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Why do ppl say it’s not worth it to work more cause tax?
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amother
OP


 

Post Thu, Aug 22 2019, 1:13 pm
I want to work more hours but I’ve hear that if I work more hours I will lose a lot on paying more taxes. Is it true? If yes How do about know what’s the max I could earn without loosing?
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hodeez




 
 
    
 

Post Thu, Aug 22 2019, 1:18 pm
HYS Tax & Accounting Firm 3475892822. He does free tax consultations if you want to call him
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amother
OP


 

Post Thu, Aug 22 2019, 1:30 pm
hodeez wrote:
HYS Tax & Accounting Firm 3475892822. He does free tax consultations if you want to call him

Great thanks
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agreer




 
 
    
 

Post Thu, Aug 22 2019, 2:09 pm
It's nonsense. Work more hours, yes, you pay more taxes, but you also have more money.

The question of if it's worth it arises if you'll have extra expenses due to working longer hours, such as more babysitting etc.

The biggest issue arises when people were receiving income-based benefits and will no longer be eligible when they earn more money. That's what prevents some people from working more.
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amother
OP


 

Post Thu, Aug 22 2019, 2:11 pm
agreer wrote:
It's nonsense. Work more hours, yes, you pay more taxes, but you also have more money.

The question of if it's worth it arises if you'll have extra expenses due to working longer hours, such as more babysitting etc.

The biggest issue arises when people were receiving income-based benefits and will no longer be eligible when they earn more money. That's what prevents some people from working more.

Oh... so it’s not about the taxes but the benefits. That’s what I figured
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thunderstorm




 
 
    
 

Post Thu, Aug 22 2019, 2:24 pm
I don’t receive any benefits. My DH had is salary increased and the entire increase goes to taxes. It’s as if the $1,000 increase he earns never happened. It has to do with where you fall in the income bracket.
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ectomorph




 
 
    
 

Post Thu, Aug 22 2019, 2:53 pm
Very common. Suppose your husband earns 200k. If you ean 45k, you're taxed at 40%. So you have 25k left. That barely covers full time babysitting plus all the costs of working.
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amother
Honeydew


 

Post Thu, Aug 22 2019, 2:59 pm
Where do you work? Which country? In Israel, for example, you are taxed in categories. Everything you earn up till 6k is taxed 10%; everything past that, up until 9k, is taxed 14% and so on. In such a system you will always earn more if you work more, even if the tax on the extra money is higher



הכנסה שנתית הכנסה חודשית (הכנסה שנתית חלקי 12 - לצורך המחשה בלבד) שיעור המס
עד 75,720 ש"ח עד 6,310 ש"ח 10%
75,721 ש"ח - 108,600 ש"ח 6,311 ש"ח - 9,050 ש"ח 14%
108,601 ש"ח - 174,360 ש"ח 9,051 ש"ח - 14,530 ש"ח 20%
174,361 ש"ח - 242,400 ש"ח 14,531 ש"ח - 20,200 ש"ח 31%
242,401 ש"ח - 504,360 ש"ח 20,201 ש"ח - 42,030 ש"ח 35%
504,361 ש"ח - 649,560 ש"ח 42,031 ש"ח - 54,130 ש"ח 47%
649,561 ש"ח ומעלה 54,131 ש"ח ומעלה 50% *
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librarygirl




 
 
    
 

Post Thu, Aug 22 2019, 3:02 pm
amother [ Honeydew ] wrote:
Where do you work? Which country? In Israel, for example, you are taxed in categories. Everything you earn up till 6k is taxed 10%; everything past that, up until 9k, is taxed 14% and so on. In such a system you will always earn more if you work more, even if the tax on the extra money is higher


This is true in America as well although people incorrectly think if they go up a tax bracket, all their money is taxed at that rate.
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amother
cornflower


 

Post Thu, Aug 22 2019, 3:21 pm
You need to crunch the numbers into TurboTax.
If your income goes up you may become ineligible for some tax credits that you were previously qualified for such as the Earned Income Tax Credit.

Then there are benefits you could lose.
Major one being health insurance.
You could end up becoming poorer by working depending on your individual circumstances.
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amother
Honeydew


 

Post Thu, Aug 22 2019, 3:29 pm
librarygirl wrote:
This is true in America as well although people incorrectly think if they go up a tax bracket, all their money is taxed at that rate.


