Homesteading Forum banner

1 - 20 of 29 Posts

·
member
Joined
·
23,497 Posts
Discussion Starter #1
Cale got his first check from his new job and I admit it was disconcerting to see how much is gone from the various deductions. After being self-employed for so many years and not having any deductions, it was a bit odd to not receive the entire amount. Of course we had to pay taxes ourselves, but at least we had the money in our hands for a little while.

Oh well, here's to having a "real" job for a while anyways. He is enjoying it so far. The superintendent already told him he will be there until the end of the job and they want to take him to the next one they build. He is working for a company that builds those giant smoke-stacks for power plants. The one he is working on is going to be 850 feet high. The Discover Channel is filming there for some show they are going to put together about modern marvels.
 

·
proud to be pro-choice
Joined
·
2,691 Posts
Didn't Jeff McNally (he wrote the comic Shoe) do a spoof on taxes?

Don't look the gift horse in the mouth, you're getting a financial boost at a time when things in the self-employed world may be/are slow.

I am throwing down the gauntlet and challenging my fellow W-2 HTs to who has the most deduction categories coming out of his/her check? Not the dollar amount, the categories. I have 11:

FICA-OASDI, FEDERAL, FICA-HI, STATE
IMPUTED GTL>50K, HSA CONTRIB, GROUP INS
VISION, FLEX MEDICAL, VOL LIFE INS, 401(K)

Its a wonder I get any pay at all!!
 

·
Premium Member
Joined
·
5,986 Posts
What's disheartening is to see paystubs with withholding greater than my gross pay and they're complaining about no money.
 

·
Nohoa Homestead
Joined
·
5,398 Posts
Melissa said:
Cale got his first check from his new job and I admit it was disconcerting to see how much is gone from the various deductions. After being self-employed for so many years and not having any deductions, it was a bit odd to not receive the entire amount. Of course we had to pay taxes ourselves, but at least we had the money in our hands for a little while.

Oh well, here's to having a "real" job for a while anyways. He is enjoying it so far. The superintendent already told him he will be there until the end of the job and they want to take him to the next one they build. He is working for a company that builds those giant smoke-stacks for power plants. The one he is working on is going to be 850 feet high. The Discover Channel is filming there for some show they are going to put together about modern marvels.
The IRS does not care how many deductions you claim during the year, they figure it will all work out come tax day.

When I was working at a regular job (before I was self-employed), I would claim four or five deductions even though it was just me. That way less was withheld every month. At the end of the year, if I owed money I paid it and if I was due any money I got a refund. Usually I came out getting back less than 100 dollars.

My opinion is that letting the IRS hold money which is rightfully yours for a year with NO INTEREST is insane. People get all excited about at "big" tax refund when they could have been putting that same money in the bank and drawing interest on it. Sure, it wouldn't be much, but it's better than letting the government have it for a year for free.

donsgal
 

·
Big Front Porch advocate
Joined
·
44,851 Posts
Since I use my sewing as a business (and Turbo Tax to figure everything), I found that 6 months of one deduction, and 6 months of 9 deductions (maximum) would equal out to the feds owing me about $22 to $100 - that's about right for me. To have it just where I don't owe anything.

Angie
 

·
Registered
Joined
·
1,795 Posts
we let the g'ment hold ours throughout the year....why? because the one year that my DH got laid off his job and couldnt find a new one was the one where we owed $476 to state and $524 to federal AND I was expecting our first baby and going to school!

since then we just let them hold the money and when it comes in the spring, we do something big with it....this year was the deep freeze and some other niceties...one year was the riding mower and a shed to put it in, one year was replacing our CH/A furnace.....

I dont think Melissa was talking about the tax deductions as take one or 9 but more like:
fed tax withholding
state tax withholding
FICA
SS
Medicare
Insurance
Retirement

if you are completely self imployed, then when you are paid an average of $400 per week then you GET 400....there isnt a diff between gross wages and net wages......Melissa does taxes so she knows the ins and outs of deductions

Rachel
 

·
Big Front Porch advocate
Joined
·
44,851 Posts
RA - I think you're right.

I forgot about the spring job Melissa has until after I posted.

Angie
 

·
Registered
Joined
·
150 Posts
Even with all those deductions a self employed person can take, a 1/3+ still has to be set aside for taxes, so $400 isnt $400. My husband is now self employed after being laid off from the job he had for almost 9 years back in September. I am not looking forward to tax time. Back when he worked for the co. I was always amazed at how many deductions were taken out and if he worked overtime A LOT more was taken out!
 

