Work & no eligibility for govt programs? Or no work & get it

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STovah

Mon, Mar 15 2021, 7:53 pm

amother [ Silver ] wrote:

Something else: There is a quirk in how bonuses are withheld. The withholding assumes you get that bonus every week like it's your ordinary salary, so it's withheld at the higher rate.

But when you go to actually file your taxes, it is figured out again by your total income, and your overpayment is refunded. We don't always realize this, because tax time is so complicated. My husband used to get a substantial portion of his pay as a bonus, so we dealt with this. .

Please have your husband speak to his payroll department. Every payroll processor or software I have encountered in the last decade has the option to calculate withholdings properly on a one-time payment.

amother

Ivory

Mon, Mar 15 2021, 7:54 pm

Amarante wrote:

Are you making more than $400,000? Because that is the income level which might have an increase - and that would be generally adjusted gross - e.g. actually taxable income after deductions.

If you make more than $400,000 and have trouble buying food for Pesach, you might take a look at your budget.

Over 400k today.... tomorrow they will raise my taxes as well.

STovah

Mon, Mar 15 2021, 7:57 pm

Regarding 401ks - if you are not self-employed I’m pretty sure you don’t have access to a self-employed 401k plan. You can put money into a traditional IRA but the contribution limit is significantly lower than a 401K. If your employer matches, then using the 401k is a no-brainer. If there’s no match, and you would only put away $5k, then consider an IRA if the 401k you are offered has poor or expensive investment option.

Amarante

Mon, Mar 15 2021, 7:58 pm

amother [ OP ] wrote:

so who would be able to advise re all the options how to get paid etc. [1099 or other/401K/best company benefits etc.]
I'm thinking mesilah counselors may not be qualified.
Is it an accountant? a tax expert?

You get paid through a 1099 if you are not an employee and that is a legal definition. It is illegal to classify an employee as an independent worker and it is generally not beneficial to the employee. You are then responsible for all FICA for starters.

Honestly you only start to compare company benefits when you already have a good job with benefits. Then if you are offered another job, you compare the entire compensation package to see if it makes economic sense. And you throw in some intangibles that relate to non economic,ic benefits like commute, type of work etc.

amother

Aqua

Mon, Mar 15 2021, 8:01 pm

In real life, do you know anyone who lives just on minimal income + government programs, with a large family? I don't know anyone like that. In all these cases, they supplement with other sources of income that are not factored into govt programs, vihamaivin yavin

amother

Puce

Mon, Mar 15 2021, 8:06 pm

Regarding the unemployment exclusion- I think if you make just above 150k it might be worthwhile to put some money in an ira before April 15th. The IRS hasn't issued final regulations yet but I would wonder if it might be something worth looking into.

amother

Tue, Mar 16 2021, 5:22 am

amother [ Aqua ] wrote:

In real life I'm stumped as to how some people make ends meet and social norms dictate I don't ask people how they stay afloat financially. Both me and my husband don't have the kind of relationships with people irl whom we can ask those questions and get real answers

amother

Tan

Tue, Mar 16 2021, 9:44 am

I’m in my mid 40s and the few people my age who are still trying to get by on programs are really having a hard time, Hashem should help. Expenses snowball once your kids get older. So you need a reasonable career path which will iy”H allow your income to rise nicely. My dh started out making $21,000 in his late 20s and is now b”H making $110,000 (we live OOT so that’s a decent salary). I work part time due to my kids but my hourly rate has tripled over time. We’re so grateful to Hashem. We’re able to cover our expenses and have modest savings. We’ve been able to pay for seminary and yeshiva. We’ve been able to pay for tutoring for our child who has learning disabilities and needs lots of help with kriah and gemara. We’re able to buy each kid a new outfit for YT. We’re able to buy Jewish books and magazines. We occasionally go on simple vacations. We don’t live extravagantly and we have to watch expenses carefully, but we’re very grateful to be able to live differently than a few of my friends who rely on programs. These friends have limited choices. They don’t have access to money that they get to decide how to spend. They turn to family for help when they make simchas or chv have unexpected things come up. That help comes with complications and painful family dynamics, because when you ask people to finance your simcha they feel entitled to give their opinions about your life, your spouse, your kids. And once the kids have all left the nest, what is life going to look like? We want to be able to help our adult children. We want to be able to travel a little. We want to be able to spoil our grandkids a bit. We want to have options. Our friends who don’t have much of an income have limited options and choices, and the older you get the more clear that becomes. One other issue is that some of these friends’ kids are ashamed of their parents. I see this more with boys than with girls. Boys don’t look up to their father for being dependent on government programs and having limited options. Boys want a male role model who’s taken care of his family.

