No. Both methods result in the same $3588 refund. Doug even says so: "NOTICE, however, you are only asking for and getting a refund of the FITW,,, namely, 3588."
Using the "John DOH" filer grossing $800/week, $41600/year:
DOUG555 EXAMPLE:
41,600 + 3588 + 1747.20 + 603.20 = 47538.40
Line 21 has (47538.40)
Line 22 has (5938.40)
Refund of 3588.
NET PAY EXAMPLE:
Line 21 has (35662.)
Line 22 has 5938.
Refund of 3588.
http://jesse2012.com/JTD1040.pdf
Heavy is the head that wears a crown.
You're right Johnny...same refund both ways....and for that matter, same refund if you manipulate the numbers for a GROSS PAY EXAMPLE.
And that gross pay ties back into Doug555's "ALL TRANSACTIONS" reasoning....to include the FITW & FICA amounts for the "W-2" employees....and your mention on another post "You cannot exclude or deduct more than your foreign earned income for the year."
I understand the logic behind the "All Transactions", but had such a hard time wrapping my head around the actual numbers in doug's example....especially when the refund comes out the same when using Gross Pay....and in my mind Gross Pay includes the transactions of FITW & FICA....but I definitely see the logic of not using Net Pay for the reason that FRN's & Lawful Money become co-mingled.
Do you and Doug carry around 2 wallets to avoid co-mingling?
Johnny, while as filers on a joint return paying $2100 in fed taxes, I feel it should be pointed out, that by virtue of primary filer being an "employee" in "employment," the employer paid in an equal (at least once was equal) amount of SocialSecurity and Medicare taxes, box 4 and box 6, into the system. So the total contribution to federal coffers would be 2100+3200+700 = $6000.
I'm surprised crazy-math Doug did not catch this as he's always looking for moar.
Johnny, I meant that in the one real-world example (Primary/Secondary filer) 'they' left $2100 on the table.Originally Posted by JohnnyCash
In your your 'John DOH' example, both methods work because the Gross Pay is relatively low. So for the NET PAY method, plug in 75,000 Gross Pay at single-0 withholding: you do NOT receive all of your FITW. You end up 'forfeiting' less than $1000. So depending on your pay grade and withholding exemptions, you may not receive all of the FITW. Which brings me to this point...
You can NEVER redeem all the Gross Pay (including deductions) in lawful money using the NET PAY method. As Doug555 pointed out, I don't believe there is a law that states that you are NOT allowed to redeem the Gross Pay. If there is, someone please provide it if they know of it.
Here's another idea. If people are wary of Doug555's accounting method, i.e. 'adding all W-2 "income" transactions (including SS/Med) to be greater than Gross Pay' (I still need to verify that accounting method with an accountant), then the following might be an alternative to that. And, it actually combines the D555 and Johnny methods, with a twist I have added. The more I think about it, this seems to make lawful and legal sense. Here goes...
1) Create and record at the County, the suggested Affidavit that demands lawful money for ALL transactions and the discharge of all obligations via the 95a(2) language. I believe that Affidavit is linked in the 'Treasury Letter' topic. I don't know the method of linking that here, so I apologize. So you are therefore demanding lawful money on the GROSS PAY and ALL other transactions (including NET, SS/MED, ATM withdrawals, etc), with that Affidavit recording.
2) Now using the 'John DOH' example:
Line 21 has (39250) This is NET pay of 35662 + FITW of 3588.
Line 22 has (2350) This is SS of 1747 + MED of 603.
The refund is still 3588. Even if you plugged in the 75,000 Gross Pay example I mentioned, you would still receive your full FITW refund.
Here's the thought on this alternative (combining D555 with Johnny, and my removing FITW from Line 22 and adding to Line 21):
1) There is no statute or regulation (if there is, PLEASE publish it) that determines HOW to provide for a lawful money DE-DUCTION or RE-DUCTION on the 1040.
2) By including the FITW with NET PAY as "Other Income", you are demanding THAT portion (FITW + NET PAY) of the GROSS PAY in lawful money to be refunded, BECAUSE you were not able to redeem the FITW, UNTIL NOW - on the 1040.
3) This is in fact an 'income tax' matter, is it not? Look at the PAYMENTS section of the 1040. For 2013, what does it tell you to put on Line 62? FEDERAL INCOME TAX WITHHELD (I'm not yelling, just emphasizing). Do you see SS/MED anywhere here (forget the 'excess SS/etc)? No, because it's out of scope for the 1040. The SS/MED amounts are the so-called privilege/contract/taxable-event that incurs an "income" tax...so..
4) IMO the Doug555 example might want to remove the FITW from Line 22. I could say the same for the Johnny example IF he had the 'all transactions' demand Affidavit filed and the D555 'all transactions' language on the checks/slips, where he would then add the FITW to Line 21. If you are redeeming in lawful money in the D555 method, and the NET PAY you received is NOT "income", then how is the FITW considered "income" if you are receiving ALL of it back with the RE-DUCTION from GROSS PAY? If it's NOT SS/MED, then all the other amounts (NET PAY and FITW) are NOT "income" - IF you have demanded that ALL transactions be RILM ...
