- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
3
Posted on 12/2/22 at 10:27 am to Im4datigers
quote:
Not my bank/ADP. I literally take home 40%-45% of my gross bonus every year after 401k contribution and taxes. It’s sick.
I manage HR for a bank and like the other poster said, unless you make $1M/year that doesn't make a whole lot of sense. 401K aside, bonuses should be taxed at the supplemental rate of 22%. Keep in mind, this is FITW tax only. Your bonus is also going to be subject to 6.2% SS tax (up until you've grossed $147K), and 1.45% for MED.
On the 401K, contributions still come out but employers don't typically match on bonus payments. You can also "turn off" your 401k contributions if you know when the bonus will be paid out. You would need to get with your HR/payroll department to let them know a few days in advance that you want to either change your contribution percentage or turn them off altogether. Then pick it back up after the bonus has been paid. Downside to this obviously as well since you then are exposing more of your bonus amount to taxes but your bank account will see more of the funds.
Even in the unlikely event that you're correct in that you net 40-45% of your gross bonus payment, it only goes to help you in April. You're much more likely to receive a tax refund at that point. The downside then is that the govt has been holding a surplus of your money interest free (albeit for just a few months).
Lastly, you can always change your W4 to reflect normal FITW on bonus payments. Employers have to grant employees the ability to change their W4 at anytime throughout the year. Keep in mind, though, that doing so is going to change your tax bill.
This post was edited on 12/2/22 at 10:32 am
Posted on 12/2/22 at 10:29 am to WaWaWeeWa
quote:
Why is everyone saying to contribute to the HSA? What if he doesn’t have any medical expenses.
Because you can also elect to have your HSA funds invested. That's one of the "triple-tax" advantages. HSA administrators vary on how much cash you need to have in the HSA before you can elect to have funds invested, however. Ours is $2k. If at anytime the medical portion of the HSA funds fall below the $2K threshold, it will sweep funds from the investment side to get you back to the minimum.
Posted on 12/6/22 at 9:41 am to Havoc
quote:FIFY.
Cocaine and hookers
When a decision becomes too difficult, or if all else fails, go with above option.
This post was edited on 12/6/22 at 10:46 am
Posted on 12/6/22 at 10:44 am to Havoc
1. Just take the tax hit.:/
2. Put large amount into 401k as pre-tax, but won't we still pay taxes down the line when disbursement is made?
3. Cocaine.
1. Can do this, request that payroll sets a one-time special withholding rate equal to your highest marginal rate for the year.
2. Limited to the amount you can contribute based on income and max annual cap. May not be able to contribute if at all.
3. Cocaine would be purchased with after-tax dollars.
Try scenario 1.
2. Put large amount into 401k as pre-tax, but won't we still pay taxes down the line when disbursement is made?
3. Cocaine.
1. Can do this, request that payroll sets a one-time special withholding rate equal to your highest marginal rate for the year.
2. Limited to the amount you can contribute based on income and max annual cap. May not be able to contribute if at all.
3. Cocaine would be purchased with after-tax dollars.
Try scenario 1.
Posted on 12/6/22 at 11:06 am to WaWaWeeWa
quote:
Why is everyone saying to contribute to the HSA? What if he doesn’t have any medical expenses.
He will at some point. Everybody does. Save the receipts and use them to make withdrawals tax free in the future.
And as the poster above said, the triple tax benefits make the HSA a fantastic investment option. Plus, they’re portable.
Posted on 12/6/22 at 11:31 am to WaWaWeeWa
quote:
Why is everyone saying to contribute to the HSA? What if he doesn’t have any medical expenses.
At 65, you can withdraw funds for non medical and it counds as income like a trad IRA. If the rules stays the same, medicare premiums is a valid medical expense which most will have.
Page 2 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News