So how could Thunderstorm's dh earn an extra $1000 and have it ALL go to taxes?
Are there other tax issues that make this possible?
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amother
Seashell


 

Post Thu, Aug 22 2019, 4:18 pm
amother [ Honeydew ] wrote:
So how could Thunderstorm's dh earn an extra $1000 and have it ALL go to taxes?
Are there other tax issues that make this possible?

Put very simply, thunderstorm is wrong. As a CPA, this is the number one myth I have seen propagated about and it drives me crazy. If your income goes up and you're bumped into the next tax rate, you only pay the higher tax rate on the marginal amount above the lower tax rate. It is therefore never true that an entire tax increase goes all to taxes.
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amother
Teal


 

Post Thu, Aug 22 2019, 4:50 pm
amother [ Seashell ] wrote:
Put very simply, thunderstorm is wrong. As a CPA, this is the number one myth I have seen propagated about and it drives me crazy. If your income goes up and you're bumped into the next tax rate, you only pay the higher tax rate on the marginal amount above the lower tax rate. It is therefore never true that an entire tax increase goes all to taxes.


Maybe there are other monies going out of the paycheck that have increased and Thunderstorm is lumping it all under 'taxes' and then it feels like nothing bec the amount on the take home pay is so low. I know that personally, as my salary increases, the total percentage taken out for my pension and certain 'elective benefits', increases exponentially.
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mig100




 
 
    
 

Post Thu, Aug 22 2019, 5:24 pm
amother [ Seashell ] wrote:
Put very simply, thunderstorm is wrong. As a CPA, this is the number one myth I have seen propagated about and it drives me crazy. If your income goes up and you're bumped into the next tax rate, you only pay the higher tax rate on the marginal amount above the lower tax rate. It is therefore never true that an entire tax increase goes all to taxes.


This is all true.

Another thing to keep in mind is sometimes tax credits get maxed out over a certain amount of income.
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amother
Lime


 

Post Thu, Aug 22 2019, 5:26 pm
I've gotten a $4,000 raise and ended up with $1,750 actual post tax increase.
It's hard to swallow. $35 extra take home a week instead of the $80 you're expecting.
But still worthwhile since you can work to increase every year slowly. It's the only way to move ahead and not get stuck.
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Mommyg8




 
 
    
 

Post Thu, Aug 22 2019, 7:45 pm
ectomorph wrote:
Very common. Suppose your husband earns 200k. If you ean 45k, you're taxed at 40%. So you have 25k left. That barely covers full time babysitting plus all the costs of working.


I couldn't believe this, so I did the math, and you are right! In New York city your total tax would be around 45% (on the marginal earnings, which means only on the money you yourself earn). If you also have to pay a babysitter you might be left with earning pennies on the dollar. I don't understand how it pays for a woman to work in these circumstances. And I understand even less how they get away with punishing these middle class families in New York city...
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amother
Lilac


 

Post Thu, Aug 22 2019, 8:00 pm
Mommyg8 wrote:
I couldn't believe this, so I did the math, and you are right! In New York city your total tax would be around 45% (on the marginal earnings, which means only on the money you yourself earn). If you also have to pay a babysitter you might be left with earning pennies on the dollar. I don't understand how it pays for a woman to work in these circumstances. And I understand even less how they get away with punishing these middle class families in New York city...


Yup. My accountant just told me this, exactly. He said, I'm not trying to discourage you from working, but, know that a good .40 cents of every $ you earn will go to taxes.

What does this mean for us practically? Instead of paying the yeshivos $x, we'll be paying them $x + a few more dollars. Iow we won't see any practical difference at all. Taxes and tuition are a real double-whammy.
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amother
Teal


 

Post Thu, Aug 22 2019, 8:25 pm
Hence the phrase 'the working poor'.
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chocolatecake




 
 
    
 

Post Thu, Aug 22 2019, 9:01 pm
I know quite a few people that specifically work in schools for this reason. In a school you can have a portion of your salary be qtr and is tax free and every dollar goes towards tuition. You can end up significantly ahead this way even if technically you have a higher salary elsewhere.
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amother
Ivory


 

Post Thu, Aug 22 2019, 9:36 pm
chocolatecake wrote:
I know quite a few people that specifically work in schools for this reason. In a school you can have a portion of your salary be qtr and is tax free and every dollar goes towards tuition. You can end up significantly ahead this way even if technically you have a higher salary elsewhere.


This alot of the teachers in the school I work at have this arrangement
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