Social Security Gotcha
02-10-2012 | 03:13 PM
#12
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From: leaning to the left
Actually my read on this is that they did go after the cap for two months. If you make more than two months worth of the cap, then THAT money will be taxed at 2%, anything under the cap will be taxed at 4.2%. Doing it for only two months confuses the issue which is probably why they did it. If it becomes this way for the year, then look what happens. If you do the math, someone making 110,000/year payed 6.2% before (paying 6820 in social security tax). Now they pay 4.2% or $4620 ....an $1800 decrease. If you make 110,001, then the first $110,000 is payed at 4.2% and the last dollar is payed at 2%. So you pay $4620.02.
If you make $200,000 a year (the magical number for being "rich" according to the Marxist in Chief) then you will pay 4.2% on everything under $110,000 and 2% on everything over.....so the extra $90,000 above the "cap" is taxed at 2% for an increase of .....wait on it....wait on it....$1800.
So if you make exactly $200.000 you will pay 6.2%......which is an increase of 2% over the "Holiday".....Anything over that is a huge increase as that income not previously available to tax is now taxed at 2%. Which is probably why the psuedo limit (more a dividing line) is now at $110,000. It has been going up every year. This is just a device so Obama can keep his promise of not raising taxes on those making under $200,000.
Like I said, it is no longer a limit, just a dividing line. If this becomes permanent, If you make $500,000 a year, you will pay $4620 on the first $110,000 and $7800 on the next $390,000 for a grand total of $12420 in social security tax which is almost a whopping 87% net increase in social security taxes paid from before the holiday when you were "Maxed out at $6820".
They went after the limit with this....they did it for two months to confuse the issue because the cowards in the Senate and the House did not want to admit what they did. They went for a temporary fix.....now the easiest thing to do is extend it indefinitely. As a side note, the dividing line for the 99th percentile of earned income for a single earner in the US is right at about the $200,000 mark. This is exactly why you are seeing all this emphasis about the 99% these days.
This does nothing except fuel class warfare as if someone making over $200,000 is the top 1%, then there is no way the additional taxes will help pay for any "Shortfall"
If you make $200,000 a year (the magical number for being "rich" according to the Marxist in Chief) then you will pay 4.2% on everything under $110,000 and 2% on everything over.....so the extra $90,000 above the "cap" is taxed at 2% for an increase of .....wait on it....wait on it....$1800.
So if you make exactly $200.000 you will pay 6.2%......which is an increase of 2% over the "Holiday".....Anything over that is a huge increase as that income not previously available to tax is now taxed at 2%. Which is probably why the psuedo limit (more a dividing line) is now at $110,000. It has been going up every year. This is just a device so Obama can keep his promise of not raising taxes on those making under $200,000.
Like I said, it is no longer a limit, just a dividing line. If this becomes permanent, If you make $500,000 a year, you will pay $4620 on the first $110,000 and $7800 on the next $390,000 for a grand total of $12420 in social security tax which is almost a whopping 87% net increase in social security taxes paid from before the holiday when you were "Maxed out at $6820".
They went after the limit with this....they did it for two months to confuse the issue because the cowards in the Senate and the House did not want to admit what they did. They went for a temporary fix.....now the easiest thing to do is extend it indefinitely. As a side note, the dividing line for the 99th percentile of earned income for a single earner in the US is right at about the $200,000 mark. This is exactly why you are seeing all this emphasis about the 99% these days.
This does nothing except fuel class warfare as if someone making over $200,000 is the top 1%, then there is no way the additional taxes will help pay for any "Shortfall"
WRONG!! Good grief, that is not at all what the recapture is about. You need to take a break from Faux news and go talk to an accountant.
02-10-2012 | 04:02 PM
#14
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From: 777, sofa
"When I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean -- neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - - that's all."
(Through the Looking Glass, Chapter 6)
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - - that's all."
(Through the Looking Glass, Chapter 6)
02-10-2012 | 04:40 PM
#15
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From: 767 FO
Let me know if this is close:
the political, economic, and social principles and policies advocated by Marx; especially: a theory and practice of socialism including the labor theory of value, dialectical materialism, the class struggle, and dictatorship of the proletariat until the establishment of a classless society.
Your right he missed the definition of marxist by a mile (he only got 7 out of 8), dialectical materialism is supposed to result in maximum efficiency. No way we are striving for any efficiency.
the political, economic, and social principles and policies advocated by Marx; especially: a theory and practice of socialism including the labor theory of value, dialectical materialism, the class struggle, and dictatorship of the proletariat until the establishment of a classless society.
Your right he missed the definition of marxist by a mile (he only got 7 out of 8), dialectical materialism is supposed to result in maximum efficiency. No way we are striving for any efficiency.
Last edited by FDXLAG; 02-10-2012 at 04:54 PM.
