Company Benefits
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@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I'm not sure if your serious but...
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@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I tell the accountants to mark me exempt for the week. You can change your status a few times a year without causing issues.
At a prior job (and before I was married with kids) I would calculate my yearly income taxes out and then change payroll in november to exempt once I knew I had met my expected pay in.
Why stop there! Set it to exempt for the whole year!
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@john-nicholson said in Company Benefits:
@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I tell the accountants to mark me exempt for the week. You can change your status a few times a year without causing issues.
At a prior job (and before I was married with kids) I would calculate my yearly income taxes out and then change payroll in november to exempt once I knew I had met my expected pay in.
Why stop there! Set it to exempt for the whole year!
I balanced it out for a close to net 0 federal income tax return.
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@john-nicholson said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I'm not sure if your serious but...
...then I would tell you your wrong, way, way wrong!
about 3.5x more CA and FITW taxes taken out, than on a regular income check that's even more than the bonus.
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@tim_g said in Company Benefits:
@john-nicholson said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I'm not sure if your serious but...
...then I would tell you your wrong, way, way wrong!
about 3.5x more CA and FITW taxes taken out, than on a regular income check that's even more than the bonus.
You are wrong. It is all the same in the end.
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Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
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@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@john-nicholson said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I'm not sure if your serious but...
...then I would tell you your wrong, way, way wrong!
about 3.5x more CA and FITW taxes taken out, than on a regular income check that's even more than the bonus.
You are wrong. It is all the same in the end.
You'll have to explain, because the numbers I'm actually seeing for real are not as you say.
The amount of CA and FITW taxes taken out of a bonus check is about 3.5 times higher than the CA and FITW taxes taken out of a regular paycheck that's more.
Example:
I give you $5 and take $3 back. (bonus)
I give you $8 and tak $1 back. (regular pay)That couldn't be any further from the being the same thing.
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@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
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@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@john-nicholson said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
The owner pays out bonuses to all the employees twice yearly, but it is simply profit sharing.
Basically he keeps cash banked to handle XX months of payroll. Then as long as we have that he pays out the overage as a bonus to us based on full time / part time and how long we been here.
Yeah, and bonuses get taxed like crazy. If you get a 5k bonus, you get less than half of it in your pocket.
I'm not sure if your serious but...
...then I would tell you your wrong, way, way wrong!
about 3.5x more CA and FITW taxes taken out, than on a regular income check that's even more than the bonus.
You are wrong. It is all the same in the end.
You'll have to explain, because the numbers I'm actually seeing for real are not as you say.
The amount of CA and FITW taxes taken out of a bonus check is about 3.5 times higher than the CA and FITW taxes taken out of a regular paycheck that's more.
Example:
I give you $5 and take $3 back. (bonus)
I give you $8 and tak $1 back. (regular pay)That couldn't be any further from the being the same thing.
The amount of federal, state, local, and FICA, etc taxes that you owe are a fixed amount based on your total income (less deductions) at the end of the year. What does it matter if you over pay one week? It will be brought back when your returns are calculated. This is why you get a refund (or not) based on what you paid in.
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@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
Not relevant is the point. You still owe taxes based on the total when it is all said and done.
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@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year.
I'm talking about what you get in your pocket then and there.
Oh, that's just because it shows up as salary in that paycheck so appears like you are at a higher rate so you get taxed at that rate. If your normal rate was raised that much, you'd be taxed the same.
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@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
Not relevant is the point. You still owe taxes based on the total when it is all said and done.
It is relevant when I get paid, because I make sure my deductions are set so that I don't have to pay anything and so I get a little back. I don't need them "shorting" me on a bonus then, to give it back later. I'm already putting money in savings, 401k, etc... I don't need an "extra" holding when I get a bonus.
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Everything I get back from tax returns just goes into savings anyways... so when I get a bonus, I want it to actually be a bonus. Not a tiny savey save, complements of the government.
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@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
Not relevant is the point. You still owe taxes based on the total when it is all said and done.
It is relevant when I get paid, because I make sure my deductions are set so that I don't have to pay anything and so I get a little back. I don't need them "shorting" me on a bonus then, to give it back later. I'm already putting money in savings, 401k, etc... I don't need an "extra" holding when I get a bonus.
Only so relevant as you can modify that individual paycheck to not do that. That's at your discretion. The taxes don't change, only the deductions do and those are at your discretion. If you chose to do it differently, you'd see more money coming to you rather than less. But it would all be the same once it switches from deductions to taxes.
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@tim_g said in Company Benefits:
Everything I get back from tax returns just goes into savings anyways... so when I get a bonus, I want it to actually be a bonus. Not a tiny savey save, complements of the government.
