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#1 of 29 Old 07-26-2011, 06:56 PM - Thread Starter
 
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i am currently a sahm. both dc will be FT school age next year, so potentially I could look for a job. ONE of my reasons for not wanting to get a "normal" job is that with my dh income plus our rental house income, after all deductions, we are less than a $1,000 away from the next tax bracket of 25%. I just have this ISSUE with knowing that all the income I make will be taxed at 25%. Any thoughts on my issue?

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#2 of 29 Old 07-26-2011, 07:53 PM
 
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This isn't exactly my area but my understanding is that only your income over the tax bracket cutoff will be taxed at 25%. So if the cutoff is ten dollars and you make twelve? Only two of those dollars will be taxed at 25%.

 

Is this right?


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#3 of 29 Old 07-26-2011, 10:56 PM
 
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I hear you - I feel like I 'can't' go to for for anything other then 'exceptional' pay because it just. isn't. worth. it.       The thought of the stress for the amount of extra income, and how much 'extra income' we need to actually make us feel like we are bring in more money, just seems so not worth it to me.  We have DH's work pay, guard pay, and rental income coming in.


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#4 of 29 Old 07-27-2011, 08:57 AM - Thread Starter
 
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Originally Posted by CassnBeth View Post

This isn't exactly my area but my understanding is that only your income over the tax bracket cutoff will be taxed at 25%. So if the cutoff is ten dollars and you make twelve? Only two of those dollars will be taxed at 25%.

 

Is this right

You might be correct. However, I think it works like this:  dh income plus rental is about $98,000. After all possible deducitons, we have a adjusted gross of $68,000. which $0 to 17K is taxed at 10%, 17K to 69K is at 15% and 69K to 139K is at 25%. So all the income I would bring in would be taxed at 25%. 

 

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#5 of 29 Old 07-27-2011, 09:10 AM
 
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I can understand being ticked about it, but I would not let that stop me from getting a job if my family needed the extra income. If you don't need it then there is no reason to get a job unless you want one for personal enrichment reasons.

For instance, out family is MUCH more comfortable if I can bring in an extra $800 a month take home, so I have a couple of part time jobs. Yes, it stinks that my income is all taxed at the 25% rate, and I am not thrilled about making $100 less a month than I would have (that is two 5 hour shifts a month!). But I am also aware that our tax dollars are necessary to make the country run, and even if those tax dollars do not all go to areas I support it is the price I pay for living in America. C'est la vie!
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#6 of 29 Old 07-27-2011, 12:34 PM
 
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I think you should stay home and leave the hypothetical job you might get to someone who will be glad to have it, even if they have to pay taxes on the income they earn at it.

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#7 of 29 Old 07-27-2011, 01:17 PM - Thread Starter
 
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Originally Posted by kama'aina mama View Post

I think you should stay home and leave the hypothetical job you might get to someone who will be glad to have it, even if they have to pay taxes on the income they earn at it.

Geezzzz, you don't have to get all sassy about my issue. I am just trying to talk about the realities of income/taxes when trying to decide to work or not. 
 

 

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#8 of 29 Old 07-27-2011, 01:49 PM
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Is this the main reason you wouldn't work?  It's not a great reason.  Contributing to your own employment history to raise the amount of Social Security you can collect in your old age, is important.  So is keeping current in the job market - it's much harder to get a job or move up the older you get, esp. with big breaks in employment.

 

I think it's also important not to think of the man's income as the "real" family income and the woman's income as "extra."  They are both income, which can better your family's life.

 

Paying higher income taxes is a privilege of earning enough money.  It's contributing to your community.  And other taxes are the same rate no matter what your family earns - social security, unemployment insurance, Medicare, sales taxes, etc.

 

What kind of work are you looking/qualified for?

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#9 of 29 Old 07-27-2011, 02:16 PM
 
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Quote:
Originally Posted by SneakyPie View Post

Paying higher income taxes is a privilege of earning enough money.  It's contributing to your community.  And other taxes are the same rate no matter what your family earns - social security, unemployment insurance, Medicare, sales taxes, etc.


I just wanted to say I LOVE this comment so much! 

 


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#10 of 29 Old 07-27-2011, 02:35 PM
 
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Originally Posted by SneakyPie View Post

Is this the main reason you wouldn't work?  It's not a great reason.  Contributing to your own employment history to raise the amount of Social Security you can collect in your old age, is important.  So is keeping current in the job market - it's much harder to get a job or move up the older you get, esp. with big breaks in employment.

