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Con_Alma
Posts: 12,198
Jan 6, 2011 11:02am
O=trap in the current state of things I agree but one must choose how to get paid and if you are not going to be better off with one plan or the other what makes a person choose the 26 payment plan?
I have seen someone complaining about giving the gvt an interest free loan if the overpay in taxes yet they are willing to give their employer the same thing. It's quite interesting to see how people go about managing cash flow to me.
I have seen someone complaining about giving the gvt an interest free loan if the overpay in taxes yet they are willing to give their employer the same thing. It's quite interesting to see how people go about managing cash flow to me.
M
Manhattan Buckeye
Posts: 7,566
Jan 6, 2011 11:02am
Gblock;627859 wrote:Also w coaching stipends and the larger check you end up giving uncle Sam an interest free loan in taxes on the 21 pay plan
This is also correct. For my Dad's extra-curricular days the payment was a one time deal, meaning it was withheld at a 33% (or similar) rate rather than the 15% or lesser rate. It really peeved him.
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:04am
Manhattan Buckeye;627872 wrote:Ideally yes, however some employers won't allow employees to increase their deductions other than exemptions for their spouse and dependents or on the other hand without significant evidence that the exemptions are legit. Public employers tend to restrict how much their employees can withhold.
Private employers likely don't care, as long as there is no fraud or any other hanky panky.
I'm not sure public employers can restrict you from doing so either. They might be able to give you a hard time about it but at the end of the day can an HR person dictate what your withholdings are? Isn't that tax advice that they are not qualified to provide?
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:09am
Gblock;627878 wrote:.... I find w the 26 pay plan and I claim zero I usually UBS up getting back 800-1000 bucks.....however in my earlier days I got screwed a few times and owed 2400
By getting back 800-1000 aren't you lending the gvt your money. Wasn't that a previous complaint of yours? Do you think it's better to owe at the end of the year so long as you are not paying interest and penalties?
...and finally...this is getting kind of personal so please let me know if I am going too deep with thsi question....do you have more than yourself as a true dependent? I ask because Manhattan has suggested that certain public employers would not let you claim less than you actually have and I see that you mentioned you claim 0.
Q
queencitybuckeye
Posts: 7,117
Jan 6, 2011 11:22am
Wouldn't it be financially better for the school system not to offer this choice and pay everyone on a 52-week basis?
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:24am
The payroll expense would be greater than a 21 pay plan would it not??
I know we pay our employees monthly because it's a lower expense for us.
I know we pay our employees monthly because it's a lower expense for us.
M
Manhattan Buckeye
Posts: 7,566
Jan 6, 2011 11:31am
Con_Alma;627884 wrote:I'm not sure public employers can restrict you from doing so either. They might be able to give you a hard time about it but at the end of the day can an HR person dictate what your withholdings are? Isn't that tax advice that they are not qualified to provide?
I don't know, likely the dollar difference isn't enough for any one person to make much noise. As GBlock stated, at most it is a few hundred dollars difference. I can understand the frustration and anger someone has to see too much tax withheld, but when they get it back some months later the anger and frustration tends to subside.
O-Trap
Posts: 14,994
Jan 6, 2011 11:33am
Con_Alma;627879 wrote:O=trap in the current state of things I agree but one must choose how to get paid and if you are not going to be better off with one plan or the other what makes a person choose the 26 payment plan?
I have seen someone complaining about giving the gvt an interest free loan if the overpay in taxes yet they are willing to give their employer the same thing. It's quite interesting to see how people go about managing cash flow to me.
Indeed, and I would agree that the two scenarios are similar.
Quite honestly, to me, it's a choice issue. If I am permitted to "choose" to be on a 26 payment plan, I'm okay with it. If I am permitted to "choose" to overpay my taxes, I'm okay with it.
Provided that the money is guaranteed either way, it's a perspective issue. Maybe a person knows they budget well, but wants the safety net of not getting a disproportionate (in terms of spending) amount of their yearly pay every two weeks. It all depends.
I could see using it, at least to start, as a way to gauge how I would be able to live ... in essence, putting into practice the budget. After that, I would personally move to the 21, but others, again, might like the safety net.
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Gblock
Jan 6, 2011 11:37am
Well this year It looks like I'm going to owe about 350 bucks because I got divorced may of 09. Up until June they were taxing me as if I was still married and I then claimed 0 so they would take as much as possible because at that point I would've owed probly 3000. But I actually can claim 0 because I'm single no dependents. As for next year I still need to figure out what to do. I separated from my wife in 05 and we have mostly filed jointly unless she was mad which worked out for me all but one year when I had to pay 2400. Now that I'm single again ill prolly change it to 1 for next year
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:41am
The safety from what?? What safety do you see someone receiving from a 26 pay plan vs a 21 pay plan?O-Trap;627924 wrote:... but others, again, might like the safety net.
Q
queencitybuckeye
Posts: 7,117
Jan 6, 2011 11:47am
Con_Alma;627913 wrote:The payroll expense would be greater than a 21 pay plan would it not??
I know we pay our employees monthly because it's a lower expense for us.
I was going by the assumption that if they currently pay some employees over 52, why not everyone?
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:48am
Ahhh.. Got it.
