OT - NO POLITICS Happy Holidays Edition

[Gee Wally]

 

[Donnie Shulzhoffer]

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Which movie is that?

 

[Gee Wally]

Which movie is that?

TV series Ray Donovan.

 

[Ladyfan]

Tomorow is my Mom's birthday. She would have been 101.

It is also Winter Solstice.

 

[sooshii]

I’m out!

 

[Ludwig Fell Down]

I’m out!
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Congrats Sue!

 

[Morris Wanchuk]

I'm Canadian, which was part of my curiousity - what you guys might look at, income tax wise, for a payout of that nature

Between this and my next pay with my "normal" bonus, I will pay over 55 thousand dollars in tax and it .....is disheartening to say the least, lol

I am very socialist in nature - in other words, I am fine to pay my share - even more than my share - for things like our healthcare model - but losing more than half and paying more in tax than some of my fellow citizens earn in a year is really gnawing at me as I continue to inch towards retirement in ten years-ish

Withholdings for Bonus' are weird in the USA, usually they hit you with 22% federal and the highest state bracket (0%-9% depending on where you love). BUT you won't necessarily pay that much in taxes until you file taxes.

A lot of people complain about this but don't really understand that they might get some back when they file as you could end up in the 12% federal bracket.

We also pay 6.25% social Security up to $168k and 1.45% on for Medicare on all earnings

I am in the 22% tax bracket anyways but I will get some of the state bonus money back in April.

Also the USA has a different tax brackets for married couples, also the first $29k income is tax free, and you get $2000 tax credit per kid. Finally you can max out your retirement contribution at $23k and not pay any taxes on that or $7k to a health saving account.

 

[LouJersey]

Withholdings for Bonus' are weird in the USA, usually they hit you with 22% federal and the highest state bracket (0%-9% depending on where you love). BUT you won't necessarily pay that much in taxes until you file taxes.

A lot of people complain about this but don't really understand that they might get some back when they file as you could end up in the 12% federal bracket.

We also pay 6.25% social Security up to $168k and 1.45% on for Medicare on all earnings

I am in the 22% tax bracket anyways but I will get some of the state bonus money back in April.

My bonus was taxed and 401k came out as well and was 51% less than the sticker price. Generally they put it through as gift or reimbursement and it's never touched, but have a new CEO and people are livid. They haven't done it that way for 50 years. I have any been here three, but I will get that back and more after my review in January.

 

[NeelyDan]

So you guys get taxed pretty hard too

 

[jgatie]

So you guys get taxed pretty hard too

They don't call it Taxachusetts for nothing.

 

[Morris Wanchuk]

My bonus was taxed and 401k came out as well and was 51% less than the sticker price. Generally they put it through as gift or reimbursement and it's never touched, but have a new CEO and people are livid. They haven't done it that way for 50 years. I have any been here three, but I will get that back and more after my review in January.

Applying 401k to a bonus can open up a can of worms for people who had their 401ks to be maxed out of the course of the year.

I know where I work, I wanted to front load my 401k but i would lose out on the company match which would have to be paid out over the year. So I max it out on the last paycheck, but none from the bonus $

 

[McGarnagle]

Highest federal tax is 37%. Mass state tax is 5% + 4% for anything over $1 million. Assuming total income not over $1 million, taxes on 28,000 would be $11,760.

Note: This is what you would pay in taxes, not counting any credits or deductions. The withholdings on the actual check are a completely different matter. Those depend on what you declare, i.e. dependents, marital status, etc. Two people with the exact same check and the exact same tax bracket would have two very difference net amount on that check.

Plus FICA taxes at 7.65%.

I'm a certified payroll guy, and agree with your post. Filling status and other adjustments affect everything to the point where everyone's checks are going to wind up different. Single and no dependents, they'll take as much as they can. Married jointly with four kids, you're probably not getting federal or state withheld (but FICA always comes out). If you put 30% of your check into your 401k, you only get taxed on the other 70% up front. Medical or FSA plans also get pretax status, but imputed income from other fringe benefits could raise your taxable wage base even if you're not getting the equivalent amount of money. Then your actual tax return in April has many things that could adjust the amount owed, such as interest paid on student loans, homeowner credits, other capital gains or losses, business adjustments, etc.

It's all a game really. The rich have access to the good accountants who know how to make the sneaky adjustments and get more credited back to them, the poor don't and have to pay sticker price.

 

[Morris Wanchuk]

Highest federal tax is 37%. Mass state tax is 5% + 4% for anything over $1 million. Assuming total income not over $1 million, taxes on 28,000 would be $11,760.

Note: This is what you would pay in taxes, not counting any credits or deductions. The withholdings on the actual check are a completely different matter. Those depend on what you declare, i.e. dependents, marital status, etc. Two people with the exact same check and the exact same tax bracket would have two very difference net amount on that check.

Agreed,

I have two kids, a good income, and and non-working spouse which appears to be the tax codes dream for credits/deductions. I can even max out a spousal IRA on her behalf because she doesnt have earned income.

I think we did the math and she would have to make close to $100k to offset all the added taxes and child care costs we would add back in.

Plus FICA taxes at 7.65%.

