So WTF is W-2 Wage and Tax Statement

[E20]

I got this shit in the mail fro my old employer. I dont' know much about taxes and shit cause I dont' do them, because I'm unemployed right now, but is this shit some sort of bill I have to pay or something? There are three numbers:
Federal income tax withheld: 338.88
Social security tax withheld: 308.59
Wages tips and other compenstaion: 4977.25

So WTF does this all mean?

[SrA Husker]

It means do your damn taxes. You can use Turbo Tax Freedom edition since you didn't make much money, and will probably be able to get all that federal income tax withheld back.

[CuckingFunt]

The part that says "Federal Income Tax Withheld" is the amount of federal income tax withheld.

The part that says "Social Security Tax Withheld" is the amount of social security tax withheld.

The part that says "Wages, Tips and Other Compensation" is the total of your wages, tips, and other compensation.

I don't know why the government insists on being so confusing. It's like it's written in code, or something.

[E20]

The part that says "Federal Income Tax Withheld" is the amount of federal income tax withheld.

The part that says "Social Security Tax Withheld" is the amount of social security tax withheld.

The part that says "Wages, Tips and Other Compensation" is the total of your wages, tips, and other compensation.

I don't know why the government insists on being so confusing. It's like it's written in code, or something.
So what do I have to pay?


BTW....fail at being a smartass. FAILLLLLLLLL
If this isn't serious can I jsut throw this shit away?

[spursfan09]

The part that says "Federal Income Tax Withheld" is the amount of federal income tax withheld.

The part that says "Social Security Tax Withheld" is the amount of social security tax withheld.

The part that says "Wages, Tips and Other Compensation" is the total of your wages, tips, and other compensation.

I don't know why the government insists on being so confusing. It's like it's written in code, or something.

:lol

[spursfan09]

So what do I have to pay?





You have to go do your taxes. You own't know if you have to pay or if you'll get something back. And yeah its something you should NOT throw away.

[SrA Husker]

So what do I have to pay?


BTW....fail at being a smartass. FAILLLLLLLLL
If this isn't serious can I jsut throw this shit away?

You can throw it away, but it's like throwing away a $340 check. Do your taxes online, and you can get the "federal withheld" back - if that's your only income from the year, you get all that back because you're a poor mofo.

[Fillmoe]

lol, you're a fucking idiot

[E20]

Thanks for the great feedback guys, real great. :tu

[/sarcasm]

[CuckingFunt]

If you're not still claimed by your parents and will be filing taxes for 2007, you'll need to use the W2 when you file. The different amounts listed on the W2 have to be plugged into the tax form to determine whether or not you get a refund.

[spursfan09]

Dude tell your mom and dad you threw that away and see what kind of reaction they give you.

[SrA Husker]

Thanks for the great feedback guys, real great. :tu

[/sarcasm]

Dude, did you see any of my f'ing posts? I'm helping you out here!

[spursfan09]

Thanks for the great feedback guys, real great. :tu

[/sarcasm]

What more do you want? Once people get those its automatic. do your taxes. Not trying to be a smartass, thats just what you have do.

[Kori Ellis]

E20 -

All your employers will send you a W-2 or a 1099 that shows how much money (and taxes) you paid for the year. They also send copies to the government, so that they know too.

You need to take these forms and use them to fill out your tax return and file your taxes by April 15th. If you don't know how to file your taxes yourself (get info at irs.gov), ask your parents to help you, or consult a service like http://www.hrblock.com.

--Kori

[CubanMustGo]

http://ecx.images-amazon.com/images/I/51dYsmg9ZSL._BO2,204,203,200_PIsitb-dp-500-arrow,TopRight,45,-64_OU01_AA240_SH20_.jpg

[Fillmoe]

Thanks for the great feedback guys, real great. :tu

[/sarcasm]


lol, i know 10 years olds that know what a w2 is...

[I.R.S.]

www.irs.gov will give you all the answers you need to know and some you didn't even know you were supposed to ask.

[E20]

lol, i know 10 years olds that know what a w2 is...
Well yeah Indians are some of the cheapest and money hungry mother fuckers I know and their parents teach them how to scam the govt and get money from a very young age. Doesn't suprise me.

[Fillmoe]

lol... you couldn't be more wrong.....

back to watching rocky reruns on tnt you go!

[E20]

lol... you couldn't be more wrong.....

back to watching rocky reruns on tnt you go!
Back to imitating low life rappers on how you should live you go!

