485
"Getting paid more money is for fools"
(lemmy.ml)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 20 Jun 2024
485 points (96.5% liked)
shitposting
1638 readers
102 users here now
Rules •1. No Doxxing •2. No TikTok reposts •3. No Harassing •4. Post Gore at your own discretion, Depends if its funny or just gore to be an edgelord.
founded 3 years ago
MODERATORS
Just in case anyone is curious about how it works...
Your entire income isn't taxed at the same rate. Each chunk of your income is taxed differently. The first 11k is taxed at 10%, the next 35k is taxed at 12%, the next 50k is taxed at 22%, and it continues on at different intervals after that. This person believed that going from 44k to 45k would then change their tax bracket and their gross income would be taxed at 22%, thus reducing their net income. This is false. Only the amount over the threshold gets taxed at the higher rate. Always take a raise if it benefits you.
This person was clearly joking. Look at their username.
Still too many who don't know this, it's best to explain to everyone. I've explained it to my mother several times, and she gets it, but then conveniently forgets about that when discussing politics.
I was straight up told getting kicked into a new tax bracket would cost me money when I started working back in the 90s. By someone 3x my age. I believed it, being a wide eyed moron. I didn't figure out progressive tax rates for like a decade after.
Just shitty one person could cost so many people so much opportunity in life.
I've heard of people who use this as an excuse to turn down overtime
I've tried to explain this to coworkers who claim to want overtime, but are afraid to due to this. They either don't understand, don't believe me, or don't really want to work OT.
As long as they filled out their w-4s right they wouldn't even have to worry. I've talked to too many people who put zero down and wonder why they owe every year.
I think you've got that backwards. My understanding is a 0 on your W2 means you're taking no deductions and you'll be taxed at max. Unless you're thinking of marking as exempt, which would be no tax taken out (then you'd owe at the end of the year).
But I could be wrong there. Reading this PDF from Vanderbilt makes me think I'm not, but taxes are intentionally as confusing as possible so I'm not going to say I'm confident. I inevitably end up owing the fed and paying it with my state return, so don't take my word for fact lol.
No w2 is the tax document, w4 is what you fill out with your employer. If you owe at the end of the year and that is your only job I would highly suggest going to your employer and updating your w4. You should be able to update your state as well. There is a tool on irs.gov called the Tax withholding estimator which can tell you exactly how much you should be taking out.
But isn’t that the whole point?? If I put zeros on my w4, why the fuck do I have to use another tool to calculate what I’ll be taxed, then add an additional withholding to make sure I don’t end up with a tax bill in April?
It’s insane.
Because putting 0 on your w4 when you know you have to pay taxes is a mistake. The tool is there to help you calculate. It's not difficult, you just take your last pay stub and plug in numbers then it does the rest. Could it be easier sure. But this is how you work with the tools we have.
Yeah, we’re talking past each other.
I understand how to do it, I just don’t think it makes sense that it’s necessary to do it that way.
Zero should equal “max taxes withheld” and the fact that it’s more complicated than that makes it feel intentionally complex (which I’m aware it is)
Lol, I did that and that's how I got where I am. Any other time I either get way too much back or I owe a shit ton. At least this way I still come out ahead.
Thanks for the clarification re W2/w4.
I am surprised by the amount of professionally employed homeowning parental adults I have encountered that do not know this.
It's what happens when public education is poorly funded and doesn't explain the basics with what little they do have.
It doesn't help that welfare does actually work this way.
I don't know the actual figures but my understanding is government assistance tends to work along the lines of "if you make less than $300, then the government gives you $100" so getting paid $350 is actually worse than being paid $290 for example, since going over the threshold cuts off the welfare completely.
Hell there was even a West Wing episode where they got it wrong.
That actually doesn't surprise me because the West Wing was written by rubes.
Youd be surprised at how many think a raise gives them less
That doesn’t mean anything.
Let's make it even more simple with some fake numbers to make it super easy.
$0-$10,000 - taxed at 10%
$10,000-$20,000 - taxed at 20%
$20,000-$30,000 - taxed at 30%
If you make 9 and get a raise to 11, seems like you would now pay 20% on all that! But no.
The first 10 is still taxed at 10%, only the extra $1,000 gets taxed at 20%.
If you go to 31, again, the first 10 is taxed at 10, the next 10 is taxed at 20, and only the extra $1,000 gets taxed at 30%.
Goll durnit, I know 10,000-20,000=-10,000! How I supposed to pay 20% tax on -$10,000?? Do they pay ME money?? Clearly everythin you said is BULLshit!
(This is a joke just to be clear :P)
If they receive subsidized benefits like food stamps or quantity for free health benefits, they could lose those though. There's a reason they call it the benefit cliff. My family stayed under that line intentionally for years and when decided to take raises to get out of that cycle, things were worse for a long time.
10k will get you over that hurdle in most cases unless it barely sneaks you over the benefits line. If you shoot past it though, go for it. Thresholds though, I know. Just don't want anyone not taking a raise due to a misread comment.
As a rule though: Stay updated on the max total assets you are allowed before benefits begin decreasing, and make sure you know what is weighted.
10k is slightly less than an increase of $5/hr in pay for a full-time hourly worker. That would likely be well over of 30% pay-bump for a person working the kind of jobs that usually keep them on those programs. -At least, it would be in my state.
Also, considering the people who need this advice may also need to be reminded that this varies from country to country.
Where the hell are taxes this low? I pay 42% income tax, excl social insurances and charges.
USA Federal (with rounding, or a previous year).
Oh but then state on top etc.
Where are you paying 42%?
Papua New Guinea, Luxembourg and Germany are 42%, and a few other European countries have a bracket that hover around the 41-44%.
Ireland
44k to 54k, you're right, but the post says 10k, so unless we accidentally dropped a 0 on the floor somewhere?
He's talking about thresholds, not the actual salary. The fact that they said 44k to 45k and not 44.9k to 45k or 44.5k to 45k is just a coincidence.
For example. Say there's a threshold at 100k and the guy was currently at 90k salary. 10k would put him at 100k and that's no good. He would've accepted a 9k raise, however. He had an issue with going from 99k to 100k, not the whole raise. Or in op's case, 44 to 45k.
Or at least that's how I understood it.
Commenter says this person believes... And proceeds to change the numbers in the post. I feel should have been consistent with the 10k as example.
Ok, believe whatever you want /shrug
I'm not saying you're wrong - I completely agree with you. But I have been in the position where, if I made 10 dollars less I would have paid more than 100 dollars less in tax. That just comes from the infuriating discrete tax "tables," instead of actually calculating the tax using a continuous formula.
ETA: Apparently many here have never prepared their own tax return. Here is a sample of the tax table for 2023. The first two columns give a range of (adjusted) income, and the third is tax owed. Notice that someone who made $51,099 would pay $11 less in tax than someone who made just one dollar more. Admittedly that is less extreme that what I claimed above, but "back in the day" when I started paying taxes the tables went in much larger steps of income.
If they are right, and they are, your claim makes zero sense
I don't think you've understood what my claim is. Please see my edit.
I mean, I get it, but you could also just look at it like getting an exceptionally good deal right before you hit the next table row.
Sure, but my point is that it is possible to make more money and then actually have less money because of taxes. It's just not for the reason in OP's post.