High earners facing the eye-watering 60% tax band on some of their income from April are being urged to top-up their pension to combat the raid.
Those on more than £100,000 a year, will lose as much as 60p in every £1 to the taxman over that amount - because they are having their personal allowance snatched away.
Yesterday, the Mail reported that the new rates would make London the most highly taxed financial centre in the world.
From April 6, top-earners will start losing their personal allowance of £6,475 at a rate of £1 for every £2 earned above the £100,000 threshold, which creates a 60 % tax band on earnings up to £112,950.
Anyone making £112,950 or more will lose their personal allowance completely.
Those earning more than £150,000 will also face a new 50% income tax rate. However, anyone making just over £100,000 could avoid losing their personal allowance by contributing more to their pension, whether through an employer's scheme or privately.
Making such contributions can reduce your taxable income. So you could get £10,000 into your pension for a £4,000 loss in take home pay.
From April 6, someone with a £110,000 salary would take home £69,211. If they make a £10,000 pension contribution, then their take home pay would fall to £65,211.
Laith Khalaf, pensions expert at financial adviser Hargreaves Lansdown says: 'A lot of earners who fall into this bracket are already making plans to make a large pension contribution next year. It's your money to start with, it's just being taken in tax. All you are doing is clawing that bit back from the taxman.'
You could contribute more to an employer's pension scheme, which would reduce your gross salary, or those with a personal pension could pay £8,000 into the scheme. This then gets a £2,000 tax-top up, with the extra £4,000 in lost tax being refunded at the end of the tax year.
Essentially, it means these high earners can either have £69,211 in their pocket and make no contribution, or £65,211 in their pocket and £10,000 in their pension - £75,211 in total. There are 326,000 taxpayers who earn between £100,000 and £150,000 and another 317,000 who are paid more than this.
The Treasury has sought to crackdown on tax relief on pension contributions for those who earn more than £130,000. Their pension tax relief will gradually be tapered away, so that anyone earning more than £180,000 will be restricted to basic 20 % tax relief.
The soaring tax bills for the highest earners table
As part of the measures, anyone earning more than £130,000 who made pension contributions outside their normal pattern of saving before April 6 would also be penalised.
Our table, compiled by accountants Deloitte, shows the effects of the tax changes on high earners as their personal allowance is stripped away and the new higher rate band comes into force.
It will leave someone who earns £102,000 £400 a year worse off compared to this year. A £150,000 earner would pay £2,590 more in tax.
financial strategy,
Other options: VCTs are another, albeit high risk, way to reduce the tax you pay
Patricia Mock, tax partner at Deloitte, says: 'I don't think some people will have realised quite the effect this was going to have. But around now they will be getting-their Coding Notices for next year and where it says personal allowance it will now say zero.
'If you fall into the relevant income bracket, then sheltering your income by making a large pension contribution is a very practical way forward.'
The removal of the personal allowance is going to create distortions in the amount where different workers start paying higher rate tax. Someone who earns less than £100,000 will get a tax-free allowance of £6,475. They then pay 20% on the next £37,400 and 40 % on earnings over £43,875.
Those paid more than £112,950 will pay 20 % on their first £37,400 of income, 40 % on earnings over £43,875 and the 50 % rate at £150,000.
Thursday, March 11, 2010
Would A Soda Tax Be A Big Deal?
By Jacob Goldstein
The recession has left some state and local governments desperate for new sources of money. That's giving a boost to an idea public-health types have been pushing for a while now: taxing sodas and other drinks with added sugar.
New York's governor has called for a penny-per-ounce tax on sugar-sweetened beverages, and Philly's mayor wants one that's twice that high.
Some public-health experts argue that taxes like these could slow the rise in obesity rates. The beverage industry has called it "a money grab, pure and simple," and says it's a "myth" that taxing one type of product will affect obesity rates.
For both sides, there's a fundamental economic question here: How much would a tax drive down consumption?
Economists call this issue "price elasticity of demand" -- how much demand goes down as price increases. Price elasticity of demand is different for different products.
A study published this week in the Archives of Internal Medicine used data from a 20-year study to estimate that a 10% increase in the price of soda would lead to a 7% decrease in the amount of soda calories people consume.
A recent paper in the American Journal of Public Health pooled results from 14 previous studies and concluded that for the broad category of "soft drinks," a 10% increase in prices would lead to an 8% decrease in consumption.
Sodas, sports drinks and the like only cost a few cents per ounce. So a penny-per-ounce tax could lead to a price hike of about 20%.
Price elasticity isn't totally linear -- a price hike of 20% wouldn't reduce demand by exactly twice as much as a hike of 10%. Still, those recent studies suggest that a penny-per-ounce tax could drive down consumption of sugary beverages by well over 10%.
