Archive

Taxes on Bonuses...Holy Crap!

  • majorspark
    LJ wrote:
    Little Danny wrote: I always say if taxes were not deducted from your paycheck and Americans had to write a check to the govt to pay the tax bill, everyone (including the bleeding hearts) would be rioting in the streets.
    I do this every 3 months, so.... false
    Most Americans do not have to file quarterly returns. Nor do they get the joy of paying the other half of their payroll taxes. Just because you and I do it does not mean others would. Paying my taxes in this manner, has made me a little more critical of how government funds are used.

    I would speculate that a sizable number of Americans would spend the money and not lay it aside. When tax time comes they would be short. Guess who they blame.
  • HitsRus
    LJ wrote:
    Little Danny wrote: I always say if taxes were not deducted from your paycheck and Americans had to write a check to the govt to pay the tax bill, everyone (including the bleeding hearts) would be rioting in the streets.
    I do this every 3 months, so.... false
    so...not necessarily. I posted something similar last page, and I firmly believe that most Americans would have a cow if they had to write a quarterly check in the thousands. Just because you cheerfully pay your tax or your tax is so low that you think "What a deal!" doesn't disprove the statement.
  • LJ
    HitsRus wrote:
    LJ wrote:
    Little Danny wrote: I always say if taxes were not deducted from your paycheck and Americans had to write a check to the govt to pay the tax bill, everyone (including the bleeding hearts) would be rioting in the streets.
    I do this every 3 months, so.... false
    so...not necessarily. I posted something similar last page, and I firmly believe that most Americans would have a cow if they had to write a quarterly check in the thousands. Just because you cheerfully pay your tax or your tax is so low that you think "What a deal!" doesn't disprove the statement.
    He said "everyone". Thousands of people do it yearly, and while we bitch (june sucks, property tax and quarterly tax) not everyone "riots in the streets".
  • Little Danny
    Alright so I said "everyone". You are right that is false. However, you can't deny there be a far further outcry and resistance to pay additional taxes from most Americans in this scenario.
  • LJ
    Little Danny wrote: Alright so I said "everyone". You are right that is false. However, you can't deny there be a far further outcry and resistance to pay additional taxes from most Americans in this scenario.
    How would paying your whole tax liability in 1 payment or 4 equal payments be additional taxes? I'd say a good amount of people would be cool with 1 payment at the end of the year as they would be able to earn interest on the money and pay the exact amount without the gov't holding any of it.
  • Little Danny
    What I am saying is that if most Americans did not have their taxes taken out of their paycheck on a weekly or bi-weekly basis, and they had to pay them directly out of pocket on their own, they will be hell to pay come time for a proposed tax increase.
  • LJ
    Little Danny wrote: What I am saying is that if most Americans did not have their taxes taken out of their paycheck on a weekly or bi-weekly basis, and they had to pay them directly out of pocket on their own, they will be hell to pay come time for a proposed tax increase.
    This is the first time you have said anything about a tax increase.
  • Little Danny
    Oh?
    Little Danny wrote: Alright so I said "everyone". You are right that is false. However, you can't deny there be a far further outcry and resistance to pay additional taxes from most Americans in this scenario.
  • LJ
    Little Danny wrote: Oh?
    Little Danny wrote: Alright so I said "everyone". You are right that is false. However, you can't deny there be a far further outcry and resistance to pay additional taxes from most Americans in this scenario.
    That wasn't the scenario, but whatever.
    I always say if taxes were not deducted from your paycheck and Americans had to write a check to the govt to pay the tax bill, everyone (including the bleeding hearts) would be rioting in the streets.
  • Sonofanump
    I wish election day was April 16th. I think it might make a small difference on not electing tax and spend politicians.
  • BoatShoes
    Sonofanump wrote: I wish election day was April 16th. I think it might make a small difference on not electing tax and spend politicians.
    Why when half of America doesn't pay any federal income tax?
  • Sonofanump
    BoatShoes wrote:
    Sonofanump wrote: I wish election day was April 16th. I think it might make a small difference on not electing tax and spend politicians.
    Why when half of America doesn't pay any federal income tax?
    Perhaps you missed the word "small" in my statement.
  • Footwedge
    jmog wrote: Well, got my bonus check for last year today...I won't go into how much because that's not important (but it was nice)...however..

