michaelkb[at]hotmail.com wrote:
- quote -

Then here's a free tip: Since your wife didn't work (I
assume you mean she had NO income last year), why not file
a joint return? You may, you know.

ChEAr$,
Harlan Lunsford, EA n LA

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<michaelkb[at]hotmail.com> wrote:

- quote -

Why?

"None of your business" is an acceptable answer. I just
want to make sure you know you can file jointly even if she
has no income and that by filing MFS you are costing
yourself money.

--
Phil Marti
Clarksburg, MD

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joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

Thnx for the response. My wife doesn't work. Both years we
were married filing seperately.

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michaelkb[at]hotmail.com wrote:

- quote -

Not completely and not yet,Michael. Somewhere up there you
mentioned a wife. How did you (and her) file in 2005?
Jointly? And what status are you "trying" to use for 2006?

Really, I think that's the key.

ChEAr$,
Harlan Lunsford, EA n LA

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joetaxpayer wrote:

- quote -

Good point, Joe. You wouldn't believe how many clients I
meet that "like getting a refund back." That annoys me to
no end.

Sorry for the off-topic comment.

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Thanks for all of your help!

For some clarification:
I filed 3 children both years
I filed 9k of home interest both years
I had 2k in real estate taxes both years
Last year I had to pay penalty of 600 because of too much
writing off?
And 300 this year.
They also took 600 FROM our child-refund for whatever reason
.... I'm guessing it has to do with salary and write-offs...
another penalty.
They did not do that the year before.

Does this make since?

Thanks again for your replies!

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joetaxpayer wrote:

- quote -

My Bad - for marries filing joint, the 15% bracket goes
right to $61,300. You need to make sure your filing status
is correct on the tax software. Something is wrong....

JOE

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ichaelkb[at]hotmail.com wrote:

- quote -

It appears that the question is why the tax was so low in
2005. Did you claim one or more credits in 2005? Maybe an
education credit?

The 2006 tax looks to be about right but 2005 is way too low.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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<michaelkb[at]hotmail.com> wrote:

- quote -

Seems very reasonable. I didn't do any calculations but
your AGI went up about $11,200 and you are in the 25%
bracket and your tax went up about 2500, and that even
includes $400 of AMT.

If anything, I'd be OK with a slightly higher tax.

--
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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<michaelkb[at]hotmail.com> wrote:

- quote -

Taxable income went up $9865.

Tax went up $2528.

- quote -

The marginal tax rate on the increased income is 25.6%.

What is the issue?

Seth

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<michaelkb[at]hotmail.com> wrote....

- quote -

Welcome to the next level of progressive taxation

The two summaries are confusing your analysis.

Actually as a Married Filing separate filer, based on the
numbers I see, you were in the 10% & 15% brackets in 2005 .

In 2006 the taxable income increase of $9865 bumped the last
$7186 of that income into the 25% bracket.

Do the numbers from the TXI point to the Income Tax alone:

YEAR----|------2005-----|--------2006---|
TXI -------|---$27971-----|----$37836----|
------------|------------------|-----------------|
10%------|------$730.00--|---$755.00----|
15%------|----$3100.65--|--$3465.00----|
25%------|----$------------|--$1796.50----|
------------|-----------------|------------------|
Inc Tax---|----$3830.65--|--$6016.50----|

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<michaelkb[at]hotmail.com> wrote:

- quote -

It looks fine to me. Your taxable income went up about
$10,000. In the 25% bracket your tax would go up about
$2,500, which is exactly what happened.

--
Phil Marti
Clarksburg, MD

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michaelkb[at]hotmail.com wrote:

- quote -

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

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michaelkb[at]hotmail.com wrote:

- quote -

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.

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- quote -

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

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michaelkb[at]hotmail.com wrote:

- quote -

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

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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/U...TaxComparo.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!

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