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Are we talking about bonuses that are included on your check or in a separate disbursement? I'll admit I haven't really paid attention to Trump tax act, which is apparently where the 22% rate comes from. I'm used to the tax being in the 40% range.
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Sep 22, 2020 15:24
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Heffer posted:A good friend of mine ran payroll at an auto dealership, and their bonuses were after tax. But it's easy for the math to work out that your $500.00 bonus came out at $499.98. So she kept a jar of pennies on her desk because, yes, those assholes would come and demand the "full amount". When I became commissioned my base pay was cut by 16 cents per year. It didn’t matter though because my actual compensation calculation was 100% based on commissions and I would only make just my salary if I had an absolutely abysmal month, but I joked about it with my peers.
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Sep 22, 2020 15:25
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Subjunctive posted:Why is this so hard for so many people? A lot of people don’t do their own taxes. Even if they do do their own taxes, the tax forms/tax software is not designed to be instructional, and instead is designed so that someone who doesn’t understand math very well just has to mechanically follow the steps to arrive at the number you owe the gov’t or will get refunded by the gov’t at the end of the year.
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Sep 22, 2020 15:31
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The junk collector posted:Several places I've worked including the Federal government had a setup where a small bonus could lower your paycheck due to withholding. The way the payroll software was setup it calculated your withholdings as if that was your standard pay with no allowances for bonuses or one time payments and it was all done automatically every paycheck. You got everything back at tax time but it was still annoying and a lot of people considered overtime or bonuses as worthless because of it. The whole thing could be avoided by having better payroll processing but no one in that department was going to touch the automated systems because of the effort and consequences if something went wrong versus just coasting. Honestly, there was probably a check box that they could have checked to fix this. A lot of payroll people never look at software beyond how they were trained. Or just, you know, do a separate check/direct deposit just for the bonus.
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Sep 22, 2020 15:31
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Krispy Wafer posted:It's more complex than just a flat tax, but it's less complex than your usual deductions/tax situation. The federal portion at least is the same for most everyone. Mine will even match 401k contribution from my bonus 
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Sep 22, 2020 15:32
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silence_kit posted:A lot of people don’t do their own taxes. Even if they do do their own taxes, the tax forms/tax software is not designed to be instructional, and instead is designed so that someone who doesn’t understand math very well just has to mechanically follow the steps to arrive at the number you owe the gov’t or will get refunded by the gov’t at the end of the year. This is true, but just looking at a W-2 should dispel this as it all shows up on the W-2 as wages, tips, etc so how would it even get taxed differently to begin with?
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Sep 22, 2020 15:33
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All this would be much easier if president Ron Paul got rid of all our income tax
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Sep 22, 2020 15:34
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TL;DR: There are two completely different ways employers can calculate the withholding of tax on bonuses. One is hard to calculate, one is dead simple. Guess which one 99% of employers use?
Andy Dufresne fucked around with this message at 15:52 on Sep 22, 2020 |
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Sep 22, 2020 15:34
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FateFree posted:All this would be much easier if president Ron Paul got rid of all our income tax
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Sep 22, 2020 15:43
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My first grown up employer would calculate our withholding on the basis of 24x paycheck = yearly income. We were mostly temporary employees working six months a year and overtime was a significant portion of our income. They never had anyone fill out the tax withholding forms. Overtime absolutely resulted in lower pay checks at time because our payroll sucked. 12k tax refund WHAT UP
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Sep 22, 2020 15:43
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FrozenVent posted:My first grown up employer would calculate our withholding on the basis of 24x paycheck = yearly income. $12k interest-free loan to the government, WHAT UP. I have friends who are thrilled at their refund amounts. I'm like "You are literally giving the IRS a loan for nothing in return"... Many of them are BWM, and would blow the money if it was in their paychecks, but guess what they do with the refund? spoiler alert: it's not saving it or paying down debts.
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Sep 22, 2020 15:52
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Oh, I did my taxes for the first time this year on my own (edit: filling out the 1040 form myself, not using software). I did use a piece of online software to help me collect all the data together then wrote the values down myself. I sent my e-check to the gov't to pay and that was that. Then I get a piece of mail telling me I hosed it up and I owe $300 more. Why are taxes so loving difficult  ? I have a pretty good understand of finance and tax laws and even I still can't get it right, even after working on it for literally hours.If the government already knows, why don't they just send me a loving bill or check and be done with it? I won't contest it, just ream me like they do every year and be done with it.
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Sep 22, 2020 15:53
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Nocheez posted:Oh, I did my taxes for the first time this year on my own (edit: filling out the 1040 form myself, not using software). I did use a piece of online software to help me collect all the data together then wrote the values down myself. I sent my e-check to the gov't to pay and that was that. Not a joke: taxes are complicated for some very good (and also not-so-good) reasons, but more importantly it's difficult because TurboTax, HR Block, et. al. lobby the government HARD to keep it that way. It's well documented, this isn't some cynical conspiracy theory. They fight tooth and nail against simplification and free government-sponsored software. Easy filing would be bad for business, so they throw millions at lawmakers to stall changes. DaveSauce fucked around with this message at 16:14 on Sep 22, 2020 |
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Sep 22, 2020 16:11
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Also some conservatives want taxes to be as miserable an experience as possible.