[ShoogarBear]

So WTF does this all mean?It means another year of cheap dates for you.

[Extra Stout]

Thanks for the great feedback guys, real great. :tu

[/sarcasm]
If you didn't get a 1040-EZ form in the mail, you can go to the post office and pick one up.

Better yet, visit irs.gov and file your taxes under FreeFile.

Or, do nothing. If there are 1 million apathetic twits who don't put forth the effort to file a return and get their money back, even at as little as $338 each, that's a decent chunk of money that doesn't go into the national debt.

[E20]

Or, do nothing. If there are 1 million apathetic twits who don't put forth the effort to file a return and get their money back, even at as little as $338 each, that's a decent chunk of money that doesn't go into the national debt.
That's the route I'm leaning too so far. If they just want to give me some money back, then that's cool, but this seems a lot of work to do for a little amount of money. As long as I don't have to pay anything.

[Ed Helicopter Jones]

E20, throw that away and you're throwing away $339.


I guess if you're rollin' in the dough $339 is nothing. What's a bottle of Cristal going for these days...three bills or so?

Get your refund, order a bottle at the club and you'll still have a little to tip your waitress. :tu

[bendmz]

take the shit to the building that reads "BORDER PATROL"
they just might deport your ass.........

[PM5K]

Is this a fucking serious thread?

[E20]

Is this a fucking serious thread?
Yeah, I know WTF taxes are, but have never done them before mainly because I'm only 19 and my Mother has claimed me and I've never gotten anything tax related in the mail for 19 years, so I don't bother myself with things I don't need to know presently, I'm now getting this shit and now I need to know WTF this is and so far it's the the govt. wanting to give me back 340.00 to fill out a long ass form and I have other shit to do, my spring semester is so brutal that I can't even get a job because of it and I don't have the time to do anything but really study. And money isn't really a problem for me.

[Extra Stout]

A FreeFile probably takes about 15 minutes.

So we've established that E20 will not be willing to work for less than $1,350 an hour.

[Extra Stout]

I can't remember whether I was that stupid when I was 19.

[E20]

Maybe you can't read/understand me Extra Stout, but I don't need the money. I'll probably give it to my mother so she can use it or maybe I'll give it to charity.


P.S
Your dry humor/sarcasm really sucks BTW.

[ehz33satx]

You have to go do your taxes. You own't know if you have to pay or if you'll get something back. And yeah its something you should NOT throw away.

Nah, Nah! You've never done your taxes before, why start now? Throw it away! Dumb :donkey

[ShoogarBear]

Long-ass?

Your 1040EZ will take about 10 minutes to fill out, tops.

Send it to me and I will fill it out and split the refund with you.

$170/10 minutes = $2 million/year. Not bad.

[ShoogarBear]

Dammit, ES. I actually had my post written 30 minutes ago, and then got a phone call. :madrun

[Shelly]

I say be like Wesley Snipes and don't file. Fight the man!

You're in CA, right? You have to file with the state too.

[Beno Udrih]

Long-ass?

Your 1040EZ will take about 10 minutes to fill out, tops.

Send it to me and I will fill it out and split the refund with you.

$170/10 minutes = $2 million/year. Not bad.
:lol Yeah taxes especially that small don't take long to file.

[ploto]

Actually you might want to check what you are filling out when you go to work (W-4) because you probably should not have any federal income taxes taken out in the first place.

[easjer]

I can't believe that someone would seriously not take the 10 minutes it would take to fill out the e-file and get $300 for their effort.

Seriously, you have SO MUCH MONEY that you can't be bothered to do the easiest taxes you'll ever have?

I'm completely floored by this concept.

[E20]

I can't believe that someone would seriously not take the 10 minutes it would take to fill out the e-file and get $300 for their effort.

Seriously, you have SO MUCH MONEY that you can't be bothered to do the easiest taxes you'll ever have?

I'm completely floored by this concept.
Yeah I'm filling out the form and giving the proceeds to charity, I don't need that money right now. Maybe when I get a job and when filing taxes becomes a serious priority I will take it seriously.

[easjer]

Yeah I'm filling out the form and giving the proceeds to charity, I don't need that money right now. Maybe when I get a job and when filing taxes becomes a serious priority I will take it seriously.


Well good for you for a) learning how to do your taxes and b) donating the money.

