard, then the true flat tax is the ultimate simplification. Under such a system, the flat rate would be applied to every dollar of taxable income and profits without exception or exemption. One possible benefit to such a system is that a situation may exist whereby nobody could be construed as receiving a favourable or "unfair" tax advantage. No industry receives special treatment, the family with 10 children does not receive special treatment, etc. Further, the cost of tax filing for both citizens and the government could be further reduced, as under a true flat tax there would be no need for the majority of Americans to send in an income tax form. Employers could simply withhold the flat tax amount and send it in themselves without their employees ever having to bother with forms.

[Palerider]

I like the idea of a flat tax.......and sometimes think of becoming Libertarian(sp)....LOL