 

I think it's also important not to think of the man's income as the "real" family income and the woman's income as "extra."  They are both income, which can better your family's life.

 

Paying higher income taxes is a privilege of earning enough money.  It's contributing to your community.  And other taxes are the same rate no matter what your family earns - social security, unemployment insurance, Medicare, sales taxes, etc.

 

What kind of work are you looking/qualified for?


I agree with this post. I have a coworker who's main source of income is her DH (and they also have a rental and no kid's living at home) and this has allowed them to up her 401K percentage to the maximum. That will be great when they retire.

 

But also wanted to add that if you are of higher income you could consider voluteering with organizations in your community if you have the extra time but do not want to work. That is what a lot of higher income housewives do in my area.

 

Rhianna
 

 

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#11 of 29 Old 07-27-2011, 02:49 PM
 
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Originally Posted by jeteaa View Post



Geezzzz, you don't have to get all sassy about my issue. I am just trying to talk about the realities of income/taxes when trying to decide to work or not. 
 

 

I didn't intend to be "sassy" I am simply pointing out that with unemployment as high as it is and underemployment even higher it probably just makes sense to leave the jobs for people who don't have mixed feelings about taking them.
 

 

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#12 of 29 Old 07-27-2011, 02:53 PM
 
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I will say that I do know where your coming from

 

Im in Canada so our taxes work differently here. We also get child tax benefits and other things we call "baby bonus" based on our income. So when I work a part-time job it increases our income lowering our baby bonus/upping our taxable income. That alone sucks BUT then we factor in....1)babysitting for 2 kids 2)traveling costs 3) the inevitable convience/take-out food that seems to always happen when Im working.

 

My dh works crazy weird hours either 9-6 or 12-9 and doesnt have weekends off so any night part-time job I would have I would need a sitter which would prob cost more then I would make especially since I would prob go back to serving and the tips arent so great around here anymore


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#13 of 29 Old 07-27-2011, 04:01 PM
 
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Quote:

Originally Posted by jeteaa View Post

i am currently a sahm. both dc will be FT school age next year, so potentially I could look for a job. ONE of my reasons for not wanting to get a "normal" job is that with my dh income plus our rental house income, after all deductions, we are less than a $1,000 away from the next tax bracket of 25%. I just have this ISSUE with knowing that all the income I make will be taxed at 25%. Any thoughts on my issue?

Not only all the income you make, but all of your husband's income (not sure how rental income would work though) will also be taxed at 25% if you're married filing jointly.  The gov't doesn't designate his and hers, they only care about the total numbers, and you could potentially end up with less take-home pay than before at that point.  Your total income would likely end up over the $69K mark, and your taxable income will be treated as such.  If you're married filing separately then I bet it's different.  If you have a CPA friend, now would be the time to ask them. 
If you want/need the job to put food on the table or keep your resume current or whatnot, well, the tax rate is annoying, but it is what it is.  Or you could use your job as a way to sock away more in your 401K - put away as much as possible at your job and husband's job to lower the taxable income.  Working *just* to possibly get social security income...  I'm not going to be one to agree with that.  Social Security won't be around by the time hubby retires (I'll stay a sahm/housewife if I can, it's what I'm best at), especially with other things at play in the US right now (know why the Roman Empire fell? yeah, talk about repeating history).  Not everybody believes that though, so to each their own.


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#14 of 29 Old 07-27-2011, 05:08 PM
 
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Quote:

Quote: Not only all the income you make, but all of your husband's income (not sure how rental income would work though) will also be taxed at 25% if you're married filing jointly.  The gov't doesn't designate his and hers, they only care about the total numbers, and you could potentially end up with less take-home pay than before at that point. 

 

 

As other posters have mentioned, only the dollars earned above the tax bracket cut off are taxed at the higher rate.

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#15 of 29 Old 07-27-2011, 05:47 PM
 
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Originally Posted by caiesmommy View Post

I will say that I do know where your coming from

 

Im in Canada so our taxes work differently here. We also get child tax benefits and other things we call "baby bonus" based on our income. So when I work a part-time job it increases our income lowering our baby bonus/upping our taxable income. That alone sucks BUT then we factor in....1)babysitting for 2 kids 2)traveling costs 3) the inevitable convience/take-out food that seems to always happen when Im working.

