Government

Ignorant Americans can say whatever they want and no attempt to fact check by press😰

Except for the first six words, virtually nothing in this letter to the editor is accurate and yet it was printed anyway. Allowing opinion of any kind is warranted, your entitled to your own opinion, but not you own facts.

This is why problems can’t be solved, because we tolerate and then perpetuate misinformation.

The 2 percent Social Security inflation increase was reported by the media who forgot to mention a 3.61 percent Medicare tax increase.

Approximately 29 percent of the 2 percent increase was in fact a tax increase.

As 2017 has ended, we can look ahead to tax time when we must enter Social Security income on line 20A and taxable amount on line 20B. Interestingly we will be adding the Medicare tax, deducted from our income, as income. A tax on a tax!

Those we send to Washington are tax hungry so long as it is not a tax on themselves. Remember they are not subject to Social Security, having their private plan as well as their private health plan.

Patricia Mead, Pendleton

http://www.heraldbulletin.com/opinion/letters_to_the_editor/letter-medicare-increase-is-tax-on-a-tax/article_14171710-2436-5582-a9fe-fdc92462faa7.html

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2 replies »

  1. I suspect people’s understanding of their income tax will become worse. When I first started working decades ago, I filed using papers forms. I read every part of the instructions to understand each line. This allowed me to make informed decisions the following year regarding taxes such as which records to keep, what qualified for deductions, or the available tax credits. I used an accountant once and he lied better than me only just enough to cover his fee. For about the last 15 years I have used tax software, mostly because it has all the forms available and electronic filing.

    The tax software asks the questions that it thinks it needs to ask just like and accountant. The problem is if the questions are not asked in the correct way as your own understand of the topic, you could answer the question wrong. An accountant can rephrase the question. Last year I had a form that I did not know what to do with it. I had to call the software company and ask how to input the information since I was not asked for it.

    I retired in 2017 and I was trying to understand my future tax liability as to what is taxable and what is not as far as my pension income. I had to go out of my way to read the worksheets and forms in the software just to understand how to avoid making big mistakes withdrawing my money. I believe with the tax changes that I will basically filing a 1040EZ form since almost nothing is deductible for me but who knows. Nobody really knows the 2018 details well enough yet to give advice since they are still working on processing 2017 returns.

    I am betting that most people only know what their tax program summary says if they bother to read it. I am sure most people do not understand the deductions on the paystub or W-2 either. These same people are the ones who are shocked about taxes.

    As far as those who we send to Washington being tax hungry, it is us who wants the government to fund everything without cutting our own entitlements. We are the ones that are hungry for more entitlements.

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  2. Can’t tell for sure but wonder if she is complaining about the increase in Medicare Part B premium.
    The blocks on the 1040 she identifies are those that confirm the total Social Security benefit and the portion that is taxable.

    Perhaps only 1 in 1,000 can clearly explain those two provisions:
    (1) How Medicare Part B premiums change when the Medicare increase was delayed due to the “hold harmless protection” provisions where there is no/minimal COLA, and
    (2) How the taxable portion of Social Security benefits is determined – where did the thresholds come from and the 85% inclusion rate.

    First, the hold harmless rule – your Social Security benefit won’t be reduced by increases in Medicare Part B premium so long as:

    – You are entitled to Social Security benefits for November and December of the current year (2017);
    – The Part B premium will be or was deducted from your Social Security benefits in November 2017 through January 2018;
    – You don’t already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility;
    – And, you do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium. COLA is a change in the dollar amount of Social Security benefits to protect against inflation decreasing the benefit’s purchasing power. The COLA in 2018 will be 2% of your Social Security benefit.

    Second, income taxes on social security benefits might appear to be a tax on a tax – do you really think of your social security taxes, that thing called FICA on your paycheck (twice, when you include the employer-paid portion) as a “contribution”. The pay advice kind of puts it in the same column as income taxes, reports it on the W-2, etc. For comparison, think about other forms of withholding – like FITW. If you have too much withheld, the refund of the taxes you paid is not treated as income. Here, if you are a single filer, and your AGI plus tax exempt interest plus 50% of your Social Security benefit exceeds $25,000 (not indexed since implemented as part of the Social Security Amendments Act of 1983 – 35 years ago!), up to 50% of your benefits would be treated as taxable income. Or, if you are a single filer, and your AGI plus tax exempt interest plus 50% of your Social Security benefit exceeds $34,000, 85% of your benefits would be treated as taxable income. Revenue raised does go to fund Medicare Part A.

    Read both items a second time. Is anyone really surprised that only a small number know how this all works? Show me the congressman, senator, or president who truly understands this material and can explain it to us, or calculate it without assistance.

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