Salem Community Patriot | February 24, 2012 - 5
Piece of the Pie Maintaining Your
utin EA - Total Tax Solutions LLC The Tax Rate Schedule Last week, we left off at the calculation of the taxable income, and
now we need to understand how the tax is calculated from this number. With this knowledge, you will have the foundation for explaining how deductions, credits and various fringe benefits available to many taxpayers can affect your individual situation. There are several tax brackets existing in the tax code those being the 10%, 15%, 25%, 28%, 33%, and 35%. Each percentage has a “bracket” of income allocated to it, based upon a particular filing status. This table is known as the Tax Rate Schedule. For instance, the 2011 tax rate schedule shows that the 10% tax
bracket for a single individual is from $0 to $8500, whereas the 10% tax bracket for a taxpayer who qualifies as a head of household is $0 to $12,150.
A single person, who has taxable income of $15,025, has a tax liability of $1829 taken from the tax tables. The first $8500 is taxed at 10%; the balance of $6525 is taxed at 15%. The $1829 tax liability is 12.17% of the $15,025 taxable income. This 12.17% is the mean of the two percentage brackets (10% and 15%) used to calculate the tax. Based upon this schedule, a single person starts to pay 15 cents on the dollar at $8500, .25 @ $34,550, .28 @ $83,650, .33 @ $174,400 and .35 @$379,150. With this understanding, you can see that a taxpayer may have gross income in a 25% tax bracket, but if they have enough deductions, they can lower their taxable income to a 15% tax bracket.
Deductions that lower the gross income come in many forms. Adjustments allowed on the tax return to arrive at the AGI, lowers this income resulting in a lower AGI and lower taxable income. The standard /itemized deduction and exemptions lower the taxable income but not the AGI. Various fringe benefits (Cafeteria or Section 125 Plans) offered by employers allow a taxpayer to pay for certain benefits before taxes are withheld. This also lowers their earned income reported on line 7, which consequently lowers the AGI and the taxable income for that taxpayer. How much it saves any taxpayer is proportionate to where their taxable income would be without the benefit. (The single taxpayer in the example above saves .15 on every dollar that they can lower their taxable income of $15,025, until they lower it below $8,500, when they then start to save only .10 on the dollar.) A few examples of fringe benefits offered by employers are health
insurance, life insurance, dependent care assistance, Health Savings Accounts for taxpayers who have eligible, high deductible health insurance policies, and medical savings accounts for out of pocket medical expenses. Usually these types of benefits not only save on federal and state taxes, but are not taxable income for Social Security/ Medicare with holding purposes as well, saving an additional 7.65% for the taxpayer. Money contributed to 401K or IRA plans are pre-tax for federal and state tax purposes only and are also a means of lowering taxable income and AGI. Remember, a lower AGI on the tax return is comparable to the benefits of lower cholesterol levels to the heart in most cases. Many tax deductions and credits allowed by the tax code “phase out” for high income taxpayers. This phase-out range is calculated starting with the AGI found on the tax return and varies for each deduction or credit as we will discuss in the near future. Therefore concentrating on lowering the AGI of high tax bracket taxpayers can be of the utmost importance to save serious tax dollars.
Next week: Itemized Deductions Have a tax question? E-mail email@example.com
About Total Tax Solutions: W.F. Boutin EA registered Total Tax Solutions in the State of NH as a LLC in the summer of 2006 after 10 years experience working for a major tax preparation company and 8 years of teaching various tax courses. The company mission is to deliver an excellent customer service experience year around, to offer knowledgeable advice so that clients can make informed decisions regarding their financial future, and to provide this service with integrity, confidence and professionalism.
More Letters to our Editor continued from page 4
Consider All the Options Before Voting for Phase 2
Te school renovations and master facility plan are a hot topic. In my
opinion people are avoiding facts and playing on the emotions of our town’s parents to encourage a Yes vote on the Phase 2 renovations. Consider both sides of the issue. “Pro” Phase 2 renovations
1. No room for kindergarten and deferred maintenance on the three remaining elementary schools has left them in need.
2. Renovations will provide expanded safety features. However, as long as the asbestos remains undisturbed in the tiles, there is zero danger to kids.
3. In 2013 we will pay $40,000 per year for the travel trailers. 4. Bond rates are so low, we would be crazy not to borrow for something! Labor costs and some materials are also low cost.
5. Will provide more efficient utilities and add sprinkler systems. Te children are safe. Schools are made out of fire retardant materials. However, extra water is always “welcome” should there be a fire.
6. If we delay remediation of the maintenance issues at the remaining schools, we will incur additional fees to the architect and delay the remediation of the current issues even longer. “Against” Phase 2 renovations
1. Te administration has been deferring maintenance and capital improvement projects, why would this change after renovations?