 

My dh works crazy weird hours either 9-6 or 12-9 and doesnt have weekends off so any night part-time job I would have I would need a sitter which would prob cost more then I would make especially since I would prob go back to serving and the tips arent so great around here anymore




I agree.  Between the reduction in the child tax benefits (federal and provincial here) and other assorted tax credits, paying for child care for 4 kids, travel costs, extra taxes, and extra clothes and convenience items, it is not worth while for me to go back to work.  Unless I had a considerable salary, which is unrealistic at least starting out at this point, it would not be worth while for both of us to be working.

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#16 of 29 Old 07-27-2011, 06:30 PM
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Taxes suck.  But that's life.  I wouldn't let it stop me from getting a job, personally. 


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#17 of 29 Old 07-27-2011, 07:34 PM
 
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I agree.  Between the reduction in the child tax benefits (federal and provincial here) and other assorted tax credits, paying for child care for 4 kids, travel costs, extra taxes, and extra clothes and convenience items, it is not worth while for me to go back to work.  Unless I had a considerable salary, which is unrealistic at least starting out at this point, it would not be worth while for both of us to be working.



Indeed.  As someone shifting from the US to Canada, and experiencing this, unless I am earning a HUGE amount, it simply won't be worth it for me until the kids are much older.  In the US it's a little different- here it would be worth it to me to work for a lower salary, but even then, I can't place a financial value on the chaos it would create and the additional stress. I would be able to put some money into the budget though.  In Canada, the budget is better without my working- at least for now. 

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#18 of 29 Old 07-28-2011, 01:08 AM
 
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As I am living in Europe, I can only laugh at a your tax rates.

We pay a rate of 45%.

 

But then- of course we get more from the state in case of unemployment or such.

 

I agree with the others: Don´t let the taxes stop you from working- you contribute to your future by working.

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#19 of 29 Old 07-28-2011, 06:58 AM
 
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What kind of job would you get? What is the salary range you'd be shooting for??

I mean, I guess if you were going to be working minimum wage and will have to spend extra just to work (gas, work clothes or uniform, lunches out, after school care, etc.) then the tax rate might make it hard for you to end up really making any money at all. If you are hoping for a pretty well-paying job though, I think the overall effect would be an increase in your family's income which would make it easier for you to meet any financial goals you may have. You can google for a 'second income calculator' to start estimating how much you'd be able to really contribute.

Why are you considering working? Unfortunately DH & I don't have the luxury of choosing whether or not to work so it's admittedly a bit hard to relate to your issue. But there is no rule that you have to work just because your kids are in school full-time.

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#20 of 29 Old 07-28-2011, 07:34 AM
 
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One quote I heard yesterday on NPR that I thought of when I read this thread:

 

"I like paying taxes. With them I buy civilization."- Justice Oliver Wendall Holmes, Jr.

 

To be honest, I don't mind paying taxes. I am sometimes not thrilled about how the money is spent, but as a country we have decided to spend the money that way and my dollars go to contribute to various programs. I just tell myself that my tax dollars go to only the program that I support and like and pretend they don't go to the places that I don't ;)  In some ways I cannot relate because my husband and I both work full-time and are still SOOOOOO far from being in that higher tax bracket that it isn't even funny. I certainly won't allow higher taxes to prohibit me from making more money, though, if the opportunity came up. Somehow, with me being a midwife doing homebirths in a rural chunk of the state and my husband back in school to become an elementary teacher, I don't see it being an issue for us..... like ever.


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#21 of 29 Old 07-28-2011, 06:59 PM - Thread Starter
 
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Originally Posted by crunchy_mommy View Post

What kind of job would you get? What is the salary range you'd be shooting for??

I mean, I guess if you were going to be working minimum wage and will have to spend extra just to work (gas, work clothes or uniform, lunches out, after school care, etc.) then the tax rate might make it hard for you to end up really making any money at all. If you are hoping for a pretty well-paying job though, I think the overall effect would be an increase in your family's income which would make it easier for you to meet any financial goals you may have. You can google for a 'second income calculator' to start estimating how much you'd be able to really contribute.

Why are you considering working? Unfortunately DH & I don't have the luxury of choosing whether or not to work so it's admittedly a bit hard to relate to your issue. But there is no rule that you have to work just because your kids are in school full-time.