I'm a certified payroll guy, and agree with your post. Filling status and other adjustments affect everything to the point where everyone's checks are going to wind up different. Single and no dependents, they'll take as much as they can. Married jointly with four kids, you're probably not getting federal or state withheld (but FICA always comes out). If you put 30% of your check into your 401k, you only get taxed on the other 70% up front. Medical or FSA plans also get pretax status, but imputed income from other fringe benefits could raise your taxable wage base even if you're not getting the equivalent amount of money. Then your actual tax return in April has many things that could adjust the amount owed, such as interest paid on student loans, homeowner credits, other capital gains or losses, business adjustments, etc.

It's all a game really. The rich have access to the good accountants who know how to make the sneaky adjustments and get more credited back to them, the poor don't and have to pay sticker price.

One thing that always felt icky to me is how maxing out your 401k is easier as you make more money, and you get a larger benefit from it. If someone is in the 12% bracket and saves a ton, they get less of a reward.

I think I saw somewhere to change is to a tax credit about how much you saved which would be more fair.

 

[jgatie]

Plus FICA taxes at 7.65%.

 

[Alicat]

Uncle Sam took over half of my bonus this year between the feds and state.

The good news is I got a 2% raise in base salary and they increased my bonus 5% ( i can't do math lol) for next year plus ate the heath insurance premium increase.

 

[Smitty93]

I'm Canadian, which was part of my curiousity - what you guys might look at, income tax wise, for a payout of that nature

Between this and my next pay with my "normal" bonus, I will pay over 55 thousand dollars in tax and it .....is disheartening to say the least, lol

I am very socialist in nature - in other words, I am fine to pay my share - even more than my share - for things like our healthcare model - but losing more than half and paying more in tax than some of my fellow citizens earn in a year is really gnawing at me as I continue to inch towards retirement in ten years-ish

As someone who's also in a comfortable financial position, I try to remember how fortunate I am and that comparison is the thief of joy (as difficult as that may be at times)

 

[TD Charlie]

You guys get paid?

 

[Alicat]

You guys get paid?

I did today and then had to pay rent and bills I used my bonus money to fund my trip to Boston in the spring and buy a case of my favorite wine that I can't get here. Adulting is hard.

 

[McGarnagle]

Agreed,

I have two kids, a good income, and and non-working spouse which appears to be the tax codes dream for credits/deductions. I can even max out a spousal IRA on her behalf because she doesnt have earned income.

I think we did the math and she would have to make close to $100k to offset all the added taxes and child care costs we would add back in.


One thing that always felt icky to me is how maxing out your 401k is easier as you make more money, and you get a larger benefit from it. If someone is in the 12% bracket and saves a ton, they get less of a reward.

I think I saw somewhere to change is to a tax credit about how much you saved which would be more fair.

The only people who I see actually hit the $23,000 ($30,500 catchup if over 50) are the ones who don't need it. Execs who make so much that the total retirement account balance is chump change anyway at the current deferral limits. Meanwhile the guy making $18 an hour whose life would be positively changed by having a retirement account can't afford to give up 6% a check because he needs to pay rent and then calls to complain he never signed up for it when autoenrollment is clearly explained and laid out in onboarding. So they don't participate and then we fail annual ADP/ACP testing and have to refund the execs for excessive contributions in the end anyway.

 

[NeelyDan]

As someone who's also in a comfortable financial position, I try to remember how fortunate I am and that comparison is the thief of joy (as difficult as that may be at times)

this actually really hit me reading it, thanks mate

 

[Alicat]

The only people who I see actually hit the $23,000 ($30,500 catchup if over 50) are the ones who don't need it. Execs who make so much that the total retirement account balance is chump change anyway at the current deferral limits. Meanwhile the guy making $18 an hour whose life would be positively changed by having a retirement account can't afford to give up 6% a check because he needs to pay rent and then calls to complain he never signed up for it when autoenrollment is clearly explained and laid out in onboarding. So they don't participate and then we fail annual ADP/ACT testing and have to refund the execs for excessive contributions in the end anyway.

Those are my favorite people. I just point them to the benefits site or tell them to email benefits.

Every now and again we would get calls from people essentially asking us to commit fraud when it comes to their bonus. Those get sent right over to payroll.

 

[Ladyfan]

I’m out!
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Congrats Susan!!

 

[Morris Wanchuk]

The only people who I see actually hit the $23,000 ($30,500 catchup if over 50) are the ones who don't need it. Execs who make so much that the total retirement account balance is chump change anyway at the current deferral limits. Meanwhile the guy making $18 an hour whose life would be positively changed by having a retirement account can't afford to give up 6% a check because he needs to pay rent and then calls to complain he never signed up for it when autoenrollment is clearly explained and laid out in onboarding. So they don't participate and then we fail annual ADP/ACP testing and have to refund the execs for excessive contributions in the end anyway.

Ha! I had a long and interesting discussion with our payroll folks about Mega Back door roths. We nerded out for a bit but basically this was their answer as to why its not worth it to offer that + in service withdrawals.

 

[Shaun]

in california our bonuses go to one guys tab at french laundry

 

[TD Charlie]

Southcoast drivers remain undefeated in the “least competent behind the wheel” contest.

4 miles. 45 minutes.