The recession has left some state and local governments desperate for new sources of money. That's giving a boost to an idea public-health types have been pushing for a while now: taxing sodas and other drinks with added sugar.
New York's governor has called for a penny-per-ounce tax on sugar-sweetened beverages, and Philly's mayor wants one that's twice that high.
Some public-health experts argue that taxes like these could slow the rise in obesity rates. The beverage industry has called it "a money grab, pure and simple," and says it's a "myth" that taxing one type of product will affect obesity rates.
For both sides, there's a fundamental economic question here: How much would a tax drive down consumption?
Economists call this issue "price elasticity of demand" -- how much demand goes down as price increases. Price elasticity of demand is different for different products.
A study published this week in the Archives of Internal Medicine used data from a 20-year study to estimate that a 10% increase in the price of soda would lead to a 7% decrease in the amount of soda calories people consume.
A recent paper in the American Journal of Public Health pooled results from 14 previous studies and concluded that for the broad category of "soft drinks," a 10% increase in prices would lead to an 8% decrease in consumption.
Sodas, sports drinks and the like only cost a few cents per ounce. So a penny-per-ounce tax could lead to a price hike of about 20%.
Price elasticity isn't totally linear -- a price hike of 20% wouldn't reduce demand by exactly twice as much as a hike of 10%. Still, those recent studies suggest that a penny-per-ounce tax could drive down consumption of sugary beverages by well over 10%.
Friday, March 6, 2009
W-2 FORM ,W-3 FORM,W-4 FORM
W-2 FORM, The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.Wage and Tax Statement, is the form U.S. employers are required by the IRS to issue for each employee before February 28th of the following year. The W2 form lists the employee's total wages/compensation and taxes withheld within the calendar year of the year preceding.
W-3 FORM, Transmittal of Wage and Tax Statements, is a form employers must use when filing paper W-2s with the Social Security Administration. Form W-3 summarizes the total wages, Social Security wages, federal income tax withheld, and FICA tax withheld from employees during the year and lists the number of W-2s being transmitted.
W-4 FORM, Employee's Withholding Allowance Certification , is completed by each employee so that the employer can withhold the correct federal income tax from the employee's pay. Because tax situations may change, employees may want to refigure their withholding each year.
Airlines, visits diapers.com, and uses TaxAct
Getmytaxform.com is a top 10,000 site that reaches over 301K U.S. monthly people. The site appeals to a younger group.The typical visitor flies on Delta Airlines, visits diapers.com, and uses TaxAct.
Audience Also Likes
People who visit this site are likely to visit sites in these categories:
| Audience Also Likes | Affinity | |
|---|---|---|
| Taxes | 4.1x | |
| Insurance | 2.8x | |
| Car Rental | 2.7x | |
| Educational Resource | 2.5x | |
| Toys | 2.4x | |
| Jewelry/Luxury Goods | 2.3x | |
| African American | 2.3x | |
| Government | 2.1x | |
| Home Furnishing | 2.1x | |
| Telecom Services | 2.0x | |
| Baby | 2.0x | |
| Kids | 2.0x | |
| Pharmacy | 1.9x | |
| Airlines | 1.9x | |
| Incentive | 1.9x | |
Audience Also Visits
People who visit this site are likely to visit these sites as well:
| Audience Also Visits | Affinity | |
|---|---|---|
| getmyw2.com | 278.5x | |
| shawinc.com | 232.3x | |
| tgt401k.com | 88.3x | |
| oasisadvantage.com | 79.3x | |
| convergys.com | 63.5x | |
| definityhealth4targe | 51.0x | |
| mypayandbenefits.com | 44.6x | |
| deltacommunitycu.com | 42.3x | |
| nwapeople.com | 35.8x | |
| incentranet.com | 28.2x | |
| subimo.com | 27.8x | |
| knighttrans.com | 24.4x | |
| wingsfinancial.com | 24.0x | |
| geotrust.com | 22.9x | |
| cvgs.net | 21.4x | |
Audience Also Searches For
This site is often found using these keywords:
| Also Searches For | Affinity | |
|---|---|---|
| www.getmytaxform.com | 797.4x | |
| getmytaxform.com | 697.7x | |
| getmytaxform | 621.2x | |
| www.getmytaxform | 621.2x | |
| www.getmyw2.com | 155.3x | |
| getmyw2.com | 89.3x | |
| convergys portal | 82.4x | |
| https | 7.4x | |
| w2 online | 6.1x | |
| https: | 5.8x | |
| turbo tax | 2.9x | |
| wedding gowns | 2.9x | |
| target | 2.7x | |
| special k diet | 2.3x | |
| irs forms | 1.9x | |
Subscribe to:
Posts (Atom)