[mrsmaalox]

Aren't you the one asking for help with some long-ass convoluted math problem with some imaginary as close as you can get answer that will never apply to anything you'll ever do for the rest of your life? That EZ form you can do in your sleep! It actually has the "formula" already on there and all you do is plug in the numbers and voila--no sliderule needed!

[E20]

Yeah so I decided a long time ago in this thread that I will file it get back the crummy 340 dollars and either give it to my mother or charity or wipe my ass with it. No need for anybody else to tell me to file it.

[marini martini]

File It!!!!!!!!!!!!!!!!!!!!

You want it on your SSI record, so when you hit 62, you can recieve a check in the mail for all the years you paid into it :lol :toast :lol

[LuvBones]

hell give that money to me if you don't want it! :rolleyes:

[Shelly]

There's no guarantee that you'll get $300 something back. You wont know until you do your taxes.

And like I said, since you live in California, you have to file with the state. Your W-2 will show state income tax withheld as well as CA SDI. (state disability insurance)

If you don't file, it will eventually catch up to you. Every time you get a job, your employer has to let the state know that you've been hired and from there they will garnish your wages if you owe any back taxes, child support, AND vehicle registration.

[Wild Cobra]

I took a quick look at form IRS form 1040EZ (http://www.irs.gov/pub/irs-pdf/f1040ez.pdf?portlet=3). As long as other income like savings interest, etc. added to your wages is no more than $5350, you'll get the entire $339 back from the federal governemt. This is assuming your parents claim you. If you claim yourself, your income can be $8750 before to start paying taxes. 10% of anything over the $5350/$8750. Social Security, you will not get back.

http://i181.photobucket.com/albums/x262/Wild_Cobra/E20-1040.jpg

[PixelPusher]

Social Security, you will not get back.
...and possibly not even after you retire.

[spursfan09]

Yeah, I know WTF taxes are, but have never done them before mainly because I'm only 19 and my Mother has claimed me and I've never gotten anything tax related in the mail for 19 years, so I don't bother myself with things I don't need to know presently, I'm now getting this shit and now I need to know WTF this is and so far it's the the govt. wanting to give me back 340.00 to fill out a long ass form and I have other shit to do, my spring semester is so brutal that I can't even get a job because of it and I don't have the time to do anything but really study. And money isn't really a problem for me.


Also you never know if you have to pay anything. what if you owe and you never file. Years from now you could be audited. I mean like the safe mature thing to do is file. Whats the big deal. You can learn how to do it yourself or you can take it somewhere and get it done. I don't see why you wouldn't want to file. I'm working and I have a brutal spring semester and I'm gonna file.

[spursfan09]

Oh and I think you are acting pretty defensive, so don't feel stupid. Last year I filed and I owed 3 dollars. I thought my dad was going to take care of that for me, but he didn't and I never paid until later the year. Let's see if that doens't come back to haunt me later.

[ShoogarBear]

I took a quick look at form IRS form 1040EZ (http://www.irs.gov/pub/irs-pdf/f1040ez.pdf?portlet=3). As long as other income like savings interest, etc. added to your wages is no more than $5350, you'll get the entire $339 back from the federal governemt. This is assuming your parents claim you. If you claim yourself, your income can be $8750 before to start paying taxes. 10% of anything over the $5350/$8750. Social Security, you will not get back.

http://i181.photobucket.com/albums/x262/Wild_Cobra/E20-1040.jpgYou just robbed me of $170! :madrun

[AlamoSpursFan]

The ASF Foundation is currently accepting donations for its' Widows and Orphans Beer and Blu-Ray Fund.

Just sayin'...

[DarkReign]

Oh and I think you are acting pretty defensive, so don't feel stupid. Last year I filed and I owed 3 dollars. I thought my dad was going to take care of that for me, but he didn't and I never paid until later the year. Let's see if that doens't come back to haunt me later.

It wont, they'll just subtract from this year's return.

If you owe this year, then the same happens.

Some people that know the next year of earnings is going to exceed the tax threshold of return will rollover this years return to the next.

They do this to anticipate a tax payment.

Youre just the opposite.

[Barbarian]

Since the income was so low,( and I'm assuming that there aren't any other w-2's in the mail) you qualify for EIC. If i'm not mistaken, I believe it's an extra $300 added to what you would already be getting.

[Wild Cobra]

Since the income was so low,( and I'm assuming that there aren't any other w-2's in the mail) you qualify for EIC. If i'm not mistaken, I believe it's an extra $300 added to what you would already be getting.
It doesn't work that way when being a dependant of someone else.

