Save your money just in case......
Also, I wonder if bumping up 401k contributions could help offset some burden?
Also, I wonder if bumping up 401k contributions could help offset some burden?
Payroll Tax Cut has started.
- Thread starter BlueRaider22
- Start date
It has been reported by some that since 401k's contributions come out pre-tax that cranking up contributions could lower your Gross Pay before the taxes are taken out. But this would all depend on how the process actually works.
It's not really a tax cut it's a tax payment deferral which comes due later.
My employer is giving the option to do so.
I am thinking of taking it. I figure it is similar to a no-interest loan.
As long as you can manage your money efficiently and don't lose your job, it could work out.
I am thinking of taking it. I figure it is similar to a no-interest loan.
As long as you can manage your money efficiently and don't lose your job, it could work out.
Was there discussion of forgiving the repayment down the road? I am an employer but I don’t handle payroll I am not sure we have planned for this.
Yeah it’s possible. You don’t have to do it if you don’t want to. If you do it you will possibly have to garnish wages in the future. My company isn’t doing it for now.
I still don’t understand what you are saying. Why would you want to lower your gross pay because of this?
I imagine many companies won’t switch their payroll on this...can hope DT wins and have a better chance to forgive the payments altogether.
So that he would have less tax deferred to have to pay back later.
Gotcha. Seems like the payroll taxes saved on an increased 401k contribution over the last quarter would be a pretty small amount.
****, of course I make too much to qualify. No stim check, no payroll tax holiday. thanks for nothing Donald. Oh well, I didnt need a new 80 inch tv no way.
Increasing 401K contributions will not affect the deferral. It is only pre-tax for federal tax withheld, not social security or medicare.
The repayment of the deferral will be handled by your employer starting January 1. So if your company opts in, you will see basically about 6.2% more per your net payroll check for the last four months of 2020. Then starting January 1, you will go back to having the 6.2% social security tax taken out of your check PLUS another 6.2% taken out of your check for the first four months of the 2021 calendar year.
Or if you don't like your job, and they didn't make you sign something, just quit January 1, 2021 and leave the deferral for your employer to have to pay back. (since he can't withhold on your anymore). This is the guidance we need to know right now, but we don't have it.
The repayment of the deferral will be handled by your employer starting January 1. So if your company opts in, you will see basically about 6.2% more per your net payroll check for the last four months of 2020. Then starting January 1, you will go back to having the 6.2% social security tax taken out of your check PLUS another 6.2% taken out of your check for the first four months of the 2021 calendar year.
Or if you don't like your job, and they didn't make you sign something, just quit January 1, 2021 and leave the deferral for your employer to have to pay back. (since he can't withhold on your anymore). This is the guidance we need to know right now, but we don't have it.
Ahhh, that's what I was waiting on. I didn't know if that would do it or not. I heard a talking head on CNBC talking about the possibility of it working this morning, but she wasn't sure it it would work or not.
I kind of noticed this would be a loophole some would use to avoid paying it back. Plus, what is the plan for seasonal employees hired for holidays?
Thank you for breaking it down, I was curious about how it worked myself. Sounds like its not worthwhile to fool with at all unless you are severely dire straits at present, and/or are willing to gamble on not having to repay.
We have very little information at this point
I would imagine companies that employ seasonal employees probably just opted out
Just wait for someone to get shot and go pick one up for free at your local electronics store. It's all the rage right now.
A lot of people are going to be saddled with a lot of debt between this and the taxes that will be due on unemployment disbursements.