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South Central Iowa | Yep! That's the same way I learned it as well... by accident a few years ago. That's a big part of my tax issue, I'm going to show the max on Payroll Taxes without showing any net income, so I might as well take advantage of the lower tax brackets and keep some more in this year instead of pushing it forward where I am going to have a max again, but with a greater portion in the higher bracketing.... Taxes are a deal...
You add in the non-deductibility of principal payments on land, which NO ONE who buys a farm ever accounts for when purchasing, and it is a vicious cycle. You don't even have to actually have the money, yet you have the tax liability. So you need to make more to meet those obligations. Then when you make more, you have a greater percentage in those upper brackets, so you need to make more to cover that liability. But as you make more, you need to make even more to pay the obligations on the more. A person gets to a point where he has to about double his debt service obligation to pay the interest, amortization, and taxes if he wants any free cash available afterward. | |
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Huge bearish wedge is forming