[RuffnReadyOzStyle]

That's the route I'm leaning too so far. If they just want to give me some money back, then that's cool, but this seems a lot of work to do for a little amount of money. As long as I don't have to pay anything.

I thought you were the booksmartest of all of us. :dramaquee

Seriously, you are going to have to do taxes for the rest of your life, so you may as well start now. It'll take you 1 hour, 2 at the most.

2 hours/$339 = $170/hr. Sounds worthwhile.

Why doesn't he get his social security payments back too if he's a low income earner, or are they superannuation contributions?

PS That 1-2 hours was based on our tax forms. They are a lot longer than one page like the W-2! :lol

[Kori Ellis]

Why doesn't he get his social security payments back too if he's a low income earner, or are they superannuation contributions?

You never get SS back.

[RuffnReadyOzStyle]

You never get SS back.

I guess I don't understand what "social security" is in the US sense - here you make one tax payment that goes into consolidated revenue and is used by the govt for everything from hospitals, education and defence to soc sec payments.

On top of that there is compulsory superannuation (equivalent to your 401ks I guess), and medicare levy (sliding scale up to 6% - used to force people on middle and high incomes to get private health insurance).

[Kori Ellis]

Social Security tax is mandatory and taken out of everyone's check. Currently I believe it's 6.2%.

The concept is that you get it back in the form of monthly SS payments when you retire after age 65. However, most people believe that SS as we know it will be gone by the time we (people my age) get to retirement age. Therefore, many people believe we are paying it for nothing.

[RuffnReadyOzStyle]

Social Security tax is mandatory and taken out of everyone's check. Currently I believe it's 6.2%.

The concept is that you get it back in the form of monthly SS payments when you retire after age 65. However, most people believe that SS as we know it will be gone by the time we (people my age) get to retirement age. Therefore, many people believe we are paying it for nothing.

Gotcha, basically it's payment towards a pension. And you're right, in all probability it won't be there. Thanks for the explanation! :)

Australia brought in a new system of compulsory superannuation in the early 1990s, funded half by your employer and half by the government, with allowance for individual workers to add extra payments voluntarily tax free. All of these funds have to go into approved superannuation funds and cannot be taken out until age 60. The government did this to avoid the problem of unfunded pensions, but there was still a $60bil gap in the books, so they sold off public assets (Telstra, the govt telco, specifically) to fund those future pensions.

[Shelly]

Ruff--

Social Security is 6.2% and you stop paying it once you hit $102,000 in wages.

They also take out 1.45% for Medicare which never caps out.

In CA, the state also takes out .8% for disability and caps out at $86,698 in wages.

This is on top of Federal income tax and State income tax (if the state you live in has it...TX doesn't).

These are 2008 figures.

The Employer has to pay into Unemployment funds (these aren't deducted from employees wages). The employer has to to pay .8% to the federal government in FUI up to $7000 per employee. For state UI, the rates vary depending on the company, but in CA the employer pays up to $7000 per employee and in TX, they pay up to $9000 per employee. Since the employer pays these funds, this is how you get money if you have to go on Unemployment. I currently do payroll for CA and TX, but have done them also for AZ, UT and AL, and each state has different rates.

There are other things companies can pay into and deduct from your wages, but these are the only things I'm required to deduct and pay. Then every week, I have to take the taxes I deduct from paychecks and pay those to the Feds and State (CA) and if I'm late, I get a nice little penalty with interest.

Hope this helps!

[BacktoBasics]

Yeah, I know WTF taxes are, but have never done them before mainly because I'm only 19 and my Mother has claimed me and I've never gotten anything tax related in the mail for 19 years, so I don't bother myself with things I don't need to know presently, I'm now getting this shit and now I need to know WTF this is and so far it's the the govt. wanting to give me back 340.00 to fill out a long ass form and I have other shit to do, my spring semester is so brutal that I can't even get a job because of it and I don't have the time to do anything but really study. And money isn't really a problem for me.
And thats where the latest generations fall short in the big picture. Instead of taking a few minutes to learn about something or educate yourself on real world things that can directly affect your life most teen or 20 somethings would rather ignore it until its screaming down your back for attention.

I suppose most of you are waiting not to complete the form but for the little trophy that comes with it.....everyone gets a trophy right, its only fair.

