At what point is it not worth working?

[Ethan1]

Originally Posted By: czbrian
Originally Posted By: Kestas
I discovered that not only was the extra money taxed, but it would bump up my tax rate, so all the other money was taxed a bit more.


No. That's not how it works. Only the incremental income is taxed at the higher rate.


HTF do so many people not understand this?!

 

[Rolla07]

Originally Posted By: Number_35
Otis24, when I was working a lot of OT, I found I was too busy to do my car & house maintenance & repairs myself, meaning I wasn't that much farther ahead. Sometimes it's better to control spending than to have more money coming in. Plus, they can't tax what you're not earning (income tax) or spending (consumption taxes).


+1, well said.

 

[Rolla07]

If your wife's business shows a loss every year why doesnt she quit that and get a part or even FT job? And cut out your 3rd job. Spending 70 hrs a week working is not worth it. I realize everyone is in a different situation and circumstance but if you need 70hrs to just make ends meet..thats rough. Hope you figure it out

 

[Rolla07]

"The first job is 40/hrs per week and has retirement and other benefits. The second job is 15 hrs per week (sometimes less) and pays 65% of job one. To make ends meet I work a 3rd job, averaging about 15 hrs per week. The third job grosses me about $5500 per yr."

Trick question: How much does Otis earn on his first and second job if he makes 5500$ on his 3rd job?

LOL..Reminds me of those math brain busters!

 

[OneEyeJack]

You're smart to be aware of the tax implications of overtime. With all the new arrivals to support, paying our taxes is very important. We must continue to do our part if the welfare system is to continue to grow.

This is why the only thing I will ever finance is a home and then only if it makes financial sense.

 

[Lyman]

Originally Posted By: OneEyeJack
With all the new arrivals to support, paying our taxes is very important. We must continue to do our part if the welfare system is to continue to grow.
Are you being cynical or serious? I sure hope you aren't serious.

 

[raytseng]

Usually the scenario goes that you are paying some other so you can work.Like paying for child care so you can work. Then you can validly say that you would save money by quitting your job since you don't have to pay for child care if you do it yourself.

Without that type of scenario; then it's just that you don't feel your pay for your hours from the 3rd job is worth it.
If the time spend has no cost involved, then the 3rd job should result in income.

I think you have a misunderstanding if you are only judging the 3rd job based on how it affects your yearly tax "refund".

That just means your tax allowance withholdings are not setup right on one of your jobs, and one of your jobs is setting aside too much or perhaps another is setting aside too little.

In an optimal case, One should have a tax refund of $0 for the tax year. If you have a refund, that just means you gave Uncle Sam an interest free loan.

If your tax refund changes, it doesn't mean that the third job is earning category of dollars different compared to the dollars from the 2nd job.

 

[EdwardC]

Originally Posted By: Ethan1
Originally Posted By: czbrian
Originally Posted By: Kestas
I discovered that not only was the extra money taxed, but it would bump up my tax rate, so all the other money was taxed a bit more.


No. That's not how it works. Only the incremental income is taxed at the higher rate.


HTF do so many people not understand this?!


Agreed!!


So, to answer the OP's question, I'm pretty sure it is impossible that you'll have more money by not working the 3rd job. At worst, say all of that $5500 is taxed at a higher tax bracket, you'll pay a higher percentage in taxes for that amount only. Hypothetically, say your first two jobs add up to exactly $90,750, all of that money is in the 25% tax bracket (still graduated, it is NOT all taxed at 25%). That last additional $5500 is taxed at the 28% bracket, so you'll get less of the $5500 than the previous $5500.

 

[splinter]

Originally Posted By: otis24
I work 3 jobs...Tired of being penalized for trying to better myself and take care of my family.

You, sir, have my sincere respect and admiration.

It took me several years to earn a substantial income after starting my own business at 40.
Most challenging and quite literally one of the best things I could have done for me and my family.

If you haven't already, get with a sharp CPA (or tax attorney) for an hour or three to help arrange your affairs to minimize the tax bite.
Depending how it's structured her losses could offset some of your taxable income.

Some on my businesses and investments are winners and some are not.
Fortunately we always have enough left over to live on bookkeeping notwithstanding.

I pay my "fair share" but giving away half for bombs and other families' diapers goes with the territory.

 

[dlundblad]

3 jobs and 70 hr weeks. I dont have a word for this, but I respect you Otis.

 

[OneEyeJack]

Originally Posted By: Blkstanger
Originally Posted By: OneEyeJack
With all the new arrivals to support, paying our taxes is very important. We must continue to do our part if the welfare system is to continue to grow.
Are you being cynical or serious? I sure hope you aren't serious.


The overall welfare system with EBT cards and other expenditures has more than doubled in 6 years according to government figures. The border is an open gate. Our government refuses to enforce laws on the books to deal with these problems. So who do you think is paying the bills?

