707
@[email protected] points out that the OP is mistaken.
Removing tax on overtime and tips are included in the bill.
https://www.cbsnews.com/amp/news/trump-tax-cuts-overtime-social-security-senior-deduction/
But they’re pulling the same bullshit as last time. Permanent for businesses, temporary for us.
I never understood how he could even promise to exempt overtime from taxes. Tips, I understand, but overtime is lumped in with your wages on your W2.
How would the IRS be able to tell your overtime wages apart from your regular pay?
There is a lot of room for abuse. Old salary $20/hour. New salary $8 + $12 overtime. For every "real hour" worked, you get 1 hour of "standy overtime pay". Employer still gets to deduct $20/hour expense, you get taxed on just $8/hour pay? Or maybe it is $16/hour, with $4/hour tax free. This scheme can replace a raise. Employees could get screwed if the "overtime gift" gets cancelled later.
Which is baked into the tax plan. 3 years and the OT tax break goes away. 3 years for companies to skimp on actually raising pay to meet living costs. Then they'll just blame the Dems if they win any seats or stay quiet if they retain majorities.
Your employer would declare it as such when they do payroll.
My pay slips have a separate line for regular pay and overtime pay at a different rate.
The IRS doesn't care about your paystubs (unless you're being audited). They only care about the W2, and there isn't a box for "overtime wage" on it. It's all lumped into the same box
So they will... add a box?
This is what I don't understand...taxes are on net income. IRS treats a dollar from overtime the same as it treats a dollar from wages.
People see a higher percentage taken out on paychecks because their payment processor is dumb and it assumes that your wages this week will be representative of all weeks for the remainder of the year, in which case you haven't been paying enough taxes so far this year, so it's trying to make it up.