PT vs FT is what is really would come down to. Option 1 would be pt while dc are in school, which would most likely me a close to min wage job w/NO benefits. Option 2 look for a career like job, with FT year round hours and benefits. Option 1 financially would not be worth it with all the costs associated with just and at the 25% tax rate. Option 2 would be financially OK at 25% especially with the benefits however, both dh and I do not want that kind of family lifestyle. Now, if I could find a well paying pt job, that would work.

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#22 of 29 Old 07-28-2011, 07:23 PM
 
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I feel your pain.  I am border line dead poor.  The upside of that is good child support, free healthcare for my kids (Way better than my job supplies), and every tax credit known to man.  I have almost no taxes withheld and still get about $8000 in tax return.  Way more than I paid in.  A full third of my income. 

 

If I start making just a few more dollars a year I lose it all.  Even my child support can be reduced.  I got a small raise when I went to full time.  about $3000 a year and it knocked my child support down by that much.  Well what is the point of working harder then?  

 

I was about to go back to part time when I got a promotion.  I will still be poor but might be just over the line for government benefits.  I am not sure what to do about that.

 

You also have to consider the costs of working.  I am not able to plan and be frugal like i used to.  I have to buy specific work clothes weather they are on sale or not.  More expensive shoes.  More gas to get to work.  etc etc

 

 

The title of your thread is "one of the reasons...."  what are your other reasons?

 

 


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#23 of 29 Old 07-28-2011, 07:50 PM
 
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I'm another who wouldn't let the tax rate stop me. When I go back to work, we'll have the same issue, but it doesn't bother me for all the reasons other posters have mentioned. Maybe think about it as .25 out of each dollar rather than flat 25%. Libraries, infrastructure like roads, bridges, etc, food and enviro safety, schools, etc etc and of course, SS and Medicare. That's worth a quarter, right?

 

I personally wouldn't sneeze at the SS because don't forget, your employer matches 6%. My husband and I are big savers and big on investing but still, SS is a guaranteed pension plan that is unaffected by the whims of the market economy. No politician is going to take it away, not only because we all pay into it, but because so many elderly Americans rely on it for survival.

 

Not to be a bummer, but all this might be moot anyway. This is a way tough job market. A lot of employers won't even look at someone who is currently not employed.

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#24 of 29 Old 07-29-2011, 07:47 AM
 
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I also wonder about your other reasons for not wanting to work.

 

I understand your dilemma, I'm in a similar position.  I'm choosing to work part time.  The job just sort of fell into my lap when my youngest started school full-time.  I work 3 mornings/week.  My work enriches my life, and I really enjoy feeling like I have value to people outside of my family.  While I do make more than minimum wage, since I only work 12-14 hours/week, I don't make a ton of money.  But several hundred dollars a month does come in handy, no doubt.  A large chuck of my income goes into my Roth IRA.  And the rest mostly goes to activities for the kids.  With my income, it's not a stretch to pay for music lessons and sports for 4 children. 

 

But what I love about working part time is that although I receive some benefits from working, I still feel a little bit like a SAHM.  I'm around to take my kids to school and pick them up.  I have time to cook from scratch and entertain.  Our lifestyle hasn't been adversely affected by my employment. 

 

 

 

 


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#25 of 29 Old 07-31-2011, 10:35 AM
 
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This is very important.
 

Quote:
Originally Posted by SneakyPie View Post

Is this the main reason you wouldn't work?  It's not a great reason.  Contributing to your own employment history to raise the amount of Social Security you can collect in your old age, is important.  So is keeping current in the job market - it's much harder to get a job or move up the older you get, esp. with big breaks in employment.

 

I think it's also important not to think of the man's income as the "real" family income and the woman's income as "extra."  They are both income, which can better your family's life.

 

Paying higher income taxes is a privilege of earning enough money.  It's contributing to your community.  And other taxes are the same rate no matter what your family earns - social security, unemployment insurance, Medicare, sales taxes, etc.

 

What kind of work are you looking/qualified for?



 


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#26 of 29 Old 08-01-2011, 06:59 PM
 
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I also wonder about your other reasons for not wanting to work.

