I'm figuring out my timesheet for the month. I have 9.5 hours of over time that I can claim as time and a half (1.5 OT). I was just curious if The Man taxes more on 1.5 ovetime? If so, would it be better to claim over time as regular, 1.0 OT? Or is it all taxed the same? Thanks!
2007-10-25 06:10:40 · 13 answers · asked by Due May 17, 2009! 2 in Business & Finance ➔ Taxes ➔ United States
Overtime is taxed the same as regular salary. Taxes are based upon your income bracket not how much overtime hours you work.
2007-10-25 06:14:15 · answer #1 · answered by Calm 4 · 2⤊ 0⤋
Overtime is taxe dthe same as regular pay, but the way this works is once you reach a certain wage level then you tax bracket goes up. So lets say you make $550 a week with no over time and then this week you have 1.5 hours OT then you will only pay regular tax amount for that over time and regular pay, but if you make $1000 a week then you are in the next tax bracket, which means that your earning are taxed at .17% instead of the usual .11% so that overtime you get is still taxed at the regular .17% and so is you base salary but now you are paying a 6% increase in taxes all around.
The object is to make sure that your weekly income is not close to the next tax bracket to start with otherwise you end up paying more total taxes on all you income because the OT put your income into the next bracket.
You would need to ask you employer if they know what the salary break is for wages, if not you can look on your own state tax website and review the listed tax amounts on earning to figure it out.
2007-10-25 06:50:36 · answer #2 · answered by Randy W 5 · 0⤊ 0⤋
-Claim the 1.5 OT.
-7.65% of it will be the same tax rate.
- Your first X amount of dollar will be taxed at regular rate, and extra cash may or may not be taxed higher.
So why the 1.5 ot? Your focus should be on the bottom line, and even with higher taxes, you will make more with 1.5 ot.
Go to paycheckcity.com you can enter all your info and it will tell you how much taxes will be taken out, etc etc
2007-10-25 06:17:34 · answer #3 · answered by girlygurl23 2 · 0⤊ 0⤋
Overtime is taxed the same as if you made that same money as straight time. More will be deducted from your paycheck, since you will make more money, but at the end of the year when you get your W-2, it's just for the dollars you get, not whether or not it was overtime.
2007-10-25 06:40:46 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Working overtime never decreases your take-home pay.
You will take home more money by receiving 1.5 overtime, regardless of which tax bracket you're in or where you are in that tax bracket.
If you're entitled to 1.5 overtime, claim it as such on your timesheet.
2007-10-26 12:30:44 · answer #5 · answered by Plea_of_insanity 5 · 0⤊ 0⤋
At the end of the year, all of your income is taxed at the same rate. Each paycheck is also taxed at the same rate, but if you have a very large paycheck, it could trigger a computer generated increase in your tax rate. At your pay level, that would not happen. The taxes would be the same percentage from all your income.
2007-10-25 06:14:32 · answer #6 · answered by united9198 7 · 0⤊ 0⤋
Taxes are based upon your income. If your overtime kicks you into a higher tax bracket, a little extra tax will be due on the excess over the bracket amount.
2007-10-25 06:17:15 · answer #7 · answered by Bostonian In MO 7 · 1⤊ 0⤋
It's all taxed the same. If you make a lot more than usual on that check, it's possible that withholding will be higher for that one, but in the end, it's all taxed at the same rate, based on how much you made for the year.
2007-10-25 06:14:46 · answer #8 · answered by Matthew O 5 · 0⤊ 0⤋
Claim it all as it is... If it's overtime, list it as overtime. Your percentages withheld will be the same. It's not enough to bump you into the next tax bracket, so it's not a concern.
2007-10-25 06:15:58 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Its all taxed the same. There will be more taxes withheld from your paycheck. However, when you file your tax return, you will either get a larger refund or owe less depending on your own situation.
2007-10-25 11:02:24 · answer #10 · answered by Steve 6 · 0⤊ 0⤋