ILPT Request: Fast and easy way to get few hundred

[u/PitBullDOGGO]

What are the easiest ways to get few hundred dollars in 2021? I am open to any ideas just not for carding because that seems difficult.

Thanks in advance!

[u/disinterested_a-hole]

That's cute. Try again.

https://www.taxpolicycenter.org/briefing-book/how-does-federal-tax-system-affect-low-income-households

"The Urban-Brookings Tax Policy Center estimates that in 2020, households in the lowest income quintile have a negative average income tax rate as a result of refundable credits—namely the earned income tax credit (EITC) and the child tax credit (CTC). That is, the payments the lowest-income households receive from refundable credits exceed any income tax they owe."

[u/Dcarozza6 → u/disinterested_a-hole]

That still doesn’t clear it. Let’s say you make $50k a year. Let’s say for simplicity you live in an income tax free state. Your tax liability is $8140. So you have $41,860 take home pay.

Now let’s say you receive a total of $10,000 back in credits. So you really have $51,860 take home pay. Yes, you’re getting back more money than you’re paying.

But let’s say you also sell $4000 worth of furniture. Your taxable income is now $54k. Your tax liability is now $9073. So your take home pay before credits is now actually $44,927. $54,927 after credits.

$54,927 income when you sell furniture — $51,860 when you don’t sell furniture = $3067. You may have sold $4000 of furniture, but it only increased your take home pay by $3067. You paid $933 of taxes on that $4000 you made.

Yeah, you received $927 back from the government, but you would have received $1,860 from the government if you didn’t sell furniture. Selling the furniture increased your taxable income, and thus reduced how much you’re receiving as a refund.

[u/BeefcakeWithCheese → u/Dcarozza6]

If you’re worried about taxes just put a sock over your w-2. That way when the IRS tries to give you an audit ahh they get is a sock.

[u/disinterested_a-hole → u/Dcarozza6]

Not good at reading the cited source huh? That's too bad, because it looks likeath isn't your strong suit either, huh sport? Or I guess you just like making up tax rates.

Coincidentally, here's an example of your exact dollar scenario ($54K) and the presumptive tax liability is roughly half of what you claim:

"while you’re in the 22% marginal federal income tax bracket, just $925 of your $54,000 income would be taxed at that rate. Your total federal income tax bill would be $4,867.50, putting your average tax rate at 9% for your $54,000 in gross income and 11.7% for your $41,450 in taxable income."

That $4800 is before any earned income tax credit or other credits. So yes, you can get to negative tax rates pretty quickly.

[u/Dcarozza6 → u/disinterested_a-hole]

That article is not including taxes withheld for FICA, which includes Social Security and Medicare.

Here’s a link to a 2021 tax credit calculator, which does not include FICA taxes, since that’s what you want to discuss.

Now, at $50k a year, you’re looking at a tax liability of $4314. Say you get $10k back in credits, you’re actually looking at getting back $5686, for a “take home” pay for $55,686. $50,000 — $4314 + $10,000 = $55,686. I put “take home” pay in quotes, because it doesn’t include the FICA taxes that also need to be taken out.

Now, at $54k a year, your tax liability is $4,942. You get your $10k in credits. So you get back $5058, for a “take home” pay of $59,048.

$59,048 — $55,686 = $638. You are receiving $638 less from the government because of that $4000 you made selling furniture, essentially paying $638 taxes on it. Remember, when your FICA taxes are added, it will end up being more than a $638 difference.

[u/disinterested_a-hole → u/Dcarozza6]

Whatever dude. $54K is your number, not mine. The first article clearly states that the lowest quintile earners (which is well under $50K) have a negative tax rate, which was my original point that you found laughable due to your ignorance.

So my original point stands - many low earners pay no taxes at all, and some have a negative tax rate.

[u/Dcarozza6 → u/disinterested_a-hole]

This whole discussion was about whether you’re paying taxes on the furniture you’re selling. Having a negative tax rate doesn’t mean you’re not paying taxes on future income. Your “negative tax rate” becomes less negative as you make more money. If the government is saying “if you sell that $4k of furniture, we’re going to give you less money back”, then yes, you’re essentially paying taxes, because you aren’t increasing your take home pay by $4k, you’re increasing it by $4k minus whatever less money you’re getting back (in this case, $638).

Knowing how taxes work isn’t ignorance.

[u/Rbenat → u/Dcarozza6]

Still end up making more money tho…

disclaimer not an accountant, and not going to go through all y’all’s math lol, but at least in the us you only play the increased taxes on income over that tax bracket.

e.x: If the income tax is structured so that

0-50,000 = 0% taxes

50,001-60,000 = 10% taxes

And you make 54k you would only pay 10% on the 4K over 50k so $400.

If they did not do this an earner of ≈49,999/yr would take home all dat (obv - social security etc..).

But an earner of 50,001 would have to pay ≈5k in taxes bringing their take home down to ≈45,000.

A lot of people in the us advise others to turn down raises because it would put them in a higher tax bracket, and cause them to have less take home pay, but that is practicaly never the case (again not an actnt there may be edge cases). Bigger earned income always equates to bigger take home pay, but also leads to bigger contributions to “society” (if the govt. actually spends it on society instead of bombing foreign nations etc.. lol)

Bonus: if you track your miles & other expenses while getting/cleaning/selling items & you have a good accountant. You can write them off as business expenses which coupled with your other income could actually bring you tax contribution down lower than it would have been before! It is unlikely to be enough to do that, but it will definitely bring your total taxes payed down a bit 👍🏼

[u/Dcarozza6 → u/Rbenat]

Right. But the discussion wasn’t whether or not you’ll make more money doing it (that part is obvious), it’s whether or not you’ll get taxed for it. And the answer is yes; regardless of what credits you’re taking, if you make $4k extra selling furniture, your take home pay will increase by less than $4k.

[u/Rbenat → u/Dcarozza6]

Gotcha, didn’t read to deep into the thread tbh. I just really want to dispel the myth that you could end up with less money by making more money because it hurts the lower classes by pseudo disincentivizing attaining higher wages. :/