We have illegals living in the canyon behind our warehouse and we can not get the police or the government to remove them. They use the area for their toilet and trash can. They have EBT cards and go to the local grocery stores where they take a 50% cut to purchase beer and cigarettes. We have to clean up the back parking lot every morning and still nothing is done. We are told that if we so much as approach their living area we will be arrested. It makes you feel like you're working during the day so they can get drunk at night with our tax money. Our tax money is being wasted by politicians that are nothing but talking bobble heads.

 

[daves87rs]

I am fighting to earn more myself, but I do not plan to upgrade our lifestyle much. We have learned to live without quite a bit, so most will be saved and used to enjoy a few simple things like vacations....

 

[jetmech1]

Hi Otis,

I would normally make this a PM, but thought that others who may be doing this same thing should see it also. So, I'm making it public.

I don't often join the conversation, but I hope you read this. It's a perspective I didn't see as I was scanning through the replys.

I don't know your age, but I did the same thing as you. I am now 61 years old. When I was 28, I had my first back surgery. At 52, my second. In between that time I had to have 2 hernia surgeries and rotator cuff surgery on both shoulders. After back surgery #2 I had a major heart attack and a quadruple bypass. I was back to work 10 weeks later. In 2008, a fall on some ice (it wasn't even a hard fall either) resulted in lumbar surgery #3 and another heart attack a few weeks later. Fortuantly a stent was all that was needed. They put me out to pasture and Social Security Disability is now my income. I absolutely despise it too. I live in constant pain and would give anything to be able to go back and redo almost everything differently. Sometimes I fight severe depression.

As some have already said, get out of debt. Live simply. Make every minute count because you can't get them back.

There's an old saying: "You can work hard, or you can work smart". I obviously didn't work very smart.

To all who read this; I didn't go into all this for sympathy or anything else. It is what it is.....I saw this OP's post and wanted to let him know one of the real downsides of this kind of schedule. Even if his job(s) aren't that physical in nature (like my occupation was), No one can sustain that kind of schedule for very long. You also can't go back and recapture the time lost either. Good Luck!

Mark

 

[otis24]

Originally Posted By: Ethan1
Originally Posted By: otis24
Its just sad that I can be potentially better off by working two jobs than I can by working three jobs because of our tax system.


What part of our tax system are you referring to? That doesn't make any sense...


The part that taxes income. We should no punish productivity. I'm all for the FairTax. If I make $40k per year, but have to work three jobs to do that, the IRS doesn't care. All they look at is how much income I made. Someone else who chooses to work one job and collect gov't assistance is better off. They could choose to work an additional job to support themselves but find it easier to work one job and let the gov't support them. I live in an area where you see this all the time. People who routinely receive free medical care, housing assistance, heating assistance, and get $9k per year in Earned Income Credit. Shouldn't it be called UNEARNED Income Credit?

 

[Mr Nice]

Otis,

You are a good father, husband and provider for your children....
It's folks like you that get penalized for doing the right thing.
Our country is headed in the wrong direction and the USA will end up like Greece in 20 years at this rate.

OneEyeJack,
Unfortunately I agree 100% of your posts about EBT, SNAP, WIC, food stamps, Section 8 housing, ...etc....

 

[eljefino]

Originally Posted By: raytseng

That just means your tax allowance withholdings are not setup right on one of your jobs, and one of your jobs is setting aside too much or perhaps another is setting aside too little.



Yeah this. Also a common trap is if you work 10 hours of overtime one week, they withhold it like you're working an extra 520 hours all year. But if you then don't get more overtime your bracket "settles back down" and you get more refunded.

OTOH working multiple jobs means employers don't know what the others are doing and the withholding goes crazy.

With the wife not pulling in money, and writing off business expneses, you should settle into a reasonable bracket for "married filing jointly".

But to answer your question, drop the third job.

 

[turtlevette]

Originally Posted By: eljefino

OTOH working multiple jobs means employers don't know what the others are doing and the withholding goes crazy.


No, you tell the employer how much to withold when you fill out your w4. It has a worksheet. You can claim as many dependents as you need to balance your payments so that witholding is not excessive. I used to claim something like 10 even though I had no kids.

Taxes are not magical or hard.

 

[surfstar]

Minimize expenses.

Make a budget. Go through it over and over and see where you can cut excess expenses. Internet/TV/cell phones are usually easy to start with. Eating out is another one.

You shouldn't have to work 3 jobs in a low cost of living area to "get by". You're depriving your family of your time, yet you think you're "providing more" for them.

 

[Mr Nice]

turtlevette,

Is that breaking the law, stating you have 10 kids just to bend the IRS rules ?


Otis,
I agree you need time with your family.

 

[andrewg]

Otis...you seem like a good man and a very hard working provider. But if something isn't working, as you know, change is in order. That change may be unpleasant (moving, having the wife cease her unprofitable business and get a regular job). That's life...sometimes we can't always live how and where we'd like. Other places do exist equally as safe as South Dakota and have better employment opportunities. Families have been moving and adapting out of necessity since the beginning of time. Humans adapt (the kids) and often thrive. It's the parental upbringing that matters most...not the geography.
Just my opinion....my hat is off to you for doing the best you can. I wish more people were like you. Our nation would be far stronger.