TFW: Taxes + SSA = stupid refund sizes

[Revelate]

You try to do everything right to minimize tax overpayment even with 2 jobs.  Bunches of deductions on the W4's, two estimated tax payments to make sure IRS won't get irritated... everything coming up aces and darned close to right on the money.

Except, double the SSA payments, double the fun, hi giant refund, again =/.

I suppose it's nice to get money you weren't expecting but would've rather done something else with that cash during the year than giving the government an interest free loan.  Almost didn't even need to make estimated payments it's so stupidly big.

[iced]

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@Revelate wrote:

You try to do everything right to minimize tax overpayment even with 2 jobs.  Bunches of deductions on the W4's, two estimated tax payments to make sure IRS won't get irritated... everything coming up aces and darned close to right on the money.

Except, double the SSA payments, double the fun, hi giant refund, again =/.

I suppose it's nice to get money you weren't expecting but would've rather done something else with that cash during the year than giving the government an interest free loan.  Almost didn't even need to make estimated payments it's so stupidly big.

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I feel you on the SSA stuff. I capped SSA withholding around September, then we got acquired so new payroll system, thus re-withholding SSA taxes all year. It'll probably add a few thousand to my already 5-figure refund, yay.

I'm on the other side of the boat from you on withholding though. I tend to get what the average person would consider ridiculous refunds ($10,000-$15,000 annually) but I liked having the pad on capital gains so that I could realize stock gains each year without keeping any aside for taxes later. Most years I'm only realizing around $25,000 that way (so around $4,000 in taxes, hence the 10-15 swing), but should I need to grab the sledgehammer and liquidate a lot more, I'd be ready for it come April.

I did finally switch to 0/married withholding instead of 0/single in December and...I'm a little worried. My take-home shifted by almost $800/month by simply going single to married, and when you multiply that by 12 it makes you think that I suddenly went from 5-figure refunds to barely getting a refund.

I'd hate to see what happened if I actually filed to have any allowances withheld like all the docs say I should.

[Anonymous]

I owe $543 Federal which I'm pleased with. Usually receive a bit back from NY and NJ to put towards it. 

My net was $162 owed last year.

[tacpoly]

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@Revelate wrote:

You try to do everything right to minimize tax overpayment even with 2 jobs.  Bunches of deductions on the W4's, two estimated tax payments to make sure IRS won't get irritated... everything coming up aces and darned close to right on the money.

Except, double the SSA payments, double the fun, hi giant refund, again =/.

I suppose it's nice to get money you weren't expecting but would've rather done something else with that cash during the year than giving the government an interest free loan.  Almost didn't even need to make estimated payments it's so stupidly big.

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I was under the impression that you were an independent consultant by dint of you calling your jobs "gigs".  But I assumed incorrectly and you're actually an employee at 2 companies.  So how will the refund work for your companies: 

Scenario 1:  will they just get refunded amounts in proportion to their contribution?  So if they both put in $8239.80 (assuming 6.2% of 132,900 from both jobs), they each get half of the overpayment back. 

Or scenario 2:  will it be based on length of employment?  For example, you were at Job A since January 2019 then started Job B on July 2019 both lasting to the end of 2019.  If you hit the maximum cap in June from Company A, Company B would get their entire contribution back and therefore no refund to Company A.

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@Anonymous wrote:

I owe $543 Federal which I'm pleased with. Usually receive a bit back from NY and NJ to put towards it. 

My net was $162 owed last year.

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We usually try to optimize our tax payments over the year so we don't owe too much; we usually don't get refunds.  Last year was the exception:  because of the new tax regulations taking effect in 2018, we ended up with around $60k back.  

[Anonymous]

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@tacpoly wrote:

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@Revelate wrote:

You try to do everything right to minimize tax overpayment even with 2 jobs.  Bunches of deductions on the W4's, two estimated tax payments to make sure IRS won't get irritated... everything coming up aces and darned close to right on the money.

Except, double the SSA payments, double the fun, hi giant refund, again =/.

I suppose it's nice to get money you weren't expecting but would've rather done something else with that cash during the year than giving the government an interest free loan.  Almost didn't even need to make estimated payments it's so stupidly big.

---

I was under the impression that you were an independent consultant by dint of you calling your jobs "gigs".  But I assumed incorrectly and you're actually an employee at 2 companies.  So how will the refund work for your companies: 

Scenario 1:  will they just get refunded amounts in proportion to their contribution?  So if they both put in $8239.80 (assuming 6.2% of 132,900 from both jobs), they each get half of the overpayment back. 