I understand your dilemma, I'm in a similar position. I'm choosing to work part time. The job just sort of fell into my lap when my youngest started school full-time. I work 3 mornings/week. My work enriches my life, and I really enjoy feeling like I have value to people outside of my family. While I do make more than minimum wage, since I only work 12-14 hours/week, I don't make a ton of money. But several hundred dollars a month does come in handy, no doubt. A large chuck of my income goes into my Roth IRA. And the rest mostly goes to activities for the kids. With my income, it's not a stretch to pay for music lessons and sports for 4 children.

But what I love about working part time is that although I receive some benefits from working, I still feel a little bit like a SAHM. I'm around to take my kids to school and pick them up. I have time to cook from scratch and entertain. Our lifestyle hasn't been adversely affected by my employment.


I agree with this. In my situation, I work part time with benefits in a professional level, rewarding position. I truly feel like I have the best of both worlds - plenty of time to participate in school activities & my kids lives, but, also nurturing myself and contributing to our finances.
Since you're not in a rush, why not hold out for the "perfect" part time position? Something that you find interesting, with adequate accommodations for your family. Good luck!
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#27 of 29 Old 08-02-2011, 02:59 PM
 
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Quote:
Originally Posted by lmonter View Post

Quote:

Not only all the income you make, but all of your husband's income (not sure how rental income would work though) will also be taxed at 25% if you're married filing jointly.  The gov't doesn't designate his and hers, they only care about the total numbers, and you could potentially end up with less take-home pay than before at that point.  Your total income would likely end up over the $69K mark, and your taxable income will be treated as such.  If you're married filing separately then I bet it's different.  If you have a CPA friend, now would be the time to ask them.


No, no, no, no, no.  This is absolutely wrong.  The OP was correct when she said:

 

"dh income plus rental is about $98,000. After all possible deducitons, we have a adjusted gross of $68,000. which $0 to 17K is taxed at 10%, 17K to 69K is at 15% and 69K to 139K is at 25%. So all the income I would bring in would be taxed at 25%."

 

I'm not positive that she has the tax brackets 100% correct, but the principle of what she is saying is correct.  ETA:  Yes, those are the correct rates for marginal tax brackets.

 

I also agree with Ann about part-time work.  I work only a max of 15 hrs./week at a very fulfilling job that will look *great* on my resume when I finally go back to work full time in 9 years.  Does the money matter... not a lick.  We have no rental income, but dh earns a great salary and we live in just about the lowest COL area in the country.  I don't *need* to work.  The money goes only toward savings and my cash stash and I feel blessed that this is so, as I know so many do struggle.  But I know I will have to go back to work full-time because dh will turn 65 many years before I will and I will need health insurance and benefits, as I'll still be in my 50's.  I can't just have an 18 year gap in my resume (I was a professional, a systems analyst/programmer for 13 years).  I'm also really good at what I do and I enjoy the work immensely.  Plus, with an only child, I know I will have some very, very serious empty nest syndrome that will require me emotionally to find something full-time pretty quickly after dd leaves for college.

 

So, don't think of this part-time job as something to fill your short-term goals, but how it will help fulfill your long-term goals.  Your children will be in school for over a decade... what will you do when they leave home?  I can't even relate to why the taxes would bother you.  Pay what you owe and, as mentioned previously, be proud that you contributing to the economic welfare of the country as a whole.

 

Good luck with your decision, OP!  I hope you find something you enjoy doing.

 

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#28 of 29 Old 08-03-2011, 06:44 PM
 
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25% isn't a high tax rate. It pretty darn low especially since your income is high. Who cares that you will be taxed differently. It doesn't sound like you will struggle because of it. Most people in developed countries pay a lot more in taxes than that. Though out our working career dh and I will move into different tax brackets. I actually would love to be in a higher tax bracket where I can contribute more. I wouldn't not take a job when the time comes over a tax bracket and there are things I don't like my taxes to go to. There is a reason for taxes and I am happy to be contributing.

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#29 of 29 Old 08-03-2011, 11:36 PM
 
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Quote:
Originally Posted by jeteaa View Post



You might be correct. However, I think it works like this:  dh income plus rental is about $98,000. After all possible deducitons, we have a adjusted gross of $68,000. which $0 to 17K is taxed at 10%, 17K to 69K is at 15% and 69K to 139K is at 25%. So all the income I would bring in would be taxed at 25%. 

 


that seems like a good income to me.  what is the problem??

 


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