2. Phase 2 renovations will cost a taxpayer with a $300,000 home $137 per year. Soon the school board will present us with phase 3 (HS) and phase 4 (Woodbury). Current estimates for phase 3 and 4 are $80 million ($500-plus per year for the same taxpayer if rates and costs stay low). Phase 1 costs $87 per year this taxpayer so we are at a total of $724 (137+500+87) per year in additional taxes.
3. High taxes are a detriment to new families moving to town. Salem’s tax rate is in the middle of rates for the surrounding towns. Salem’s 2011 tax rate is $20.14 per thousand (after all renovations, we will be about $23 per thousand if no other taxes are raised). Windham is $23.08, Pelham is $21.41, Hudson is $16.62, Atkinson is $18.80, Londonderry is $20.34
4. Te cost to educate a student in Salem was $6,362 in 2002. In 2010 this cost is $9,240. A 45 percent increase in cost over seven years represents no capital improvements and little maintenance on our schools.
5. School enrollment is down 25 percent in six years (5,000 kids in 2006 and 4,000 in 2012).
6. Tere are many buildings and roads in our town that need capital improvement (PD, FD, roads). While the school board can only look at the school budget, we tax payers, must look at the bigger picture.
7. A new family considering our town will research two items. Te first is tax rate, see above. Second is student test scores and academic statistics. In 2010-2011 only 28 percent of our 11th graders were proficient or proficient with distinction in Math, 70 percent for reading, and 35 percent for writing. Tis compares to Windham’s 39 percent math, 78 percent reading, and 47 percent writing. We are significantly lower than Windham and fare similar to most of our other neighbors if you expand this research. We must send a clear message by voting this down. In my opinion
Week 5 2-24-2012
we should concentrate on critical infrastructure needs, stop deferring maintenance, get teachers raises, move to merit staff bonuses and fix performance issues. I love our town and I am an active member in the community. I want what is right for our kids as well as what is right for our taxpayers. Remember to vote on March 13.
Dane Hoover - Salem
Political Correctness Walks a Fine Line Letter writer Ed Brooks’ tirade against “political correction” was exactly
what we don’t need in America today. He is right about one thing, that words have connotations, both positive and negative, so why put the emphasis on misleading generalizations? Would Ed go back to using the “N” word when referring to our African American citizens. Furthermore, referring to a person as a retard is unfair because there are different degrees of mental impairment and does not aptly define the problem. Te same goes for words like fat or skinny. Would Ed take us back to the days when gay men were called faggots and lesbians dikes; when Italians were wops and Jews were Kikes; Poles were referred to as Polacks - all denigrating appellations. Ten referring to political correctness as a free speech issue belies the fact one can say something precisely or use an offensive term and shape a negative concept about a person. Free speech is not affected but decency and accuracy are. Finally, I am grateful that political correctness has taken hold. People do not need sweeping generalizations about their personal attributes or lack thereof. If Ed thinks this is a nasty world, he should have seen us back seven or eight decades ago.
Dante Ippolito - Norwell, MA
Approving Phase 2 Now Enables Phase 3 (High School) Renovations Sooner
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Authorized GENERAC Dealer 603-595-2970 ® All of us agree that Salem High School is in great need of renovation.
After voters defeated the previous high school renovation plan in 2008, other priorities came to the forefront. Te elementary schools had to be addressed to accommodate Kindergarten and adequate educational spaces, in addition to bringing the 50-year-old buildings up to current safety code. Te Facility Master Plan was developed, of which Phase 3 is the high school, and Phase 4 is Woodbury Middle School. Now three of our elementary schools (Phase 1) have been completed according to the plan, and the second three (Phase 2) are on deck for the same level of improvements.
Te high school cannot realistically be proposed any sooner, and it is likely that renovations to ALL schools will be delayed, if Phase 2 does not pass at the polls. If Phase 2 is approved, the planning for Phase 3, Salem High School, will begin this spring. Te School Administration will bring together a group of citizens to begin reviewing the previous high school plans, discuss the pros and
We are looking for our forever-homes!
Pet Adoption Day
Please come meet us at February 25
from 11:00 - 2:00
at the First Congregational Church in Pelham.