That's fine, but that is all how you treat those different paths of the money. It's not the money changing but how you react to it.
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@scottalanmiller said in Company Benefits:
I REALLY dislike bonuses. Those are not a benefit. That's a trojan horse benefit, looks nice on the surface but in reality is just a way to lower employee pay through trickery.
I also don't like bonuses. We have quarterly bonuses here and I would much rather get the total of salary plus bonus, each time I get paid (as an actual salary). On top of that, the bonus is taxed more heavily (initially) in CA, so it is about half the gross each time
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@wrx7m said in Company Benefits:
@scottalanmiller said in Company Benefits:
I REALLY dislike bonuses. Those are not a benefit. That's a trojan horse benefit, looks nice on the surface but in reality is just a way to lower employee pay through trickery.
I also don't like bonuses. We have quarterly bonuses here and I would much rather get the total of salary plus bonus, each time I get paid (as an actual bonus). On top of that, the bonus is taxed more heavily (initially) in CA, so it is about half the gross each time
You can control that to adjust for the tax rate.
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@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
It's different in that they have different schedules for the recommended amount for an employer to withold for you (Top Marginal, vs. something arbitrary like 25%),
It's not different at the end of the tax year (as you are talking about) that it gets piled under all under wages, Tips and Other Comp (Box 1).
We are not arguing that they withhold more by default in your state, we are arguing that at the end filing your taxes you would owe the exact same amount of money, and have the same in your bank account no matter if you made 50K base and bonus 50K, or you made 100K base.
Now I will point out that there is variable compensation that a company can give you that has variable tax implications. If I hold onto my RSU's for 1-year past vestment then I'm going to end up paying less (much less!). This is why executives get paid in millions in stock, and maybe only 500K in cash. This is why honestly I'd be OK if I never got another raise and they just kept giving me more large budgets of stock (but hell I'll take both).
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@scottalanmiller said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
Not relevant is the point. You still owe taxes based on the total when it is all said and done.
It is relevant when I get paid, because I make sure my deductions are set so that I don't have to pay anything and so I get a little back. I don't need them "shorting" me on a bonus then, to give it back later. I'm already putting money in savings, 401k, etc... I don't need an "extra" holding when I get a bonus.
Only so relevant as you can modify that individual paycheck to not do that. That's at your discretion. The taxes don't change, only the deductions do and those are at your discretion. If you chose to do it differently, you'd see more money coming to you rather than less. But it would all be the same once it switches from deductions to taxes.
Technically you only control the federal taxes withholding. There is variability on the up for Medicare because my joint filing is too high (If you don't drop your tax liability at a point you run the risk of paying a penalty extra rate on my marginal for Medicare) and on the down for social security (I've stopped paying it for the year as I've hit the $7,886.40 maximum the government will withhold for the year). Kinda nice getting a big spike on your paycheck part way through the year.
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@john-nicholson said in Company Benefits:
@scottalanmiller said in Company Benefits:
@tim_g said in Company Benefits:
@jaredbusch said in Company Benefits:
@tim_g said in Company Benefits:
@scottalanmiller said in Company Benefits:
Bonuses aren't even a real thing to the IRS, it's literally just part of your pay. At least that's how it has always been where I have gotten bonuses. It's just a paycheck with a larger amount in it that normal, the IRS doesn't have a "this is a bonus" checkbox to even know that it is a bonus to be taxed differently. At the end of the year, your bonus is just part of your pay, it can't be taxed differently because there is nowhere for it to show up.
Yeah I get that, it's all just "income", and you get taxed on it all just the same at the end of the year. And if they take too much, you get more back.
I'm talking about what you get in your pocket then and there.
Not relevant is the point. You still owe taxes based on the total when it is all said and done.
It is relevant when I get paid, because I make sure my deductions are set so that I don't have to pay anything and so I get a little back. I don't need them "shorting" me on a bonus then, to give it back later. I'm already putting money in savings, 401k, etc... I don't need an "extra" holding when I get a bonus.
Only so relevant as you can modify that individual paycheck to not do that. That's at your discretion. The taxes don't change, only the deductions do and those are at your discretion. If you chose to do it differently, you'd see more money coming to you rather than less. But it would all be the same once it switches from deductions to taxes.
Technically you only control the federal taxes withholding. There is variability on the up for Medicare because my joint filing is too high (If I don't drop my tax liability I run the risk of paying a penalty extra rate on my marginal for Medicare) and on the down for social security (I've stopped paying it for the year as I've hit the $7,886.40 maximum the government will withhold for the year). Kinda nice getting a big spike on your paycheck part way through the year.
Texas. No state taxes