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Sep 22, 2020 16:12
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https://www.turbotaxsucksass.comhttps://www.turbotaxsucksass.com posted:Why are my taxes so annoying?
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Sep 22, 2020 16:19
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Soylent Pudding posted:Also some conservatives want taxes to be as miserable an experience as possible. That's the opposite of what is true
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Sep 22, 2020 16:20
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Moneyball posted:That's the opposite of what is true Why do you say that? Seems right to me. Make taxes miserable and keep people mad about having to file them and run on a platform of eliminating taxes. Similar to underfunding departments and staffing it with idiots at best and persons actively against the department at worst and then saying that the department doesn't work and should be eliminated or privatized.
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Sep 22, 2020 16:27
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Moneyball posted:That's the opposite of what is true Cynical: it's a strategy. If you make paying taxes miserable and annoying, you'll garner more support for doing away with taxes. More cynical: complicating taxes benefit the rich because it creates loopholes, which they can pay professionals to find and exploit. Back when the IRS was actually trying to go after the mega-wealthy tax cheats, the schemes were so complex that seasoned IRS enforcement experts took a while to even figure out what was being done. edit: of course this complexity, combined with using the courts to stall enforcement, gave the mega-wealthy the time needed to lobby enough lawmakers to shut down the group at the IRS that was going after these "whales." DaveSauce fucked around with this message at 16:31 on Sep 22, 2020 |
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Sep 22, 2020 16:27
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Moneyball posted:That's the opposite of what is true No? Making tax filing a huge burden to justify tax cuts is part and parcel of the break government to prove government doesn't work strategy.
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Sep 22, 2020 16:27
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For the vast majority of people who just get a W-2, filling out the form is very simple. If you don't file online, the process of submitting your taxes, paying, determining your deductions, waiting to confirm if it was right, making corrections, and understanding terminology in the letters you get can be overwhelming.
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Sep 22, 2020 16:34
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The 2017 tax law changes largely simplified things by lowering the rates but also making it so fewer people could take deductions on things like mortgage interest on extremely expensive houses and the SALT deduction. Same with corporate taxes, it lowered the rate from 35% to 21% but also closed some loopholes.
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Sep 22, 2020 16:35
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Moneyball posted:That's the opposite of what is true Grover Norquist, the guy with the famous anti-tax pledge who said he wanted to make government small enough to "drown in a bathtub," has regularly partnered with Intuit, H&R Block, and other tax preparers to oppose return-free and simplified filing. https://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing quote:Some conservative activists have sided with Intuit.
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Sep 22, 2020 16:46
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crazypeltast52 posted:This is true, but just looking at a W-2 should dispel this as it all shows up on the W-2 as wages, tips, etc so how would it even get taxed differently to begin with? This is a good point. But I still think that even in the case of filling out the forms, it is possible to complete the forms without making that realization. It definitely is possible to complete the forms without understanding tax brackets.
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Sep 22, 2020 16:55
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crazypeltast52 posted:Bonuses have a flat withholding rate, it gets actually taxed as earned income like the rest of your paycheck when you file your taxes, but withholding vs actual taxes is something people will learn when they figure out marginal tax rates. I have never learned this and never will!
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Sep 22, 2020 18:22
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Krispy Wafer posted:Are we talking about bonuses that are included on your check or in a separate disbursement? I'll admit I haven't really paid attention to Trump tax act, which is apparently where the 22% rate comes from. I'm used to the tax being in the 40% range. it doesn't matter! they're all still ordinary income! the tax policy and your tax obligations are exactly the same either way!
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Sep 22, 2020 19:32
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No matter how many times the terms "withholding", "progressive tax brackets", and "marginal rate" are explained to people they just refuse to internalize these rather simple concepts. Outside of some special circumstance edge cases, "going up a tax bracket" will never result in a net reduction in income. If you work a normal job and don't get low-income government benefits, it is not possible for this happen. The higher tax rate only applies to dollars earned in that bracket, not your whole income. Bonuses are ordinary W2 income. They may be withheld at different rates from your normal paycheck to cover estimated taxes due. Different payroll systems attempt to estimate this differently, but it's just an estimate. Whatever the difference between your tax withholdings and your actual tax liability at the end of the year will be reconciled and you will either owe more or get some back. Period. No amount of withholding games or whatever will change this. If anything, under-withholding can result in penalties, costing you more at tax time. Doesn't help that the tax prep industry and the Grover Norquist tax pledge zealots intentionally muddy the waters for political gain, either. Guinness fucked around with this message at 19:51 on Sep 22, 2020 |
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Sep 22, 2020 19:36
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I dunno, there are plenty people using ACA now that would get their subsidies demolished if they accidentally earned too much. I don't think it's right to say that it's only edge cases anymore, although it used to be. It's definitely something that you should take into consideration if you're getting close to 400% of poverty level income.