[E20]

And thats where the latest generations fall short in the big picture. Instead of taking a few minutes to learn about something or educate yourself on real world things that can directly affect your life most teen or 20 somethings would rather ignore it until its screaming down your back for attention.

I suppose most of you are waiting not to complete the form but for the little trophy that comes with it.....everyone gets a trophy right, its only fair.
I think there is a dick sizing contest somewhere on the internets, shouldn't you be there? I'm sure you'll get a trophy for it.

[BacktoBasics]

I think there is a dick sizing contest somewhere on the internets, shouldn't you be there? I'm sure you'll get a trophy for it.So you took what I said personally instead of looking at my statement as a generalization of my observations of your generation as a whole? Makes sense.

[Extra Stout]

Gotcha, basically it's payment towards a pension. And you're right, in all probability it won't be there. Thanks for the explanation! :)

Australia brought in a new system of compulsory superannuation in the early 1990s, funded half by your employer and half by the government, with allowance for individual workers to add extra payments voluntarily tax free. All of these funds have to go into approved superannuation funds and cannot be taken out until age 60. The government did this to avoid the problem of unfunded pensions, but there was still a $60bil gap in the books, so they sold off public assets (Telstra, the govt telco, specifically) to fund those future pensions.
The funding gap in the United States for our limited pension and socialized medicine program for seniors is $50 trillion over the next 30 years. Yes, you read that number correctly.

[J.T.]

E20, I've been doing my taxes for years and since you are in college like me, I'm sure that you don't make enough in wages to file on a different form than the 1040EZ. I has "EZ" at the end for a reason, it takes no time at all to fill out, you can do it while you're on the crapper for christ's sake. Pretty much what happens is, you make money, the government taxes you, and then they give you part of that tax money back each year. Last year I got a $400 check, this year it's a little bit lower since I didn't work during the summer months.

It might seem like a waste of time to you, but if you don't file that form, you're throwing away $339 of your own money when you think about it. You might think you don't need the money, but why not just file it and put the money in a savings account or something? You never know when you might need some extra cash or something.]

It also doesn't hurt to familiarize yourself with the tax filing process since it becomes longer and more difficult once you have real income and assets like a house. I even think there are some places you can take your W2 to and they'll give you the money today, so you don't have to wait, but they'll probably charge a small fee like $20.

[Shelly]

Um..don't you HAVE to file regardless? I know some people will argue that you don't.

The Government and state knows you got a W-2 and/or 1099. As I previously stated, every employer HAS to report new employees as well as Independent Contractors. It will eventually catch up to you if you don't file. Trust me, I get garnishments all the time for back taxes or child support.

[Mijo]

Didn't you say you are a pre med? How in the hell can you not know what a tax statement is?

[ancestron]

Just take your shit to the building with the sign that says "H & R Block" Walk up to the lady at the desk and say "i need to get my taxes done."
You might have to answer a couple basic questions, but they'll do all the work and they'll just take what you owe them out of your refund. Thats the hella-lazy way to do it, but it is nice getting a $300-$400 check a month or 2 later for basically doing nothing.
By the time you get the return, you'll be like "oh yeah! my tax return!"
trust me.
there is no point in throwing money away.

[Ed Helicopter Jones]

Um..don't you HAVE to file regardless? I know some people will argue that you don't.

The Government and state knows you got a W-2 and/or 1099. As I previously stated, every employer HAS to report new employees as well as Independent Contractors. It will eventually catch up to you if you don't file. Trust me, I get garnishments all the time for back taxes or child support.


If the IRS owes you a refund, or you owe no taxes, you are not required to file.

That's why so many old fossils living on social security and some bank interest don't have to file returns.

[Shelly]

If the IRS owes you a refund, or you owe no taxes, you are not required to file.

That's why so many old fossils living on social security and some bank interest don't have to file returns.

I didn't know that.

But how do they know if you owe no taxes or are getting a refund if you don't file?

[spursfan09]

But how do they know if you owe no taxes or are getting a refund if you don't file?

Good question. Thats what I was wondering. Because right now I am a college student who works party time. I have owed the last 2 years, but my dad is telling me I might get something back this time. Oh and incase you are wondering my dad claims me and he gets a nice return, becasue he helps for college expenses. Otherwise I'd be getting the money in my tax return since I'm the one who actually lives it.