I just want to add that what I wrote should please Hashem not create an ayin hora, I explained what I did in order to help op understand a long term perspective and not to make anyone feel bad chv. We’re so thankful to You Hashem for blessing us with enough. Please Hashem give a yeshua speedily to everyone in klal yisroel that needs more parnassah, and may all of us who have nisyonos in other areas be zoche to a yeshua very soon.

watergirl

Tue, Mar 16 2021, 9:49 am

amother [ OP ] wrote:

It's pretty simple. People who claim to live ONLY on programs and have very minimal income, yet live in an expensive area, keep up with neighborhood "norms", make simchas like "everyone else", pay tuition and camp tuition... they are either maxing out credit card after credit card and panicking late at night because they have no way to pay them, their credit is tanking (which means they will soon no longer be able to take out more cards), and they are truly sick over the mess they are in. OR, they are borrowing from everyone who will lend them money and never have a pay-back plan, OR they are earning off the books.

amother

Oak

Tue, Mar 16 2021, 10:17 am

watergirl wrote:

OR, they are living off charity. That’s what my in laws do. They are on hud, they marry off a kid every 2 years with the help of the local hachnossas kallah, and they have family members who give them regular handouts.
Although to be honest they may be earning off the books as well.

amother

Tue, Mar 16 2021, 10:24 am

So there really is no magic wand. I hear you.
the responses here have been very informative and I thank each and every one of you

amother

Purple

Tue, Mar 16 2021, 10:49 am

amother [ Oak ] wrote:

Was going to say this. They either have family help or people collect for them. And to be honest, even middle class frum families who are not eligible for programs do the same.

amother

Purple

Tue, Mar 16 2021, 10:52 am

amother [ Tan ] wrote:

Thank you so much for saying this! I'm in a similar position as you are, and what you wrote is extremely accurate.

My friends' parents who were living on programs all the years are now, that their children have grown up, living off money their children are giving them. It's a horrible place to be and I hope be'ezras Hashem never to find that necessary.

amother

Cyan

Tue, Mar 16 2021, 11:18 am

amother [ Aqua ] wrote:

Such as?

amother

Silver

Tue, Mar 16 2021, 2:59 pm

STovah wrote:

This is no longer an issue for him.

But a previous poster was claiming that her bonus was being taxed at a huge rate, which may mean it's not being withheld correctly. If it is, that would mean her salary is very high.

amother

Forestgreen

Tue, Mar 16 2021, 4:43 pm

amother [ Silver ] wrote:

I may be the poster.
My understanding is that my work pays like 1/2 my taxes on my paycheck. When I get a bonus I have to pay all the taxes on my bonus.

Amarante

Tue, Mar 16 2021, 6:29 pm

amother [ Forestgreen ] wrote:

I may be the poster.
My understanding is that my work pays like 1/2 my taxes on my paycheck. When I get a bonus I have to pay all the taxes on my bonus.

You need to clarify with your employer because generally an employer doesn’t pay taxes because thst would be considered to be taxable income. There are some unique circumstances in which amounts paid are grossed up so that total amount paid is a figure that includes taxes but that is not done in normal employment situations. I have only seen it done when I worked on contracts for people employed outside the US and so there were provisions that covered any excess foreign taxes paid.

What is true is an employer pays 50% of FICA whereas a self employed person or one who gets a 1099 pays all of it including the so-called employer’s share. That is one reason why many employers wrongly classify people as independent consultants because it is cheaper and they also avoid paying other benefits like unemployment, health care, vacation.

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