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Sep 22, 2020 19:55
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KYOON GRIFFEY JR posted:it doesn't matter! they're all still ordinary income! the tax policy and your tax obligations are exactly the same either way! I'm right there with you slapping my head at how easily this is being missed even over one page of this thread...over and over again. There's no bonus tax. There's no special tax on overtime. If you make more money and go in to a higher bracket, all of the money you make does not suddenly get taxed at that higher rate. You shouldn't be happy about getting a giant refund from the IRS each year. And so on. How regular income is taxed is actually pretty simple in this country. Where taxes get complicated involves all the hosed up ways there are to try and get around them, thanks to lawmakers over the years throwing exceptions around left and right and trying to create policy and dictate behavior through tax cuts, increases, credits, and so on. It's a giant loving mess of tax code as a result. The huge (and I do mean Huuuugggggeee) irony of that is that big orange-faced fuckball in the white house actually, honest to God, made that all a shitload simpler, though perhaps not always better, for a huge swath of taxpayers by raising the standard deduction limits. For people who don't have deductions that go over it, none of the complex tax code matters for poo poo any longer.
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Sep 22, 2020 21:48
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Ixian posted:I'm right there with you slapping my head at how easily this is being missed even over one page of this thread...over and over again. No, everyone here in bfc gets it, they are ju ssd t imprecise in their wording because 
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Sep 22, 2020 21:51
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Space Gopher posted:They don't; it's just a flat withholding of 22%. Bonuses end up calculated as ordinary income at tax time, and for most people, it means a slightly larger refund. If you make over six figures in non-bonus taxable income, you might end up needing to kick in a few more dollars to true everything up. When I worked in sales I used to LOVE tax time because the base commission bonus for each month would be 900 bucks if you hit your goals, and the company withheld at like 35 percent instead of 22. I dunno if that’s an NY/NYC/2011 thing, but since I was pulling in 1100-1300 dollar bonus checks most months that extra withholding added up quick. Yes I know it’s an interest free loan to the government but having that giant refund check hit was the best thing in the world when I was 23. Not knowing about the massive withholding on bonus checks was the worst thing ever on my first one, though, I thought there had been a huge error and basically shat my pants. That’s something they didn’t cover at orientation!
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Sep 22, 2020 21:56
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I usually only got a big yearly bonus at my last job and it was definitely withheld at the highest rate, but that was like an extra 3 or 4 paychecks in one.
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Sep 22, 2020 21:59
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quote:61 percent of Americans are dreading the holidays due to increased spending, with 57 percent of respondents having angst over Christmas specifically.
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Sep 22, 2020 23:10
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moana posted:I dunno, there are plenty people using ACA now that would get their subsidies demolished if they accidentally earned too much. I don't think it's right to say that it's only edge cases anymore, although it used to be. It's definitely something that you should take into consideration if you're getting close to 400% of poverty level income. True, but that's due to a tiered welfare system vs a progressive tax system. If welfare worked more like taxes with the exact same setup just a regressive scale it'd maybe have something like every percentage earned over the limit would reduce the welfare received by a percentage until you reached zero benefits. The scale would be set where you never decrease welfare more than you're increasing income, so there's never a net loss just diminishing returns. The example isn't quite one to one since we have standard deductions which everyone gets but not UBI, which I think would be the rough equivalent of deductions in this thought exercise.
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Sep 22, 2020 23:31
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Know how I handle Christmas.... By loving planning for it. Each year Christmas shows up at the exact same time. The only 'debt' I get into is paying with my discover card on amazon to get 5% back.
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Sep 22, 2020 23:32
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https://twitter.com/akbarjenkins/status/1308174056806649857?s=19
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Sep 22, 2020 23:47
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Easy solution, just don't buy any loving gifts. After the first few years no one cares and the generous "I want to flex on this person" people will still buy you gifts so you can gush about how grateful you are when you don't buy them anything.
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Sep 22, 2020 23:47
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Isn’t this entire thread a counterexample to this?
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Sep 22, 2020 23:50
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What is this from? Capitalism is a disease. tater_salad posted:Know how I handle Christmas.... 
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Sep 23, 2020 00:00
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If only poor people had "Calendars" they would know what day to spend their non-existent savings on gifts that society & peer pressure force them into giving
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Sep 23, 2020 00:01
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GoGoGadgetChris posted:If only poor people had "Calendars" they would know what day to spend their non-existent savings on gifts that society & peer pressure force them into giving That's why Catholics invented the Advent calendar, for delicious chocolate and delicious fiscal responsibility. And St Nick brings oranges to prevent scurvy.
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Sep 23, 2020 00:05
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