No tax on overtime?

[BackInTex]

The "Big Beautiful Bill" is another example of complicating the tax code and payroll processing, and perhaps even employee retention.

Per the bill:

This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).

We have lots of folks who work OT and as a reult exceed the $100,000 gross income cap. What this may encourage is workers to jump ship prior to hitting $100k and go work for a competitor. Or for those devious employers who have multiple legal entities (we do, but aren't devious, yet), shift employees back and forth so no single W-2 exceeds the $100k.

[jarnon]

The "Big Beautiful Bill" is another example of complicating the tax code and payroll processing, and perhaps even employee retention.

Per the bill:

This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).

We have lots of folks who work OT and as a result exceed the $100,000 gross income cap. What this may encourage is workers to jump ship prior to hitting $100k and go work for a competitor. Or for those devious employers who have multiple legal entities (we do, but aren't devious, yet), shift employees back and forth so no single W-2 exceeds the $100k.

The IRS gets all your W-2s and adds them together to determine adjusted gross income. Some finagling is possible at the end of the year to move overtime pay to the following year. This is a rare example of the GOP imposing an income limit on a tax break. If they did that with all the tax cuts, the bill would sail through Congress.

[flockofseagulls104]

I oppose what trump is doing as per taxes. It is too complicated as it is. If we are going to revamp the tax system, let's go full field and do a Fair Tax type system.

[BackInTex]

The "Big Beautiful Bill" is another example of complicating the tax code and payroll processing, and perhaps even employee retention.

Per the bill:

This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).

We have lots of folks who work OT and as a result exceed the $100,000 gross income cap. What this may encourage is workers to jump ship prior to hitting $100k and go work for a competitor. Or for those devious employers who have multiple legal entities (we do, but aren't devious, yet), shift employees back and forth so no single W-2 exceeds the $100k.

The IRS gets all your W-2s and adds them together to determine adjusted gross income. Some finagling is possible at the end of the year to move overtime pay to the following year. This is a rare example of the GOP imposing an income limit on a tax break. If they did that with all the tax cuts, the bill would sail through Congress.

You are correct. I mashed up the language that states a 20% limit of total comp per employer.

[Weyoun]

Doesn’t seem to make a lot of sense to me. I suggested, I think it encourages a lot of behavior, trying to sneak things fast the government also it’s going to be hard to keep track of. Same deal with the tip situation I think.

Aside from the fact that tips already were more complicated to deal with, so maybe we should move away from them, why this job and not others? Why does working in the service industry me and you get a tax break, but you don’t know if you’re a teacher or a nurse?

A tax break for Social Security makes sense since it reflects something already taxed.

But you’re getting a tip for work, and every other kind of work it gets taxed.

I was at a restaurant the other day. Cash only, of course. They were joking that they should make everything based so they could avoid paying taxes. Thanks, guys. I’m guessing if they tornado tour through your restaurant, you would expect FEMA to help with the cleanup still.