Comment on Social Security can be saved. Scrap the cap!
Rivalarrival@lemmy.today 2 days agoReading your arguments, you’re claiming that if I earn $184,499, I owe $22,000 in social security tax, because I don’t put a zero on line 9 of page 9 of the self employment tax deduction worksheet.
But if I earn $184,501, the IRS is going to give me a $22,000 refund for exceeding the social security wage cap.
By your argument, if I’m actually making about $120,000, I should just claim to have earned $184,500. After paying taxes on the missing $64,500, I’d still come out ahead.
musicalphysics@discuss.online 1 day ago
It’s isn’t an argument, it is the tax code.
Rivalarrival@lemmy.today 1 day ago
Show me a financial advisor making the same point I just made. If the tax code says I can get a $22,000 refund simply by claiming to have earned $184,500 instead of a lower number, every financial advisor in the country will have done the math on what I just estimated. There should be a range of income that a taxpayer should never claim.
If what you are saying is true, either do the math yourself, or find the financial advisor who has done the math, and tell me the break even point. The exact point where the additional taxes I pay (by falsely claiming greater income) will equal the ~$22,000 of social security tax you think the government will refund me.
If this were actually true, it would be the largest tax loophole accessible to the middle class. This supposed loophole approaches the value of a small car, each and every year.
Do me a favor: run that worksheet on $174,500 income, $184,500 income, and $194,500 income. Show me that the final self employment tax deduction for each of those three scenarios supports your argument.