Or scenario 2:  will it be based on length of employment?  For example, you were at Job A since January 2019 then started Job B on July 2019 both lasting to the end of 2019.  If you hit the maximum cap in June from Company A, Company B would get their entire contribution back and therefore no refund to Company A.

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@Anonymous wrote:

I owe $543 Federal which I'm pleased with. Usually receive a bit back from NY and NJ to put towards it. 

My net was $162 owed last year.

---

We usually try to optimize our tax payments over the year so we don't owe too much; we usually don't get refunds.  Last year was the exception:  because of the new tax regulations taking effect in 2018, we ended up with around $60k back.  

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I want to owe or get back around $100. My tax situation is pretty simple, though.

[iced]

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@tacpoly wrote:

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I was under the impression that you were an independent consultant by dint of you calling your jobs "gigs".  But I assumed incorrectly and you're actually an employee at 2 companies.  So how will the refund work for your companies: 

Scenario 1:  will they just get refunded amounts in proportion to their contribution?  So if they both put in $8239.80 (assuming 6.2% of 132,900 from both jobs), they each get half of the overpayment back. 

Or scenario 2:  will it be based on length of employment?  For example, you were at Job A since January 2019 then started Job B on July 2019 both lasting to the end of 2019.  If you hit the maximum cap in June from Company A, Company B would get their entire contribution back and therefore no refund to Company A.

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This is actually a good question; I never really gave any thought to the employer side of the equation and how that money would be refunded (or if the IRS doesn't cap employer-side so they just end up getting bonus payments).

My best guess, at least in my case, is that my second employer may well receive a refund of all SS taxes paid on my behalf. My reasoning for that is that I capped prior to ever receiving a paycheck from employer 2, so if they look at the timestamps for when each payment was made and assume first-to-pay wins, it would only be logical to do it that way. In effect, this is scenario 3.

If, however, the IRS just divvies everything up proportionately, regardless of when each payment was made, then I would imagine each employer would get a little back and one of your scenarios would kick in.

All I really care about in the end is that I get all of my excess SSA taxes back. I also find it interesting that if you overpay as a result of withholding from a single employer, the employer is responsible for paying you back, but if you overpay as a result of 2 or more employers contributing, then the IRS is responsible for refunding your excess at tax time. That logic might help reveal some of the method to the madness behind the scenes for who's getting what back on the employer side.

[tacpoly]

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@iced wrote:

All I really care about in the end is that I get all of my excess SSA taxes back. I also find it interesting that if you overpay as a result of withholding from a single employer, the employer is responsible for paying you back, but if you overpay as a result of 2 or more employers contributing, then the IRS is responsible for refunding your excess at tax time. That logic might help reveal some of the method to the madness behind the scenes for who's getting what back on the employer side.

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This makes sense.  An overpayment from a single employer is simply a mistake by that employer (i.e. not good monitoring / programming of payroll taxes).  But if there are 2 employers, they wouldn't know about the other's withholding so only the IRS would be aware of the overpayment and therefore has the responsibility to correct.

[Revelate]

I had never thought of the employer side either Tacpoly, interesting question.

Don’t know how it would be answered either.

My calling them gigs might be a little sloppy: almost no-one does 1099 anymore in my world as a result of all the stupid lawsuits whining for benefits (is why we can’t have nice things anymore).

I don’t have any more security and yet none of the tax advantages to being 1099, unfortunate.

[OmarR]

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@Anonymous wrote:

I want to owe or get back around $100. My tax situation is pretty simple, though.

I am with you.

I started an excel tracking spreadsheet of mine and DW's earnings last January. While most people at my work are dying to get their hands on their W2 because they need their money now, I am dying to get my W2 to see how close I came to +/- $100.

https://www.youtube.com/watch?v=dajFGAhoEbU

[Revelate]

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@OmarR wrote:

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@Anonymous wrote:

I want to owe or get back around $100. My tax situation is pretty simple, though.

I am with you.

I started an excel tracking spreadsheet of mine and DW's earnings last January. While most people at my work are dying to get their hands on their W2 because they need their money now, I am dying to get my W2 to see how close I came to +/- $100.

https://www.youtube.com/watch?v=dajFGAhoEbU

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HAHAHA, LOL literally.  Thank you for posting that.

Sadly I'm in this camp unexpectedly this year and will be filing stupid early as a result.  Without the SSA overage I would've been at about -100 and working two jobs and estimated tax payments and changing with-holding in the middle of the year and to come that close: I would've been taking a victory lap.

Got one W2 already, the other employer switched providers on Jan 1 and I can't help but think this is going to get screwed up somehow . 

ETA: Haha, I'm rolling at some of the YouTube recommendations after that... I never would've thought this was a thing, let's see if it can get me out of the recent kpop vortex I've fallen into on YouTube.