I'm the perfect storm for getting killed by this tax plan: high tax location (NYC) and all W2 income.
I wish more people understood this. People who work for a living pay more tax than those who have income from other sources (savings, investments, dividends, etc). If that's not a rigged system, I don't know what is.
I agree with Blue. I'd also like to add that I have NO IDEA why a real estate professional or a pizza shop owner gets to be taxed less than a teacher, a lawyer, or a doctor. Why the 20%? It's not like lawyers or doctors don't get to run their own "small business".
Old thread, I know. But this response(s) made me think about a conversation I had the other day with some co-workers.
I'm a teacher, teaching summer school to fund my IRA. Two of my associates are also working summer school, because both got killed (their words) on their taxes this year. They both claim they owed 5K more. I know that neither of them are saving anything for retirement and are not taking advantage of our district's 403/457 plans. It's also possible that they did not have their personal deductions set correctly. I didn't ask. They are the perfect example of all W-2 income.
I, OTOH, saw a combined refund of $1300, and I make more. But I'm maxing out 403/457, as well as HSA deductions. I also have a passive loss from an estate that helped a little. I had even sold some stock at a gain to cover an emergency, and still got money back.
I can't help but think they'd be better off tax wise if they saved more. I didn't say anything, but just commiserated with them.