Your TAXES

[evdog]

FWIW, and noting tax brackets have changed some since, I paid very similar overall tax rates when I lived in BC and when I moved to CA. That was with similar income level and circumstances (ie, few deductions on either side).

But in the US I had a $6k deductible for health insurance. Premiums were employer paid but we're probably in the $4-500/mo range. In BC we had a medical services plan premium that was around $75/mo, almost always employer paid. In Canada you generally don't pay for medical services, it's paid from taxes. So considering the ridiculous amount we pay for medical insurance in the States I'd say taxes are higher here for the average person.

Also FWIW my taxes went up about $3k thanks to the Trump tax cuts since he reduced the limit for state and local tax deductions.

[Hood26]

Also FWIW my taxes went up about $3k thanks to the Trump tax cuts since he reduced the limit for state and local tax deductions.

Me too. Also, became a standard deduction user for first time since being a home owner.

[californiagrown]

Is there any good reason to have my taxes deducted from my bimonthly paycheck, instead of just paying all my taxes at the end of the year when i do my taxes. Wouldnt i just be increasing the amount of money i have available to invest by deferring taxes till the end of the year? Am i missing something here?

[dan_pdx]

IIRC, you will incur some late payment penalties depending on the specifics of your case. You might be able to switch to quarterly payments, but it doesn't help that much.

[old goat]

Is there any good reason to have my taxes deducted from my bimonthly paycheck, instead of just paying all my taxes at the end of the year when i do my taxes. Wouldnt i just be increasing the amount of money i have available to invest by deferring taxes till the end of the year? Am i missing something here?

Staying out of jail?

Taxes are pay as you go. People who don't have withholding have to pay income tax in 4 quarterly installments, Anyway, employers are required by law to withhold taxes.

[XXX-er]

FWIW, and noting tax brackets have changed some since, I paid very similar overall tax rates when I lived in BC and when I moved to CA. That was with similar income level and circumstances (ie, few deductions on either side).

But in the US I had a $6k deductible for health insurance. Premiums were employer paid but we're probably in the $4-500/mo range. In BC we had a medical services plan premium that was around $75/mo, almost always employer paid. In Canada you generally don't pay for medical services, it's paid from taxes. So considering the ridiculous amount we pay for medical insurance in the States I'd say taxes are higher here for the average person.

Also FWIW my taxes went up about $3k thanks to the Trump tax cuts since he reduced the limit for state and local tax deductions.

2 countries side by each with 2billion a day in trade, same cars & trucks drivng a huge auto industry, same money albeit slightly diffrent values a lot of the same stores I think I think its gona be similar, my manager couldn't tell me but then he was always a ditherer

Different than in the USA as I understand, it took 2 months to get a MRI and 9 months for an ACL so there is less but enough HC infrastructure to get care which some might argue

no money out of my pocket except crutches but I brought my own

I've never thot about it but I guess I've never paid MSP

oh and no body has tried to shoot me

[Dantheman]

Is there any good reason to have my taxes deducted from my bimonthly paycheck, instead of just paying all my taxes at the end of the year when i do my taxes. Wouldnt i just be increasing the amount of money i have available to invest by deferring taxes till the end of the year? Am i missing something here?

You get paid every two months?

As noted, you can't withhold nothing. Do the math on how much extra interest you could realistically earn by withholding the bare minimum. It is surely trivial and not worth the hassle you'll put yourself through.

[californiagrown]

You get paid every two months?

As noted, you can't withhold nothing. Do the math on how much extra interest you could realistically earn by withholding the bare minimum. It is surely trivial and not worth the hassle you'll put yourself through.

Why do the math when i could just ask ChatTGR?

[skaredshtles]

Why do the math when i could just ask ChatTGR?

If you don't withhold enough you'll get dinged with an "extra" penalty come tax time, which would probably wipe out any "savings" from investing the difference.

[singlesline]

If you want to underwithhold, you have to pay in DECEMBER; you can't wait until tax filing time. If you aren't paid by december, you will eat a penalty of I believe 3% of taxes owed.

This is made more complicated by the fact that you don't actually have all of the documents needed to file taxes in December as the year hasn't ended and a lot of those don't even get produced until February. So you are doing extra work, pulling statements/paystubs/etc., just to make an estimated payment that will need to be corrected when you actually file taxes using the proper tax forms.

Mostly...not worth it. Get your withholding on your W4 close enough without underwithholding and just forget about it. Are you giving the gov't an interest free loan? Sure...but you're saving yourself mental load, time, energy, and the risk of a penalty.

And since your money is earned throughout the year, the average holding period is much less than 12 months...you're not really losing that much interest.

You get paid every two months?

As noted, you can't withhold nothing. Do the math on how much extra interest you could realistically earn by withholding the bare minimum. It is surely trivial and not worth the hassle you'll put yourself through.

This word has always bothered me:


Semimonthly is probably the correct term, but bimonthly is far more common for referring to paychecks on the 1st and 15th. Extra strange given biweekly is probably the most common pay frequency and that clearly means every two weeks.

[XXX-er]

So taxes due at the end of the year for the year,

Deadline up here is april 30, so IME they don't really get on your case until after 2 yrs, even if they owe you money they want you to file those taxes

[Dantheman]

This word has always bothered me:


Semimonthly is probably the correct term, but bimonthly is far more common for referring to paychecks on the 1st and 15th. Extra strange given biweekly is probably the most common pay frequency and that clearly means every two weeks.

