This is the problem. My partner doesn’t want to work OT because he thinks it will cost him more in taxes. I explain why that’s not exactly true, but I can tell he’s not interested. Financial Literacy in the US is abysmal.
No, there is not. There are many tax credits one is no longer eligible for after a certain threshold. There are various programs one is no longer eligible for after a certain threshold.
Most of the likely credits tend to phase out gracefully. So it’s true that we can’t be certain, based on my experience of when people are afraid of making too much money, it’s almost always because they think a higher tax bracket applies flatly across their income not due to nuanced understanding of tax credit and welfare benefits.
This is true for many people I’ve talked to, but he does understand, on a basic level, how the brackets work. When it comes to the calculation parts, I think he gets frustrated with all the rules.
But it’s okay! I’m good at stuff like that and he can build pretty much anything. We all have our strengths. :)
Awww I thought for sure we were gonna have the perfect diagram thing…
Bah. So maybe there’s some YouTube video where they’re like “Bob made $50,000 last year. This year he took some extra construction shifts and made $75,000. …”
I don’t care about the partner’s weaknesses I demand clever solutions :p hehe glad everything is good!! 💙
Edit with silly riff that’s probably inaccurate:
I’m kiddddding this was just the evil thought when I first read it :p
Actually, yeah. Something visual would probably be much better. That’s a great idea! Next time the topic comes up I’ll try that!
If he is interested in something he’ll dive in head first. He reads so much! But if he’s not interested in something…that’s another story. It’s hard for him to fake it lol
We watch a lot of mini documentary on YouTube. I can’t believe I didn’t think of that before!
Nah. He’s not an idiot. But he is impatient. He doesn’t handle paperwork or anything involving patience well. (ADHD)
I also think taxes in the US are intentionally over complicated and confusing. I don’t struggle with things like that but I can empathize with people who do.
have you considered asking him why he even thinks that in the first place? You’ve literally put him into a spot where he’s too stupid to even care about whether or not that response is logical or makes sense.
If he just doesn’t want to work overtime that’s fine, a lot of people don’t, why would he justify it with stupid tax logic that he evidently must know is stupid? Seems like cope to me.
You cannot simultaneously “be smart” and then “be stupid” you are either stupid about something, or not. It’s one of the two. I’m sure he’s a pretty generally smart guy, most people are, but either it’s an excuse he uses because he doesnt want to work overtime, or he’s literally uneducated (and therefore stupid) about taxes, and chooses not to be educated about it, even though it would be financially beneficial to him, because that’s literally how money works. (which would also make him pretty objectively stupid in that case) again, he may not care at all, but then why wouldn’t he just be upfront about not caring?
Oddly enough it kinda does. OT can make you pay out more taxes on that one check since withholdings are calculated by check. Basically the government/payroll system thinks you’re going to be making that every week so more taxes will be taken out.
In reality this only effects the size of your tax bill or return at the end of the year.
The whole notion of “kicked up a tax bracket” is also a misleading thing. Only a piece of your income goes into the “new bracket”, all pay under the new bracket is taxed as they would have been used to.
it is a misinformation many people in power wants to keep because it lets republicans sell their policies to not tax the rich and bosses to not raise their employee’s salaries.
I’ve heard it in Australia too, which has the same tax bracket system as the USA. I think the fact that this stuff isn’t taught in school is a major issue.
I’ve had jobs (more than one), where working OT would result in my paycheck take home pay being less than if I had not worked the extra hours. And that’s because it moved me into the next bracket, and more taxes were taken out. So why waste my time working OT?
I’d you made say 1500 normally and 2000 with ot your take home could be 1200 and 1400. Paying more taxes overall on the ot but still taking home more.
There is no way you’d take home less money because taxes are paid on the first $1500 @ $300 and say the next $500 @ $300 too at a higher bracket. Overall your pay is still higher though even though your taxes “doubled”.
That’s not how it works though. Unless you didn’t work regular hours during that same time period so worked less overall OT is taxed higher upfront so you don’t end up owing (more), but would never decrease your pay
This is the problem. My partner doesn’t want to work OT because he thinks it will cost him more in taxes. I explain why that’s not exactly true, but I can tell he’s not interested. Financial Literacy in the US is abysmal.
Your partner is a moron who doesn’t understand relatively simple math.
There’s not enough information provided to reach this conclusion.
There is very much enough information given to reach that conclusion.
No, there is not. There are many tax credits one is no longer eligible for after a certain threshold. There are various programs one is no longer eligible for after a certain threshold.
Most of the likely credits tend to phase out gracefully. So it’s true that we can’t be certain, based on my experience of when people are afraid of making too much money, it’s almost always because they think a higher tax bracket applies flatly across their income not due to nuanced understanding of tax credit and welfare benefits.
This is true for many people I’ve talked to, but he does understand, on a basic level, how the brackets work. When it comes to the calculation parts, I think he gets frustrated with all the rules.
But it’s okay! I’m good at stuff like that and he can build pretty much anything. We all have our strengths. :)
Hellllll yeahhhh!!!
Yooo is he visual?