We KNOW we can't ask for a SS/MED refund on this Form 1040, but we CAN ask for the FITW of which WOULD have been redeemed in lawful money if we were paid in GROSS PAY. Since we are not, then the Affidavit notifies the IRS/Treasury if necessary (not a bad idea to include it with the 1040) that yes, I also have demanded the FITW (and SS/MED) in lawful money. The checks/slips are an extension of the Affidavit (or vice versa, however you want to look at it). So if I have filed my affidavit (and novated the checks/slips with 'all transactions/95a(2)' language), then I know that I can rightfully demand the NON-SS/MED amounts because this is an "income" tax Form. And my "income" in this example is $2350. The remaining (NET + FITW) is not "income" in the statutory taxation sense. Therefore it is removed from the Line 22 "income".
I recognize that BOTH methods have been working and that is great. However, I think the combined method may be viable (removing FITW from Line 22, adding it to Line 21). I'll have a year to think it over. For 2013 and 2014, it'll have to be the Johnny method for my situation.
All thoughts welcome.
Last edited by itsmymoney; 01-23-15 at 03:01 AM.
Thanks for mischaracterizing our win as ... left $2100. on the table. Very incongruous coming from a persona who sets their W4 exemptions to 0 yielding maximum benefit to the bank&tax scam; at a minimum giving the govt a free loan. I can say we were both elated to receive a $5k refund last March. More than the box 2 FITW withheld. We got exactly what we wanted & asked for, no more & no less. That's less than 2% tax paid on $109,00 reported income. The federal govt does provide some important services and it's possible the primary filer was willing to contribute ... a little.
You might forgive me for glossing over the remainder of your post to save time. Just couldn't get past that .... certain agenda-driven aroma. Might wanna do something about that discharge.
Johnny, I don't have an agenda. Quite the opposite. Why do you always dismiss other people's ideas and interpretations? As you stated, you "just couldn't get past that...". That is total arrogance and ignorance. YOU know it all, so why should we think for ourselves? We'll just blindly follow the pied piper Johnny. With or without your success, people have questions, theories.
Despite your intelligence, you refuse to answer or address VALID questions/interpretations/theories...you name it. Case in point: you took a PARTIAL redemption for your FITW, where you 'let them keep' that $2100. So you VOLUNTEERED part of that FITW as FRN's, and redeemed only the NET portion as lawful money. My point was that I believe you have the right to redeem ALL THE FITW if recorded properly. I don't care WHAT you do. But YOU missed the point, as usual.
BTW, smart ass, I am prepared to file RILM returns for 2013 and 2014. But you didn't read that, did you? Because of course, you didn't need to. Ignore anything that does not suit YOUR agenda. The irony is that I am using the examples THAT YOU PROVIDED for 2013 and 2014. That FACT flies right by your prejudiced brain. Did you read that last sentence? Because I'm not sure if you glossed over this or not because my opinions are so insignificant.
And David Merrill, I disagree with you. Others learn by example. If no one provided examples or guidance on this great website, then everyone would have to make an educated guess as to how to prepare a 1040 for lawful money. I am not smart enough on my own to know that I could enter a negative "income" value on Line 21, let alone know THAT line can be used to record your lawful money demand. Just saying.
Q: Why is SOME or ALL of the FITW included in Line 22 "income" on the 1040, when SOME or ALL of it has been redeemed as lawful money? If it's RILM then that portion is not "income", right? VALID question.
Last edited by itsmymoney; 01-23-15 at 08:57 PM.
Must have been part of me unwilling to be silent in the face of (the afflicted with) evil. I have some quatlude canceling headgear now; all set.
David & Michael, thank you for your comments ... and this IRS blessing!
Good way to put it. By their silence, the IRS has given you their blessing. Lawful money income is not income under the Revenue Acts of Congress. Or maybe a special dispensation - you're a member of that - group in Colorado doing it right - I don't know how that works, I'm not Catholic.
Special Dispensation. You raise an interesting question. Since lawful money filers are NOT bothered by the IRS, who or what mechanism prevents the IRS notices from going out to them? Are all the suitors on a NO FLY LIST? I doubt there's a LAWFUL MONEY DEPT at the IRS, too obvious. This is the sort of secret info that needs to be kept hush-hush. Do you think a single attorney must sign-off on every notice that goes out?
LPC may have given us a clue. They might be getting bank records ... not looking for unreported income ... but to see if you're endorsing private credit of the Federal Reserve, via naked signature backside of your paycheck !
BTW, we just got our W2 for 2014. After LM filing expect another fat refund & victory!
Last edited by JohnnyCash; 01-30-15 at 02:12 AM.
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