To see a complete listing of our available dogs, please visit www.arnne.org
cons, and then decide whether to adopt, adapt, or scrap it altogether and begin anew. Ten the plan must be built, in conjunction with architects and the owner’s project manager. Due to the complexity of the high school scope and needs, this initial
process will take more than a year to develop, and then it will be proposed to the community for additional input. Terefore, the soonest a high school proposal could even come to the ballot would be 2014. Tere is also state funding set aside for the Career & Technical Education Center, which would be available in 2014-2015, and it would make financial sense to align CTE with the entire high school renovation. If Phase 2 is not approved, the high school plan cannot possibly be ready for the ballot any sooner than if Phase 2 is approved, and it will likely be delayed longer without the passage of Phase 2 because of school board support for solving the current inequities and inadequacies in the un- renovated elementary facilities. By completing Phase 2 at today’s prices, we prevent all schools from being delayed and thus completed at tomorrow’s higher prices. We’ll get the work done at lower cost, while a facilities committee concurrently analyzes the high school plan so it is ready for voters in a reasonable timeframe. By following the Facility Master Plan and approving Phase 2 now,
we save money over time. It enables us to get all of our school facilities taken care of in the least amount of time, and in the most cost-effective manner. People could argue all day long about which schools should be done first, but that’s not going to help move Salem forward. For too long this community routinely voted things down, and that’s why we’re in the situation now where all of our school facilities need renovating. We have a well-developed plan for the three remaining elementary schools, good momentum, and a great track record with the completion of Phase 1 - Barron, Lancaster, and North Salem - on time and within budget. Interest rates and costs are still low – it makes so much sense to keep the progress going. Please vote “yes” on School Article 2, March 13.
Sherry Kilgus-Kramer - Salem
Women Should Make Teir Own Decisions, Not Churches or Politicians
Te idea that politicians and clergymen (most of whom are male) want to tell me what to do about my most personal and private woman’s decisions - birth control and abortion - is abhorrent to me. Women that I know are perfectly capable of making these decisions by themselves. Tey don’t need religious organizations or legislative bodies to tell them what to do. If women really do have equal rights in this country, they should be able to choose for themselves on these most personal and private women’s decisions. Both birth control and abortion should be available to every woman.
Every woman should have the right to choose what is right for her and her own most personal and private needs. No law or religious organization should dictate to any woman what her choice should be. Republicans should be chastised for their stand against women on these
I thank President Obama for standing up for and respecting women’s rights with respect to requiring private health insurance plans to cover the full cost of birth control for women.
D. M. Lewis – Salem Local Businesses, Trivent Financial for
Lutherans Raise Over $2,100 for Homeless Families Program
Family Promise of Greater Rockingham County (FPGRC) greatly
appreciates the below-listed businesses and locations, and Trivent Financial for Lutherans, who helped raise funds to start an Interfaith Hospitality Network (IHN). Once open, the IHN will help homeless families in the Salem/Derry area get back on their feet. From Halloween through Christmas 2011, these businesses placed a
House for Change, a box shaped like a house, on their counters. Te houses were decorated by local youth and by participants in Salem Workplace Success. Houses for Change raised over $1,600 thanks to these locations. One third of this amount will be matched by Trivent Financial for Lutherans’ Care Abounds in Communities program, bringing the total raised to over $2,100. A few businesses could not place a house, but made a donation instead or allowed us to man a table during a busy time; these are included. Windham: Cyr Lumber, Artistic Creations, Te Village Bean, Capri
Pizza, Windham Beauty Shop, Windham Junction/Te Kitchen, Windham Deli, A Simply Wholesome Life, Bella Vino, Windham Barber Shop, Windham Town Hall. Salem: Lady Grace, Sugar and Spice Bake Shop Absolute Elegance,
Chatila’s Bakery, J. Stewarts Flower Shop, City Line Market Giovanni’s , Gulf Gas Station, Harry’s Barber Shop, Staples, Michael’s Market, Natural Marketplace, Studio 9 Hair Salon, Sunshine Laundry, Vitales Hair Salon, McKinnon’s Market, Londonderry, Mack’s Apples, Curves of Londonderry. Derry: Bark Avenue Pet Salon, Te People’s Barber Shop, Big Lots,
C&K Restaurant, Rite Aid, JR’s on Bypass 28, East Derry General Store, A Cut Above Hair Stylist, Church of the Transfiguration, Etz Hayim Synagogue. Auburn: Mobile Station, Route 28 Bypass, Auburn Library, Auburn
Supermarket. Chester: Hardware store, KD Nails, Chester Restaurant, Chester Fire
Department. Sandown: Sandown Town Hall, Sandown Market, Bruchetta’s Pizza
parlor Hampstead: Bean Towne, Route 111 Dry cleaners, Toss & Sauce Pizza,
Te English Muffin, Hampstead Village Variety, Don’s Market. Other Towns: Bucco’s Deli and Café in Plaistow, Eggie’s Family
Restaurant in Atkinson, Kingston Fire Department, Kingston Library, Newton Library, Danville Library, Sandy’s Variety Store in Manchester. FPGRC is a local affiliate of Family Promise, a national organization seeking to end homelessness in the U.S. among children and their families. Affiliates create a local IHN program to temporarily shelter families in existing church buildings on a rotating basis. Professional staff at a centrally located Day Center work with the families to solve the issues that led to homelessness.
Letters to our Editor - continued to page 6
Register to Play Salem Youth Soccer! Spring Registration
for Recreation is NOW OPEN! PLEASE GO TO
Come play soccer with us and have a ball!!!
Come play soccer with us www.salemsoccer.org
Photos courtesy of “Creations by Sea-Jay”
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