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bigkahuna
Posts: 4,454
Jan 6, 2011 11:50am
Gblock;627934 wrote:Well this year It looks like I'm going to owe about 350 bucks because I got divorced may of 09. Up until June they were taxing me as if I was still married and I then claimed 0 so they would take as much as possible because at that point I would've owed probly 3000. But I actually can claim 0 because I'm single no dependents. As for next year I still need to figure out what to do. I separated from my wife in 05 and we have mostly filed jointly unless she was mad which worked out for me all but one year when I had to pay 2400. Now that I'm single again ill prolly change it to 1 for next year
Did they tax you as married because you filled out your W-4 as such?
I know after I got married, I immediately updated mine to Married, but tax me at the higher single rate. I was afraid of getting in a situation where I had to pay back like you do. My wife did the same. My check is a little smaller than usual, but we typically get a good hunk of change back at the end of the year.
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:51am
What makes that better for you?
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Manhattan Buckeye
Posts: 7,566
Jan 6, 2011 11:54am
bigkahuna;627953 wrote:Did they tax you as married because you filled out your W-4 as such?
I know after I got married, I immediately updated mine to Married, but tax me at the higher single rate. I was afraid of getting in a situation where I had to pay back like you do. My wife did the same. My check is a little smaller than usual, but we typically get a good hunk of change back at the end of the year.
Rurh?
As long as you don't get a penalty, having to pay the tax is better than withholding and getting a fat refund.
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Con_Alma
Posts: 12,198
Jan 6, 2011 11:56am
Yeah, I don't want to sound preachy but I'm trying to see how others are coming to the conclusion that it's better not to pay.
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Gblock
Jan 6, 2011 11:58am
bigkahuna;627953 wrote:Did they tax you as married because you filled out your W-4 as such?
I know after I got married, I immediately updated mine to Married, but tax me at the higher single rate. I was afraid of getting in a situation where I had to pay back like you do. My wife did the same. My check is a little smaller than usual, but we typically get a good hunk of change back at the end of the year.
Yes I set it up that way....are you planning on breaking up?....I wasn't....the reason that happened is because I had to file as married filing separately but had planned on filing jointly. It's like a 10 percent difference in tax rate plus other credits
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Con_Alma
Posts: 12,198
Jan 6, 2011 12:00pm
How you file and what you claim on your withholding have no correlation. You are not required to file the same status as you withheld.
Q
queencitybuckeye
Posts: 7,117
Jan 6, 2011 12:01pm
Con_Alma;627958 wrote:Yeah, I don't want to sound preachy but I'm trying to see how others are coming to the conclusion that it's better not to pay.
It's amazing the "logic" people use in this area. My wife's cousin doesn't want her husband to work voluntary overtime because it puts them in a higher bracket and reduces their refund. She counts on getting that check in the spring.
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bigkahuna
Posts: 4,454
Jan 6, 2011 12:02pm
There is a smaller chance of having to pay at the end of the year and a greater chance of getting something back.
Since, I'm still being taxed at a higher single rate through the pay checks, they take more out than they need to. When I go do my taxes, the tax breaks of being married are exercised then.
The way I understand it, it works like this "Oh, we took out 10% during the year, but you're married. We should have only taken out 5%, so we will give that extra back to you."
My mom has her BA in Accounting and told me that if I took the lower married tax rate during the year, there would be a better chance of having to pay back because they didn't take out enough. By choosing to be taxed at the higher single rate, it's almost guaranteed that I'll get money back.
Since, I'm still being taxed at a higher single rate through the pay checks, they take more out than they need to. When I go do my taxes, the tax breaks of being married are exercised then.
The way I understand it, it works like this "Oh, we took out 10% during the year, but you're married. We should have only taken out 5%, so we will give that extra back to you."
My mom has her BA in Accounting and told me that if I took the lower married tax rate during the year, there would be a better chance of having to pay back because they didn't take out enough. By choosing to be taxed at the higher single rate, it's almost guaranteed that I'll get money back.
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Con_Alma
Posts: 12,198
Jan 6, 2011 12:03pm
queencitybuckeye;627967 wrote:It's amazing the "logic" people use in this area. My wife's cousin doesn't want her husband to work voluntary overtime because it puts them in a higher bracket and reduces their refund. She counts on getting that check in the spring.
What???? That's not logic! Amazing indeed.
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Con_Alma
Posts: 12,198
Jan 6, 2011 12:05pm
This is the point of contention. Wouldn't you rather have a smaller chance of getting something back and a greater chance of paying? If not why?bigkahuna;627969 wrote:There is a smaller chance of having to pay at the end of the year and a greater chance of getting something back.
...
O-Trap
Posts: 14,994
Jan 6, 2011 12:06pm
Con_Alma;627941 wrote:The safety from what?? What safety do you see someone receiving from a 26 pay plan vs a 21 pay plan?
If a person gets a little lazy with their budget and runs out of money in July ... that causes a problem.
The 26-week payment plan means that you get the same paycheck every other week, all year long. No need to "store up for winter" (or "summer" in this case).
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Manhattan Buckeye
Posts: 7,566
Jan 6, 2011 12:08pm
queencitybuckeye;627967 wrote:It's amazing the "logic" people use in this area. My wife's cousin doesn't want her husband to work voluntary overtime because it puts them in a higher bracket and reduces their refund. She counts on getting that check in the spring.
Amazing but unfortunately true. Many of my former co-workers looked forward to getting their loan back in May because if they had the money they "would just spend it." Just don't get it.
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Con_Alma
Posts: 12,198
Jan 6, 2011 12:08pm
Got it. Thanks for the explanation o-Trap. Safety from ones-self I guess.