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Tax law changes for 2016. When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2016. For more information, see Pub. 505, Tax Withholding and Estimated Tax.
Reminders
Estimated tax safe harbor for higher income taxpayers. If your 2015 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2016 or 110% of the tax shown on your 2015 return to avoid an estimated tax penalty.
Not so. One can have discipline and one also has needs. I am a big saver. I save much more then most.
What does how much you save have to do with whether you spend money on hand. They’re two different issues.
I suppose you’re saying that money “on hand” can be spent if a need arises.
My only point it that one CAN have money on hand and NOT spend it. That’s all.
Neither one of those things has anything to do with how great a saver you are or how much you save.
My wife and I grossed 185k last tax return. We got back less then a thousand between State and Federal. If we earn more doing OT we will likely owe a few thousand. Sure we would make more overall money. Yet, then have a tax bill and have to pay in a big chunk. Anyone in that same boat ? Feels like getting a moderate raise or working OT is not worth it. Might be best to work credit hours and take days off.
So what you're saying is that a person making $50k annually is better off financially than a person making $150k annually because the person making $50k pays less taxes?
So what you're saying is that a person making $50k annually is better off financially than a person making $150k annually because the person making $50k pays less taxes?
No. Im speaking to folks who might be on a threshhold where a few thousand can change their status at tax time. Not definitely the example you gave. But may apply between grossing 200k vs 193 k.
No. Im speaking to folks who might be on a threshhold where a few thousand can change their status at tax time. Not definitely the example you gave. But may apply between grossing 200k vs 193 k.
Household A making $150k owes $29,088 in federal taxes.
Household B making $153k owes $29,892 in federal taxes.
Grossing $3k more in OT, you'd jump brackets and pay $804 more in taxes (~26% of the $3k) and have $2196 more in the bank.
Household C making $229k owes $51,172 in federal taxes.
Household D making $232k owes $52,089 in federal taxes.
Grossing $3k more in OT, you'd jump brackets and pay $917 more in taxes (30.5% of the $3k) and have $2087 more in the bank.
It's a simplistic example for sure but, outside of the OT pay putting you over some impactful deduction threshold, you're complaining just to complain.
Household A making $150k owes $29,088 in federal taxes.
Household B making $160k owes $31,852 in federal taxes.
Grossing $10k more in OT, you'd jump brackets and pay $2754 more in taxes (27.54% of the $10k) and have $7236 more in the bank.
Household C making $225k owes $50,052 in federal taxes.
Household D making $235k owes $53,079 in federal taxes.
Grossing $10k more in OT, you'd jump brackets and pay $3027 more in taxes (30.27% of the $10k) and have $6973 more in the bank.
It's a simplistic example to show the sheer folly of your logic.
I'd gladly pay higher internal taxes to have enough taxable income to be in the 39.6% bracket! I'm no tax expert and I think many of the posters, who know what they're talking about, have sufficiently explained why the OP should not worry about how making over time will affect the taxes he owes. If I understand the OP, I thought he said he got a refund for 2015, albeit smaller than he wanted. The graduated tax brackets are set up so that no one is severely penalized for making a few dollars over the threshold.
I'd gladly pay higher internal taxes to have enough taxable income to be in the 39.6% bracket! I'm no tax expert and I think many of the posters, who know what they're talking about, have sufficiently explained why the OP should not worry about how making over time will affect the taxes he owes. If I understand the OP, I thought he said he got a refund for 2015, albeit smaller than he wanted. The graduated tax brackets are set up so that no one is severely penalized for making a few dollars over the threshold.
Yep. I edit my post to show a narrower gross salary margin over the threshold.
Sometimes, it's better to use examples and specific numbers to "adjust" some people's thinking/perspective.
Household A making $150k owes $29,088 in federal taxes.
Household B making $153k owes $29,892 in federal taxes.
Grossing $3k more in OT, you'd jump brackets and pay $804 more in taxes (~26% of the $3k) and have $2196 more in the bank.
Household C making $229k owes $51,172 in federal taxes.
Household D making $232k owes $52,089 in federal taxes.
Grossing $3k more in OT, you'd jump brackets and pay $917 more in taxes (30.5% of the $3k) and have $2087 more in the bank.
It's a simplistic example for sure but, outside of the OT pay putting you over some impactful deduction threshold, you're complaining just to complain.
Whose complaining ? Im talking about perhaps a life work balance, I guess. In my example I mentioned I am still working over tour hours. Just whether its better to work it for OT vs credit. I have heard coworkers complain of OT and eventual tax burdens, causing them to prefer credit hours. No one is complaining. Also the calculations you guys mention I will keep in mind.
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