·
Premium Member
Joined
·
9,544 Posts
This reminds me of something my little boy said the other day. He was asking if when he is old enough to work at a place where you get a real pay check, how much would he make a week.

Taking the opportunity as a math lesson, I told him how many hours he would be able to work and about how much he would get paid per hour, and told him to figure it out. He was thrilled with the results since he's never had that much money at one time.

Well, then I told him he didn't get that much money because he had to take out taxes. He asked about that and I explained about what taxes are and why they had to be deducted from your pay.

He was shocked!!! "What"???? "You have to pay someone to work"????? I laughed but then told him, yep, that's about right. :shrug:
 

·
member
Joined
·
23,497 Posts
Discussion Starter #12
LOL Karen, yes and you have to pay someone to own property, and to own a car, and to breathe air-Oh they haven't gotten that far yet...

Yes, I understand all about deductions. Cale claimed all of us, but they still took some Federal Tax and state tax. This is a union job with lots of overtime, and the union gets a share too. Of course that will cover insurance and retirement so nothing to complain about. It was just a bit different to have so much taken out of one check.
 

·
Premium Member
Joined
·
18,008 Posts
This thread made me look at my last paycheck. It looks like 35% of my gross pay is deducted from my paycheck every two weeks.....wow!
 

·
member
Joined
·
23,497 Posts
Discussion Starter #14
Cale's was about 20%. People with no children to claim get a bigger hit. When doing taxes I always feel sorry for the single men who work in our local coal mines. They do earn big money, but some of them pay more in federal tax alone than we made a year.
 

·
..where do YOU look?
Joined
·
3,920 Posts
I claim 8 deductions now, and that leaves me a little better than even at year's end. In 2004 I paid more in Federal Taxes than I GROSS now. It made me sick!

R
 

·
Registered
Joined
·
5,553 Posts
Melissia, I have to confess, my first thoughts was, "But our Melissa, does other people's income taxes, how can she not know about payroll deductions?" -- But then I realized that maybe you are like me, and since it is not what is called tax season (Jan-April) maybe you do not think much about taxes at this time of year.

There is one brightside, okay maybe it's just a little twinkle, when you are employed by someone else, instead of self - you and your employer each pay 1/2 of your FICA - instead of you playing it all.

While ya'll are noticing what percentage is being withheld from your payroll checks, don't forget to add the addition of your local sales, and property taxes to that amount :)

Hugs,
Marlene
 

·
Registered
Joined
·
1,750 Posts
Finland's tax is about 40-45% out of every paycheck...I about unloaded a brick from a misc. body part when I hear that one LOL. No wonder everyone here is unemployed and collecting benefits. If two people collect welfare, it's as much money as if they both worked fulltime jobs. The welfare pays for your bus ticket, housing, etc...so they're actually living high on the hog.

Kat
 

·
proud to be pro-choice
Joined
·
2,691 Posts
Desperation for revenue has made the fed and some states greedier than at any other time in the past. If you are a W-2 employee, the IRS considers all withholding to have occurred in nice 1/12 chunks during the year, even if you sent your entire December check to them and nothing the other 11 months. I flat out refuse to send in estimate money when I know we won't owe, e.g. my withholding will cover our liability. So yes some times uncle sam sits on my money however he sits on a lot less than if I blindly estimated in only based on the self-employed earnings. And for a while, they were penalizing people (though I think they caught a lot of flack) for 'under estimating' so now if you earn your money seasonally, you don't get nailed with the penalty. In theory, a self-employed person could earn all monies 12-30 of the year and have to spend time and money fighting a potential IRS penalty.
 

·
Premium Member
Joined
·
7,230 Posts
RachAnn in NW Okla said:
we let the g'ment hold ours throughout the year....why? because the one year that my DH got laid off his job and couldnt find a new one was the one where we owed $476 to state and $524 to federal AND I was expecting our first baby and going to school!

since then we just let them hold the money and when it comes in the spring, we do something big with it....this year was the deep freeze and some other niceties...one year was the riding mower and a shed to put it in, one year was replacing our CH/A furnace.....
Rachel for some people this is the only way they can save but it is better for everyone who has the discipline, to set aside some money in case they owe taxes and then blow it like it is a refund along with the interest you've earned in April or whenever you file.
 
1 - 20 of 29 Posts
Top