    Good Lord does the government like to hit bonuses HARD.

    In the end the government got nearly half of my money. They got 47% and out of the goodness of their hearts let me keep 53%.

    Come to think of it, I take that back, make it 48/52 because at the end of the year I'll owe the city I live in 1% of it (their city tax is 2%, place where I work is 1%, so I have to pay the difference).
    This makes no sense at all. None. I understand that the bonus tax pay period is taxed as if you made that type of money every month. But the maximum tax bracket is around 37%.

    What constitutes the other 9%? Even if you add in the payroll tax (7.15%), you still don't hit 47%.

    And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?

    Something smells like rotten fish on this one.
  • Footwedge
    Sonofanump wrote: I wish election day was April 16th. I think it might make a small difference on not electing tax and spend politicians.
    What difference would that make? Are you inferering that somehow electing a different party would change anything?
  • LJ
    Footwedge wrote:
    jmog wrote: Well, got my bonus check for last year today...I won't go into how much because that's not important (but it was nice)...however..

    Good Lord does the government like to hit bonuses HARD.

    In the end the government got nearly half of my money. They got 47% and out of the goodness of their hearts let me keep 53%.

    Come to think of it, I take that back, make it 48/52 because at the end of the year I'll owe the city I live in 1% of it (their city tax is 2%, place where I work is 1%, so I have to pay the difference).
    This makes no sense at all. None. I understand that the bonus tax pay period is taxed as if you made that type of money every month. But the maximum tax bracket is around 37%.

    What constitutes the other 9%? Even if you add in the payroll tax (7.15%), you still don't hit 47%.

    And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?

    Something smells like rotten fish on this one.
    state tax, city tax, payroll tax.
  • BoatShoes
    Footwedge wrote:
    jmog wrote: Well, got my bonus check for last year today...I won't go into how much because that's not important (but it was nice)...however..

    Good Lord does the government like to hit bonuses HARD.

    In the end the government got nearly half of my money. They got 47% and out of the goodness of their hearts let me keep 53%.

    Come to think of it, I take that back, make it 48/52 because at the end of the year I'll owe the city I live in 1% of it (their city tax is 2%, place where I work is 1%, so I have to pay the difference).
    This makes no sense at all. None. I understand that the bonus tax pay period is taxed as if you made that type of money every month. But the maximum tax bracket is around 37%.

    What constitutes the other 9%? Even if you add in the payroll tax (7.15%), you still don't hit 47%.

    And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?

    Something smells like rotten fish on this one.
    Oh dear Footie, why must you always challenge these types of claims on here? Who cares if it's a complete fabrication? (not saying it is Jmog) Isn't the principle of the matter a more interesting discussion than Jmog's personal finances?
  • LJ
    also the IRS cut the requirement to explain more than 10 exemptions a few years ago.
  • Footwedge
    BoatShoes wrote:
    Oh dear Footie, why must you always challenge these types of claims on here? Who cares if it's a complete fabrication? (not saying it is Jmog) Isn't the principle of the matter a more interesting discussion than Jmog's personal finances?


    ^^^because that's what I do. :D. If one wants to present an argument and open up the forum for discussion and debate, then why exxagerate the claim?

    People here are ready at the hip in calling me out whenever I state something irrational. I'm just getting a little revenge here....that's all. :D
  • Footwedge
    LJ wrote:
    Footwedge wrote:
    jmog wrote: Well, got my bonus check for last year today...I won't go into how much because that's not important (but it was nice)...however..

    Good Lord does the government like to hit bonuses HARD.

    In the end the government got nearly half of my money. They got 47% and out of the goodness of their hearts let me keep 53%.

    Come to think of it, I take that back, make it 48/52 because at the end of the year I'll owe the city I live in 1% of it (their city tax is 2%, place where I work is 1%, so I have to pay the difference).
    This makes no sense at all. None. I understand that the bonus tax pay period is taxed as if you made that type of money every month. But the maximum tax bracket is around 37%.

    What constitutes the other 9%? Even if you add in the payroll tax (7.15%), you still don't hit 47%.

    And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?

    Something smells like rotten fish on this one.
    state tax, city tax, payroll tax.


