Airlines Giving Employees Tax Cut Bonuses

jtrain609 said:
JetBlue is.


How about how many people don't realize that your income is only taxed in the bracket it's made in. As in if you made $25,000, the first $19,050 is taxed at 10%, and then the remaining $5,950 is taxed at 12%.

The number of people who think your entire income is taxed at the higher bracket is astounding.
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Well if they are major pilots and/or have spouses that work they may have a point with the AMT.

Bonuses are typically withheld at 25% and if not subject to the AMT and earning a higher income like a major pilot, you might even end up owing more tax on that money. Crazy as it sounds.

Earned income is taxed an insane amount, it's practically criminal on the higher end.

Same with capital gains, people point to the LT rate of 15% but with enough income it can be pushed to ~25%.
 
wheelsup said:
Well if they are major pilots and/or have spouses that work they may have a point with the AMT.

Bonuses are typically withheld at 25% and if not subject to the AMT and earning a higher income like a major pilot, you might even end up owing more tax on that money. Crazy as it sounds.

Earned income is taxed an insane amount, it's practically criminal on the higher end.

Same with capital gains, people point to the LT rate of 15% but with enough income it can be pushed to ~25%.
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I didn't keep up on the numbers, but wasn't the AMT lower limit raised pretty significantly for 2018?
 
jtrain609 said:
I didn't keep up on the numbers, but wasn't the AMT lower limit raised pretty significantly for 2018?
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Yes but I was assuming you were referencing conversations that happened in the past not the last week or two since it was signed into law :).
 
Almost no company that distributes a "bonus" does it as anything other than part of your wages for that pay period. ALPA (and I'd assume other unions) have gotten pretty good at ensuring it's covered by ATM. The biggest issue is that many HR department's software bases the calculated withholdings for each paycheck as if that's the amount every check will be. So if your normal paycheck is around 5k and then you get a 15k bonus thrown in, they will think you get 20k every check and withhold based on whatever tax bracket that would put you in.
 
BobDDuck said:
Almost no company that distributes a "bonus" does it as anything other than part of your wages for that pay period. ALPA (and I'd assume other unions) have gotten pretty good at ensuring it's covered by ATM. The biggest issue is that many HR department's software bases the calculated withholdings for each paycheck as if that's the amount every check will be. So if your normal paycheck is around 5k and then you get a 15k bonus thrown in, they will think you get 20k every check and withhold based on whatever tax bracket that would put you in.
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And that said, if it's that big of an issue for someone, you can submit a different W4 for that pay period.
 
z987k said:
And that said, if it's that big of an issue for someone, you can submit a different W4 for that pay period.
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Or if you have even a modicum of financial responsibility you can cover your bills just fine and just keep on truckin and let it all wash out at tax time. I hate giving the govt an interest-free loan as much as the next guy, but as far as doing a separate W4 for just one pay period the lazy me wins out.
 
Roger Roger said:
Or if you have even a modicum of financial responsibility you can cover your bills just fine and just keep on truckin and let it all wash out at tax time. I hate giving the govt an interest-free loan as much as the next guy, but as far as doing a separate W4 for just one pay period the lazy me wins out.
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That's my thought. For me it was more about the number of Angry Pilot Phonecalls(tm) that I got after our retro pay was distributed from the last Section 6.
 
Cptnchia said:
Yeah, but after it’s taxed and everyone takes their pound of flesh, you’re looking at what? $400? Not really worth it.
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What do you mean "not worth it."

You mean to tell me if Delta offers you $1000 for free, you'd say no thanks because........ taxes?

Dude..... it's a thousand bucks.

They can say it's because of Trump's tax cuts. Or maybe because they saw an albino reindeer in Fairbanks........ I couldn't care less: it's still a free 1000 bucks.
 
z987k said:
The other one that is always an eye roll is when people say, oh you don't want to make more money because you'll pay more taxes. Someone failed the 3rd grade.
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That's it! Step aside, Mert. This
*&^% havin' hisself an accident.
28616fd6-e9d8-4b1f-8eac-3e497b1e4873.jpg
 
z987k said:
The other one that is always an eye roll is when people say, oh you don't want to make more money because you'll pay more taxes. Someone failed the 3rd grade.
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Yes and no.
Best friend worked a welding job. 5 nights of 10. If he didn't do that 5th day, the difference in the check for the week would be $150, because of the different tax bracket.

He made much more than $15/hour...
 
Cherokee_Cruiser said:
What do you mean "not worth it."

You mean to tell me if Delta offers you $1000 for free, you'd say no thanks because........ taxes?

Dude..... it's a thousand bucks.

