Retro checks
- Thread starter UPSDriver15
- Start date
bleedinbrown58
That’s Craptacular
Yeah really...I fully expect Uncle Sam to take a big, fat bite out of my retro check, but 50%?? C'mon....
upschuck
Well-Known Member
Someone said before that it would be nice to be able to put all of it into your 401(k). I could go for that.
bleedinbrown58
That’s Craptacular
I could use some of it...but I'd be on board with putting 60% of it into my 401k for sure.
brown_trousers
Well-Known Member
Not true. You will end up paying taxes at your normal tax bracket. Unless this retro check shows up as a different line item on your W2, it will be taxed the same as all your other income
Correct in the end your taxes rate is based on your taxable income which is your total income minus deductions....
AlwaysChafed
Well-Known Member
I was owed 1900 from back pay over the course of three months. It was $50-100 over net. You will see. Close enough.
At the end of the year your either owed what taxes where taken out or your going to get a refund. If you have to pay at the end of the year your would have had to pay more if they took less out of that one week check. If you get a refund atthe end of the year you got a bigger one for the extra they took out.
They are not taken extra out and keeping it for sh-ts and giggles you either owe it or you don't....
brownmonster
Man of Great Wisdom
What is the tax rate on the other half?
AlwaysChafed
Well-Known Member
Astro-Glide
AlwaysChafed
Well-Known Member
I'm not talking about in April. We will see.
Bagels
Family Leave Fridays!!!
Yes, for most of us our retro checks will endure a federal tax liability higher than that of our normal checks. But when you file your income taxes, you make the adjustment. Just as if you're a driver who typically earns $80K, but one week you only work 6 hours (got sick, went home early, missed rest of week) -> your federal tax liability on that check will be significantly lower than what you're accustomed to. But when you file your taxes, it's adjusted (you'll pay more). Just as how many low-seniority PTers who typically have 5%-8% of their income withheld suddenly find 20% or more during peak... again, when they file, they'll get this $$$ back.
Your federal income tax liability is determined when you file your taxes. Your weekly paychecks have taxes held just for convenience, they do NOT determine your liability since that'd be too damn near impossible/costly for payroll do do.
Of course, somebody's going to reply arguing with me....
You got any plans for your retro check?
brownmonster
Man of Great Wisdom
Buzz kill.
UpstateNYUPSer(Ret)
Well-Known Member
New sliding glass patio doors, bring a portion of my deck up to code and replace a basement window.
Smart idea putting it into your house. I'm paying off a deferred interest or zero percent financing on some furniture from about four months ago.
UpstateNYUPSer(Ret)
Well-Known Member
Also a good idea to pay off debt but if it is deferred interest or 0% you may be better served to put this money in to a interest bearing account (IRA?).
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