    Jmog said "the government". When one says "the government" most people would equate that to Federal income tax withholdings...not the sum of all taxes. At least that's the way I would interpret it.
  • LJ
    Footwedge wrote:
    LJ wrote:
    Footwedge wrote:
    jmog wrote: Well, got my bonus check for last year today...I won't go into how much because that's not important (but it was nice)...however..

    Good Lord does the government like to hit bonuses HARD.

    In the end the government got nearly half of my money. They got 47% and out of the goodness of their hearts let me keep 53%.

    Come to think of it, I take that back, make it 48/52 because at the end of the year I'll owe the city I live in 1% of it (their city tax is 2%, place where I work is 1%, so I have to pay the difference).
    This makes no sense at all. None. I understand that the bonus tax pay period is taxed as if you made that type of money every month. But the maximum tax bracket is around 37%.

    What constitutes the other 9%? Even if you add in the payroll tax (7.15%), you still don't hit 47%.

    And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?

    Something smells like rotten fish on this one.
    state tax, city tax, payroll tax.


    Jmog said "the government". When one says "the government" most people would equate that to Federal income tax withholdings...not the sum of all taxes. At least that's the way I would interpret it.
    i do believe that the state is a government as well, but I do see where you are coming from, but having had a bonus check cut to 50% because of every tax imaginable, I just kind of knew where he was coming from.
  • majorspark
    Footwedge wrote: And you legally are claiming 12 deductions on your withholding allowances? How in the hell do you get away with that?
    Your tax return is what matters. You must have the correct number of exemptions on that. As for an employees W4, employees many times claim less exemptions on them in order to receive a higher return. Sometimes an employee will get married and have a baby and never adjust their W4. Employers are not required to furnish the IRS with an employee's W4. As LJ said their used to be a requirement if someone claimed alot of exemptions (10 or more). Or they claimed exemption of federal withholding.

    Employees do not sign the W4 nor is their any statement of a penalty of perjury. So yes you can claim more and you can claim less.
  • Manhattan Buckeye
    I don't work for a payroll company, nor am I familiar with their operations...I do know the federal income tax maxes out at about 35%, our state tax maxes out at just under 6%, and FICA maxes out at just under 8% assuming you are early in your pay periods.

    If you get a bonus early in the fiscal year, my guess is that the service handling payroll takes out the maximum if the funds per pay period exceed a certain threshold, and most certainly a one time bonus payment exceeds said threshold.

    Unless you claim a ton of deductions and it is recognized by your payroll provider, a bonus of any sort of magnitude is going to be withheld heavily.
  • IggyPride00
    I do know the federal income tax maxes out at about 35%
    At the turn of the year that will be 39.6% and probably higher (if Democrats keep Congress) once the Bush tax cuts expire. Congress would have to pass a law to keep them from reverting back to pre-Bush levels, and BHO will never sign such a law to avoid that happening on the eeeevil rich whether Republicans take back Congress or not.
  • Ghmothwdwhso
    majorspark wrote:
    BoatShoes wrote: It would be interesting if you could make a case for the IRS to have to be required to compensate for the time value of money and pay interest for the money it with holds until it is refunded. But on the other hand, suppose the Feds withold too little as a down payment of tax and one ends up having to pay taxes by April 15th, should we understand it as an interest free loan from the feds all year and argue that taxpayers pay interest on this amount?
    No, because the due date for payment of any tax owed per tax year is April 15th. As long as you pay by the due date an individual has met his obligations to the feds. By having federal tax withheld, you are allowing the federal government to save your money in their account for future payment of any tax owed and they pay you no interest.

    I prefer to invest or save mine. I don't try to break even. I give them bastards as little as possible until it is due. On April 15th (not a day earlier) I write the government a sizable check with profanity laced words crossing my lips with each pen stroke.
    After all, it was your money. Great post. So many people don't think that way.
  • BoatShoes
    Ghmothwdwhso wrote: After all, it was your money. Great post. So many people don't think that way.
    Well technically no, if he's going to have to pay it to the government on April 15th he has assigned any property claim to that money beyond that date to the Treasury through his representative in the U.S. Congress and his State's Senators. He has a present possessory interest and the Treasury has a future interest. I'm pretty sure his point that he should not owe the treasury interest though, is sound.