Awww I thought for sure we were gonna have the perfect diagram thing…
Bah. So maybe there’s some YouTube video where they’re like “Bob made $50,000 last year. This year he took some extra construction shifts and made $75,000. …”
I don’t care about the partner’s weaknesses I demand clever solutions :p hehe glad everything is good!! 💙
Edit with silly riff that’s probably inaccurate:
I’m kiddddding this was just the evil thought when I first read it :p
Actually, yeah. Something visual would probably be much better. That’s a great idea! Next time the topic comes up I’ll try that!
If he is interested in something he’ll dive in head first. He reads so much! But if he’s not interested in something…that’s another story. It’s hard for him to fake it lol
We watch a lot of mini documentary on YouTube. I can’t believe I didn’t think of that before!
Nah. He’s not an idiot. But he is impatient. He doesn’t handle paperwork or anything involving patience well. (ADHD)
I also think taxes in the US are intentionally over complicated and confusing. I don’t struggle with things like that but I can empathize with people who do.
Strictly speaking the taxes in the US are not that complicated, but the credits, deductions and what not are. Still Tomato Tomato.
have you considered asking him why he even thinks that in the first place? You’ve literally put him into a spot where he’s too stupid to even care about whether or not that response is logical or makes sense.
If he just doesn’t want to work overtime that’s fine, a lot of people don’t, why would he justify it with stupid tax logic that he evidently must know is stupid? Seems like cope to me.
You cannot simultaneously “be smart” and then “be stupid” you are either stupid about something, or not. It’s one of the two. I’m sure he’s a pretty generally smart guy, most people are, but either it’s an excuse he uses because he doesnt want to work overtime, or he’s literally uneducated (and therefore stupid) about taxes, and chooses not to be educated about it, even though it would be financially beneficial to him, because that’s literally how money works. (which would also make him pretty objectively stupid in that case) again, he may not care at all, but then why wouldn’t he just be upfront about not caring?
“you can’t make less money by making more money”
Unless you’re poor enough to be on welfare. The Welfare Cliff is awful.
This can also apply to student loans when one person makes a lot more than the other.
Oddly enough it kinda does. OT can make you pay out more taxes on that one check since withholdings are calculated by check. Basically the government/payroll system thinks you’re going to be making that every week so more taxes will be taken out.
In reality this only effects the size of your tax bill or return at the end of the year.
That’s what people see and exactly why they think they got kicked up a whole tax bracket.
The whole notion of “kicked up a tax bracket” is also a misleading thing. Only a piece of your income goes into the “new bracket”, all pay under the new bracket is taxed as they would have been used to.
Exactly, and it also depends on what withholding you have requested.
Run, if it’s not too late.
We all have our weaknesses and faults. No need to dismiss every relationship due to imperfections.
Nah. He’s not a bad person or a dummy. He just gets frustrated by bureaucracy and doesn’t have the patience I have.
It’s not the fear of bureaucracy that is concerning, it’s the lack of interest to listen to your sound advice on a relatively simple topic.
That’s fair. I appreciate your concern for me!
He’s not always like that. I didn’t mean to make him sound like a jerk. I just meant to relate to the topic of tax confusion with personal experience.
He had pretty severe ADHD and struggles with some topics. It’s okay! I deal with the money stuff and he cooks dinner. :)
Fair enough. Good luck on your journey!
This is not a US specific issue, tbh. I’ve heard this weird belief repeated by all sorts of people.
it is a misinformation many people in power wants to keep because it lets republicans sell their policies to not tax the rich and bosses to not raise their employee’s salaries.
You’re absolutely right. I cant speak for anyone else, as I don’t live there but I highly doubt the US is an exception.
Rather than being mad at each other, I want to make sure we hold the right people accountable! Governments, corporations, billionaires etc.
It’s a form of oppression.
I’ve heard it in Australia too, which has the same tax bracket system as the USA. I think the fact that this stuff isn’t taught in school is a major issue.
I’ve had jobs (more than one), where working OT would result in my paycheck take home pay being less than if I had not worked the extra hours. And that’s because it moved me into the next bracket, and more taxes were taken out. So why waste my time working OT?
That’s not how is works though.
I’d you made say 1500 normally and 2000 with ot your take home could be 1200 and 1400. Paying more taxes overall on the ot but still taking home more.
There is no way you’d take home less money because taxes are paid on the first $1500 @ $300 and say the next $500 @ $300 too at a higher bracket. Overall your pay is still higher though even though your taxes “doubled”.
Well, it has happened more than once. Of course it would depend on the amount of overtime I worked. It probably happened if I only worked a little OT.
That’s not how it works though. Unless you didn’t work regular hours during that same time period so worked less overall OT is taxed higher upfront so you don’t end up owing (more), but would never decrease your pay
But it did, more than once. Its been years since it happened though. I cant remember the amount of OT I worked that caused it.
I think you’re on the wrong side of the chart here.
By design
No, they teach you this in high school. These people are just dumbasses
Yes, everyone’s education is the same as yours.
Yeah, I definitely didn’t leave this in school. I know about it from reading articles on tax brackets. _(‘’)/
Tbh, literacy in the US, financial or otherwise is abysmal right now.