Well, TIL. That's an objectively insane quirk of the English language. Semimonthly payroll is also the stupidest shit ever, "Hey, let's set up a system where payday is always on a different day of the week and sometimes on weekends."

[singlesline]

So taxes due at the end of the year for the year,

Deadline up here is april 30, so IME they don't really get on your case until after 2 yrs, even if they owe you money they want you to file those taxes

You need to be *close* to the right amount by the end of the year (or maybe you get some leeway into early January since income could have been earned on Dec 31). You don't have to actually file taxes and pay the difference until April 15th, but if you aren't close you will owe a penalty.

Rules are you don't pay a penalty in April as long as one of these is true:
- You owe less than $1000 extra.
- You paid at least 90% of what you owe.
- You paid at least 100% (110% for high income) of what you owed last year.

That last one is your safety net if you really want to play games with not paying your taxes until December. You can wait until the end of the year and then pay what you owed last year...that provides you protection from any potential penalty.

[singlesline]

Well, TIL. That's an objectively insane quirk of the English language. Semimonthly payroll is also the stupidest shit ever, "Hey, let's set up a system where payday is always on a different day of the week and sometimes on weekends."

As opposed to...lets set up a system where you either get paid 26 or 27 times per year (so salaried employees check sizes change)...you also have some months where you get paid 3 times instead of two.

There's no really perfect solution, but semimonthly has some advantages:
- Most people's bills happen per month--mortgage, car, and internet bills are the same in February as in December--so there's some value in stability of monthly earnings.
- Taxes and things like health insurance plans operate on a calendar year basis so your 24 pay periods always nicely nest into the calendar year the same way.
- Reduces HR/Payroll processing overhead and eliminates any questions about when payday is (is it this week? next week?...no, it is always the same day). Heck, I know some people who only get paid once a month.

But it can be a bit more awkward for hourly/overtime depending on when you count the pay period closing dates. On a biweekly with a one-week lag you always know which check your OT pay is going to land in.

Economically it should make zero difference. You still earn the exact same amount each year and almost the same amount in each month...but we know that's not how people actually act (see how many people get excited when it is a 3-check month!).

[XXX-er]

IME with a good bookeeper ( AKA the computer) witholding tax on my steady paycheck I would be within < 100 $ either way, it was claiming car expenses or buying RRSP or not paying any taxes at all that make for large amounts of money to be owed or recieved at the end of tax year

I was told CRA really want you to file your income tax, which at its simplest is signing the T-1 and sending it in

you will still owe ( or not) taxes but technicaly you did file


my tennant asked to pay rent on the 22nd cuz thats when her welfare check arrives ... well why not ?

[old goat]

I'm under-withheld on my pension but I can make up the shortfall by withholding extra from my 401K mandatory distribution any time by the end of the year. Apparently withholding, unlike estimated taxes, count as timely as long as it takes place sometime during the calendar year. (The last estimated tax payment is due Jan 15 of next year.)

[BCMtnHound]

… oh and no body has tried to shoot me

So far.

[XXX-er]

So far.

well I do live in the bible belt, but the liberals are outlawing all kinds of grandfathered guns every year

[Rideski]

What's up with this scenario where a client can send you a 1099 by snail mail, and you're responsible for reporting it. What if one goes missing, or you forget about one?

[old goat]

I don't know if it's the same scenario, but we hold the mortgage on our son's house. Per our accountant, we just report the mortgage interest on our 1040 with the address and his ssn, he does the same, and the IRS has been happy with that for years. Neither of us files a 1098 or 1099.

[Rideski]

In a way yes. A client could spend $60k on goods or services from my company. Some of them choose to not send a 1099. A different company can spend whatever tiny amount the current reporting threshold is, and voluntarily chose to send me a 1099. Which I'm responsible for showing in my return.
The revenue gets reported either way, but I'd I don't have their 1099 doc in my return I presume that's a red flag.

[Bunion 2020]

^^^ It isn't, and FWIW if you are billing as a 1099 they are not obligated to send you anything. They are obligated to report those payments to the IRS.

[Foggy_Goggles]

I won't do business with subs that aren't corps because I hate paying my accountant to produce 1099s.

Your income. Your problem.

Streamline your process so your bookkeeping is easy. "Email a COI and I'll get you paid". Done. The rest is on you.

Sent from my Turbo 850 Flatbrimed Highhorse

[Rideski]

I'm an LLC and the clients are sending me 1099's (without prior notice)

[Foggy_Goggles]

C or S Corp select?

If so, my understanding is that you are except from receiving 1099 misc

But there are entities out there that 1099 everyone. So yeah, fuck those companies but there is nothing you can do about it.

If they have your EIN/TIN they can kick out the 1099. So yes, the tax code in onerous and sometimes you have to pay to defend yourself due to no fault of your own.

I think that CPAs with access to the IRS system can see on the 1099s that were issued to you.

That probably exceeds my knowledge a bit. I just have 25+ years as an S Corp contractor with my head on a swivel watching to try and not get fucked too hard.

Sent from my Turbo 850 Flatbrimed Highhorse