They can say it's because of Trump's tax cuts. Or maybe because they saw an albino reindeer in Fairbanks........ I couldn't care less: it's still a free 1000 bucks.
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I went in on an investment property with a retired Delta captain. He puts in about $50k to the deal and we structure it as a loan to my LLC that’s doing the deal. Tells me “don’t pay out any of the interest or principle to me; I don’t want to pay the taxes; just set it aside and I’ll let you know If I ever need it.” Um, okay. So I setup a separate Schwab account and invested his money, and I keep the returns on the float. Pilots aren’t the smartest when it comes to money. :)
 
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Nark said:
Yes and no.
Best friend worked a welding job. 5 nights of 10. If he didn't do that 5th day, the difference in the check for the week would be $150, because of the different tax bracket.

He made much more than $15/hour...
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So, to what was already mentioned....
Lets say if he never worked that 5th day, he made $91,900 AGI or to the dollar the top of the 25% bracket. He'd pay 10% on the first $9,325 (932.5), 15% on the next $28,615 (4292.25) and 25% on the next $53,950 (13487.5) for a total of $18,712.25 in taxes. If he made $1 more and "put him in the 28% tax bracket", he'd only pay $18,712.53 in taxes, or 28 cents more. You're still 72 cents richer. In no way does it make sense to keep the income under 91.9 for tax reasons.

So either the $150 more is wrong or he was only making $187.50 a day and couldn't figure out that if he worked 3 days, his paycheck would also be only $150 less.
 
z987k said:
So, to what was already mentioned....
Lets say if he never worked that 5th day, he made $91,900 AGI or to the dollar the top of the 25% bracket. He'd pay 10% on the first $9,325 (932.5), 15% on the next $28,615 (4292.25) and 25% on the next $53,950 (13487.5) for a total of $18,712.25 in taxes. If he made $1 more and "put him in the 28% tax bracket", he'd only pay $18,712.53 in taxes, or 28 cents more. You're still 72 cents richer. In no way does it make sense to keep the income under 91.9 for tax reasons.

So either the $150 more is wrong or he was only making $187.50 a day and couldn't figure out that if he worked 3 days, his paycheck would also be only $150 less.
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Zach math
 
Cherokee_Cruiser said:
What do you mean "not worth it."

You mean to tell me if Delta offers you $1000 for free, you'd say no thanks because........ taxes?

Dude..... it's a thousand bucks.

They can say it's because of Trump's tax cuts. Or maybe because they saw an albino reindeer in Fairbanks........ I couldn't care less: it's still a free 1000 bucks.
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It’s not worth it for me to get all giddy about it. It’s only 1 large. I can make more just picking up a day turn. Come Feb, I’ll do the Futterwacken when they hand me a bonus check for $50K
 
Cptnchia said:
It’s not worth it for me to get all giddy about it. It’s only 1 large. I can make more just picking up a day turn. Come Feb, I’ll do the Futterwacken when they hand me a bonus check for $50K
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I’m surprised to read this, especially from someone who has been furloughed and gone to $0 income in the same flying job as now. You’re right, you could pick up a 4 hr turn and make that amount. But you don’t have to, that’s the point, the definition of free money. One large is still one large. This thread reads a little defensive on Delta for not getting the $1000 as other airlines are paying out. I think the tune would be different if Delta announced they were giving one large like the others.

And don’t mix profit share, that’s an entirely different thing and calculation. I’m looking at 5 digits too (though no where close to you, and 4 digit amount after taxes).

Does one large change my life, or pay off debt, or used to cover additional stuff from paycheck to paycheck? No. I’m lucky I don’t have those worries. Still, I appreciate free money and one large is still one large.
 
Cherokee_Cruiser said:
I’m surprised to read this, especially from someone who has been furloughed and gone to $0 income in the same flying job as now. You’re right, you could pick up a 4 hr turn and make that amount. But you don’t have to, that’s the point, the definition of free money. One large is still one large. This thread reads a little defensive on Delta for not getting the $1000 as other airlines are paying out. I think the tune would be different if Delta announced they were giving one large like the others.

And don’t mix profit share, that’s an entirely different thing and calculation. I’m looking at 5 digits too (though no where close to you, and 4 digit amount after taxes).

Does one large change my life, or pay off debt, or used to cover additional stuff from paycheck to paycheck? No. I’m lucky I don’t have those worries. Still, I appreciate free money and one large is still one large.
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No money is free.
 
Cherokee_Cruiser said:
I’m surprised to read this, especially from someone who has been furloughed and gone to $0 income in the same flying job as now. You’re right, you could pick up a 4 hr turn and make that amount. But you don’t have to, that’s the point, the definition of free money. One large is still one large. This thread reads a little defensive on Delta for not getting the $1000 as other airlines are paying out. I think the tune would be different if Delta announced they were giving one large like the others.

And don’t mix profit share, that’s an entirely different thing and calculation. I’m looking at 5 digits too (though no where close to you, and 4 digit amount after taxes).

Does one large change my life, or pay off debt, or used to cover additional stuff from paycheck to paycheck? No. I’m lucky I don’t have those worries. Still, I appreciate free money and one large is still one large.
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I read that as "a $1000 check from my employer doesn't come close to sweetening the taste of the crap sandwich that is this tax bill being forced down my throat" but I could be completely off.
 
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