BIG Difference in some numbers from '05 to '06

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Subject Author Date BIG Difference in some numbers from '05 to '06 michaelkb 01-21-2007  Re: BIG Difference in some numbers from '05 to '06 Harlan Lunsford 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 Don Priebe 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 Dave Filpus 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 joetaxpayer 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 joetaxpayer 01-23-2007  Re: BIG Difference in some numbers from '05 to '06 Phil Marti 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 Taxmanhog 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 Seth Breidbart 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 Arthur Kamlet 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 L K Williams 01-22-2007  Re: BIG Difference in some numbers from '05 to '06 michaelkb 01-23-2007  Re: BIG Difference in some numbers from '05 to '06 Harlan Lunsford 01-24-2007  Re: BIG Difference in some numbers from '05 to '06 kastnna 01-23-2007  Re: BIG Difference in some numbers from '05 to '06 michaelkb 01-31-2007  Re: BIG Difference in some numbers from '05 to '06 Phil Marti 01-31-2007  Re: BIG Difference in some numbers from '05 to '06 Harlan Lunsford 01-31-2007
Posted by michaelkb on January 21, 2007, 4:18 pm Please log in for more thread options At least, big to me. I took out my social and last name, but please see the in the screenshot: The left is 2006 and the right is 2005: http://www.thefreeimagehosting.com/Uploads/Images/4560717812500TaxComparo.jpg My conxern is the "total tax" number. My salary went up about 10k, but since everything else is the same, I don't understand why this number varies so much. I believe I went from a 25 to 28% tax bracket, but it still seems so far off from last year. My wife did some research, but basically we don't really know how to track this down and get to the bottom of it. Any hints anyone? She was reading something about tentative taxes having to do with it.. but we're not sure. Thanks in advance! << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Harlan Lunsford on January 22, 2007, 3:40 am Please log in for more thread options michaelkb@hotmail.com wrote: > At least, big to me. I took out my social and last name, but > please see the in the screenshot: > > The left is 2006 and the right is 2005: > http://www.thefreeimagehosting.com/Uploads/Images/4560717812500TaxComparo.jpg > > My conxern is the "total tax" number. My salary went up > about 10k, but since everything else is the same, I don't > understand why this number varies so much. I believe I went > from a 25 to 28% tax bracket, but it still seems so far off > from last year. My wife did some research, but basically we > don't really know how to track this down and get to the > bottom of it. Any hints anyone? She was reading something > about tentative taxes having to do with it.. but we're not > sure. You probably left off some credits on your 2005 example, however the real biggie that I see, is that since you say you are married, WHY are you computing tax as either single or (probably) married filing separate? I'm guessing that y'all have two children. ChEAr$, Harlan Lunsford, EA n LA << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Don Priebe on January 22, 2007, 3:40 am Please log in for more thread options > The left is 2006 and the right is 2005: > http://www.thefreeimagehosting.com/Uploads/Images/4560717812500TaxComparo.jpg Random thoughts ... Your taxable income is the $15K to $60K range MFJ, so you are in the 15% bracket. Your taxable income went up by $9,865 which would result in a $1,480 increase in taxes. Your actual taxes went up by $2,528, so there is a $1,000 unknown. I notice you show $2,400 of credits in 2006. What kind of credits are these and what were they last year? Did your child turn 17? Your AGI too low to be is in the phase out range for education credits, so that's not it. Did you switch from a Hope to a Lifetime Learning because you child is now a Junior? Did you have AMT last year? -- Don EA in Upstate NY << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Dave Filpus on January 22, 2007, 3:40 am Please log in for more thread options michaelkb@hotmail.com wrote: > At least, big to me. I took out my social and last name, but > please see the in the screenshot: > > The left is 2006 and the right is 2005: > http://www.thefreeimagehosting.com/Uploads/Images/4560717812500TaxComparo.jpg > > My conxern is the "total tax" number. My salary went up > about 10k, but since everything else is the same, I don't > understand why this number varies so much. I believe I went > from a 25 to 28% tax bracket, but it still seems so far off > from last year. My wife did some research, but basically we > don't really know how to track this down and get to the > bottom of it. Any hints anyone? She was reading something > about tentative taxes having to do with it.. but we're not > sure. First problem that I see is that the 2006 Tentative Tax shown is for filing "Single" not "Married filing jointly". Check to see if you checked the Single box instead of Married box. You may have this mistake in both years. However, the increase in total tax is about $2500. GIven that the Total Income increased by $10K and you are in the 25% bracket, the increase in total tax should be about $2500. That's what tax brackets do. The fact that you have so many tax credits makes the increase look so large relative to total tax. << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by joetaxpayer on January 22, 2007, 3:40 am Please log in for more thread options michaelkb@hotmail.com wrote: > At least, big to me. I took out my social and last name, but > please see the in the screenshot: > > The left is 2006 and the right is 2005: > http://www.thefreeimagehosting.com/Uploads/Images/4560717812500TaxComparo.jpg > > My conxern is the "total tax" number. My salary went up > about 10k, but since everything else is the same, I don't > understand why this number varies so much. I believe I went > from a 25 to 28% tax bracket, but it still seems so far off > from last year. My wife did some research, but basically we > don't really know how to track this down and get to the > bottom of it. Any hints anyone? She was reading something > about tentative taxes having to do with it.. but we're not > sure. Michael, your (taxable) income rose from $27,971 to $37,836 or $9865. Your tax rose from $1479 to $4007 or $2528. You are in the 25% bracket, which in 2006 was for joint income over $30,650. There are other anomalies that allow or remove certain credits or deductions, thus creating phantom brackets, but you can see http://www.fairmark.com/refrence/2006reference.htm for the easiest-on-the-eyes view of rates. One bit of advice I'm compelled to offer: First, do you have access to a 401(k)? If you put some of that raise in it, you can save 25% on taxes by doing so. If your employer matches the deposit, put in enough to get the match, it's free money. If they don't have a 401(k), consider using IRAs to save. Second bit, is that you are getting refunds in both years of a huge portion of the tax withheld. Raise your W4 exemptions to reduce withholdings. Put the money in the bank, if you feel you don't want to put it away long term. Using Uncle Sam to save with no interest on your money isn't a great idea. Just my thoughts. JOE << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Similar Threads Posted Two candidates Tax Plans - better numbers? October 19, 2008, 4:58 pm AMT Difference June 22, 2009, 5:14 pm Re: 401K vs IRA maximum annual contribution limit difference April 11, 2006, 3:31 am Re: 401K vs IRA maximum annual contribution limit difference April 14, 2006, 4:04 am difference between adding short dividends to cost basis or investment interest January 22, 2008, 5:41 pm