02-10-2012 | 04:42 PM
#16
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From: B777 FO FDX, C130 ANG
"The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
Employees should consult with their personal tax advisor regarding the specific tax impact as it varies based on individual facts and circumstances.
Managers, please provide a copy of this notice to your employees without e-mail access.
U.S. Payroll Services"
The way I read this is that you will pay 4.2% into SS until you reach the 110,100/12 (9175x2) number of 18,350 for two months. So in actuality it is still a tax cut until you reach said amount during Jan-Feb months then the rest is taxed at the normal rate of 6.2%. I would imagine that the total amount paid into SS will be reduced by the difference between $770.70 and $1137.70 which is $367 dollars if you make at least $110,100.
It's funny, but as I remember it the republicans were against any Soc Sec payroll tax cut at all, and the dems got them to at least do this for 2 months. Eitherway, this should save the neediest of FDX pilots at least $367 which if we got what I think I remember the White House wanting (another year of 4.2%) would have saved us $2202 like last year.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
Employees should consult with their personal tax advisor regarding the specific tax impact as it varies based on individual facts and circumstances.
Managers, please provide a copy of this notice to your employees without e-mail access.
U.S. Payroll Services"
The way I read this is that you will pay 4.2% into SS until you reach the 110,100/12 (9175x2) number of 18,350 for two months. So in actuality it is still a tax cut until you reach said amount during Jan-Feb months then the rest is taxed at the normal rate of 6.2%. I would imagine that the total amount paid into SS will be reduced by the difference between $770.70 and $1137.70 which is $367 dollars if you make at least $110,100.
It's funny, but as I remember it the republicans were against any Soc Sec payroll tax cut at all, and the dems got them to at least do this for 2 months. Eitherway, this should save the neediest of FDX pilots at least $367 which if we got what I think I remember the White House wanting (another year of 4.2%) would have saved us $2202 like last year.
02-10-2012 | 04:47 PM
#17
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From: leaning to the left
I can't leave it at that...
The basic reason for the recapture is that the 2% break is only for money earned the first two months of the year. Soc. Sec withholdings are still stopped when the taxpayer reaches the $110,000 limit. Without the recapture, high income earners would possibly gain a tax advantage over those that do not earn over $110,000/yr.
Most easily explained by:
Taxpayer #1 earns $9167/mo. Jan - Feb he pays 4.2% = $770. Mar -Dec he pays 6.2% = $5684, for a yearly total of $6454.
Taxpayer #2 earns $55000/mo. Jan and Feb he pays 4.2% = $4620. Mar - Dec he pays nothing, for a yearly total of $4620.
So, the guy making $660,000/yr would be paying $1834 less than the guy making $110,000/yr. That of course, is a worst case scenario. But, I thought it would be easiest for the dittoheads to follow.
That's the reason. If they agree to a complete year of 4.2%. The recapture will be unnecessary.
The basic reason for the recapture is that the 2% break is only for money earned the first two months of the year. Soc. Sec withholdings are still stopped when the taxpayer reaches the $110,000 limit. Without the recapture, high income earners would possibly gain a tax advantage over those that do not earn over $110,000/yr.
Most easily explained by:
Taxpayer #1 earns $9167/mo. Jan - Feb he pays 4.2% = $770. Mar -Dec he pays 6.2% = $5684, for a yearly total of $6454.
Taxpayer #2 earns $55000/mo. Jan and Feb he pays 4.2% = $4620. Mar - Dec he pays nothing, for a yearly total of $4620.
So, the guy making $660,000/yr would be paying $1834 less than the guy making $110,000/yr. That of course, is a worst case scenario. But, I thought it would be easiest for the dittoheads to follow.
That's the reason. If they agree to a complete year of 4.2%. The recapture will be unnecessary.
02-10-2012 | 04:52 PM
#18
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From: 767 FO
Good discussion. Lets add that the 6.2% only covers half of the money we pay into the system. Second the Repubs know that the 2% reduction is only putting SS into a bigger whole that our kids will have to dig out of. Since the Dem voters kids wont actually work, I can see why they dont mind piling more debt on the repub kids to pay off.
02-10-2012 | 05:00 PM
#19
Nice lookin' tree, there!
Joined: Sep 2006
Posts: 2,242
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From: Tool-Box, old man
Just got the email from the company about the little gem Congress buried in the 2% payroll tax cut extension. Seems those of us with a little senority who are doing well will have to pay a 2% income surtax in 2013 on any money above the threshold that was earned in January and February of this year. So, bottom line, better tuck that 2% "pay raise" away because they are coming after it next year. Did anybody know about this?
I just read the e-mail, myself, about 10 minutes ago.
Cheers,
fbh
02-10-2012 | 05:06 PM
#20
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From: Dispersing Green House Gasses on a Global Basis
The way I heard it was the rebubs wanted a full year and the dems would only go for 2 months at a time - that way when they extend it again it makes it look like they are working hard for us
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