New 401k contribution caps?

Discussion in 'Politics' started by Northern Flash, Oct 23, 2017.

  1. Northern Flash

    Northern Flash Piss on our Flag, get a boycott against you.

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    I know that, and I understand that. They take the 20% to be sure that the withdrawer pays the taxes on that income up front. I get that.
    But you said earlier that you paid 20% tax on that withdrawal, initially you did, but that's not the final tax percentage that you will pay at the end of the year. As I said earlier, your taxes at the end of the year is based on your total income for the year, and this 20% tax will be calculated into your final tax percentage, but that is not your final percentage that you will be paying. With you still working also, combined with your 401k withdrawals, you will be paying much higher than 20%, I would bet.

    It's hard explaining this crap in writing, while trying to keep it short enough to not muddy the waters.
    :regretful:
     
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  2. jimmy g

    jimmy g Kook

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    Here, Flash.

    You work for XYZ. You draw a paycheck. They withhold 20%, minus however many deductions you have on a W4.

    Taking from a 401k, there are no W4s, so all 20% is withheld. At ALL Ages.

    At the end of the year filing, taxes are figured. So retirees probably pay less in the long run, BUT the 20% is withheld by Fidelity, paid to the IRS by Fidelity, and the Retiree has to wait until he files end of the year to get a refund for overpayment.

    So even tho a retiree has 5 trillion in his 401k, if he wants $1000 @ week, he'll have to withdrawals $1200 @ week...
     
  3. Northern Flash

    Northern Flash Piss on our Flag, get a boycott against you.

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    Yep.
    Plus the 10% penalty if your are UNDER 59 1/2 at time of withdrawal.(Unless you qualify for financial emergency exemption.)
    :1036316054:
     
  4. ABFer

    ABFer Super Moderator Staff Member

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    That is what I've been saying. It's not a tax windfall for the gubment, in fact it's a loss of tax revenue in the long run for a money grab up front.
     
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  5. canaryinthemine

    canaryinthemine Retirement....The Job I Was Born To Have!

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    Now they are also talking about removing the mortgage deduction. They did talk about removal of the local and state tax , but there's supposedly opposition against that.

    Sure would be nice if all the negotiations weren't done in secret,.....and in a hurry. Tax reform is very complicated,..and as we all see here, they will somehow try to re-coup the loss of tax revenue with a rash of extra costs for the taxpayers.
     
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  6. ABFer

    ABFer Super Moderator Staff Member

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    Outright tax cutting is out of the question, regardless of whether it's income tax, school tax or one of the other taxes we pay. All it will ever be is a shifting of the burden and usually we will all still carry that burden under new laws. However, ending local school tax and replacing it with an income tax would benefit me.
     
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  7. canaryinthemine

    canaryinthemine Retirement....The Job I Was Born To Have!

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    No,....they are talking about ending the DEDUCTION on your taxes for the state and local income tax. As I've said before,....they're trying to raise revenue to cover the costs of lowering the income tax for wealthy people.

    At the end of the day,....the government will reap the same revenue. Some people will pay less......some people will pay more, in subtle ways.

    We have to look critically at the provisions of the proposal. It does not do the TAXPAYER any good to negotiate in secret, and then rush the bill to get voted on quickly. Something will slip through the cracks,....and I fear regular workers will get burned after the fact.
     
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  8. jimmy g

    jimmy g Kook

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    End taxing income!!!!!!!

    Go Fair Tax!

    End Baseline Budgeting. (Same last year's budget plus 7%.)

    Go Zero Base Budgeting.

    Problem solved!
     
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  9. ABFer

    ABFer Super Moderator Staff Member

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    Ooooo I fully understood that part of your post even though that part is news to me. I would be surprised if that one got snuck in there and would expect an economic crash to go with it.
     
  10. Northern Flash

    Northern Flash Piss on our Flag, get a boycott against you.

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    What we are seeing is typical of govt.
    They tell you how they are going to help you, but when it all shakes out they screwed you. And they think we are too stupid to see what they did.

    What good is a income tax break if they screw you out of a mortgage deduction, 401k investment option, added gas tax etc.etc.

    Govt sucks.
     
  11. Northern Flash

    Northern Flash Piss on our Flag, get a boycott against you.

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    Gotta pass the bill to find out what's in it.
    Sound familiar?
     
  12. AzPilot

    AzPilot Well-Known Member

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    Ok Nancy.
     
  13. Rastus

    Rastus ......Deplorable.....

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    Rastus Financial says:
    1. Pay off credit card debt
    2. Pay off mortgage
    3. Save for emergency
    4. Then worry about investing

    (Unless your employer matches, then invest up to the match)
     
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  14. SuperCourse

    SuperCourse Knuckledragger In A 1988 Dodge W 150

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    Can we put this fake news based thread to bed?
     
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  15. CCXdriver

    CCXdriver Well-Known Member

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    It was to bed...until you woke it.
     
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  16. Northern Flash

    Northern Flash Piss on our Flag, get a boycott against you.

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    It wasn't fake news because even the Trump people were talking about it.
    They bailed on this 401k proposal because they caught hell over the thought.
    That was the entire intent of the thread.
    :1036316054:
     

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