[CubanMustGo]

The IRS has the majority of your stuff on file unless you get a lot of your income via cash/checks. They certainly know how much tax you paid via withholding. If you worked a job where you get a W-2 then they have your earnings too. They can use what they have on file to calculate an estimated tax due given your earnings and investment income and if they think you owe money (and you don't file) you will eventually get a bill with penalties and interest. But if they think they owe you, you won't hear jack unless you file ...

[TDMVPDPOY]

yeh and when the IRS owes you money or a damn refund, or miscaculation; funny how they caculate the interest owing on it....LAME

AND for ppl or taxpayers like you who dont know shit about the system, when you tried to avoid ur obligations, they will have a easy time chasing you instead of going after large corporate organizations who avoid taxes, due to the lack of power/resources of the governing body IRS. This applies to nearly every government tax governing department.

if you work and paid tax, or employer deducting it out of your payments, when you recieve your annual income slip that shows the record how much you earn for the year and amount of tax paid.....add it all up to get ur gross income for the year, then the tax paid during the year is deducted out at the end when caculating the amount of tax paid per dollar, then you have them rebates which should decrease ur tax payable amount.

[E20]

Thanks to everybody for the responses, appreaciate it. (I mean it).

I have one question, once you file your taxes, what is the expected wait time? Because I see that there is a direct deposit option available.

[CubanMustGo]

Thanks to everybody for the responses, appreaciate it. (I mean it).

I have one question, once you file your taxes, what is the expected wait time? Because I see that there is a direct deposit option available.

The earlier you file the better.

E-file w/direct deposit generally gets you your money back in 2-3 weeks.

Paper returns, 2-3x as long.

[cherylsteele]

Thanks to everybody for the responses, appreaciate it. (I mean it).

I have one question, once you file your taxes, what is the expected wait time? Because I see that there is a direct deposit option available.
I just filed with turbo tax...they tell me 9-12 days with my direct deposit.
I filed it online....it was a snap and they took no fees out.

[RuffnReadyOzStyle]

Shelly - thanks for the explanation... complicated system! What I don't get is why the rich (over $102,000) suddenly stop paying the social security levy..?

Extrastout - I thought it was $45 trillion, but I'll take you word for it... now that is some scary shit, 3.5 times US GDP. And that's only UNFUNDED PENSIONS! US debt is going to crash the global economy some time in the next decade...

At some point, probably in the near future (after the baby-boom demographic bulge is gone), the US government is just going to shut off welfare and pensions, or massively escalate taxes. Either way, the piper needs be paid.

[Shelly]

Shelly - thanks for the explanation... complicated system! What I don't get is why the rich (over $102,000) suddenly stop paying the social security levy..?

Extrastout - I thought it was $45 trillion, but I'll take you word for it... now that is some scary shit, 3.5 times US GDP. And that's only UNFUNDED PENSIONS! US debt is going to crash the global economy some time in the next decade...

At some point, probably in the near future (after the baby-boom demographic bulge is gone), the US government is just going to shut off welfare and pensions, or massively escalate taxes. Either way, the piper needs be paid.

I don't know...it goes up every year. Medicare used to cap out too, but they got rid of that years ago.

[E20]

I got back 160.00 for federal and I owe 4.00 for state + the 5.99 fee.

[CubanMustGo]

And as importantly you won't have to worry about either the state or the feds coming after you for non-filing. WTG!

[baseline bum]

Yeah I'm filling out the form and giving the proceeds to charity, I don't need that money right now. Maybe when I get a job and when filing taxes becomes a serious priority I will take it seriously.

Don't forget to get a receipt so you can use that donation in next year's tax return.

[TDMVPDPOY]

Don't forget to get a receipt so you can use that donation in next year's tax return.

if you didnt work this financial year and you made donations, you cant roll-over that transaction the following year when you are workn to claim that deduction, you cant do that.

[CubanMustGo]

if you didnt work this financial year and you made donations, you cant roll-over that transaction the following year when you are workn to claim that deduction, you cant do that.

And you'd have to itemize deductions if you *did* have income, in which case your total itemized deductions would have to exceed the standard deduction ($5,350 for a single taxpayer this year, a little more next) for it to do any good.

[Extra Stout]

Shelly - thanks for the explanation... complicated system! What I don't get is why the rich (over $102,000) suddenly stop paying the social security levy..?
Because there is a cap on benefits.


At some point, probably in the near future (after the baby-boom demographic bulge is gone), the US government is just going to shut off welfare and pensions, or massively escalate taxes. Either way, the piper needs be paid.
Countries never resort to austerity measures like that until after the hyperinflationary event.