Your current annoyance

[drachefly]

My Christmas bonus got eaten up by Tax. And then some.

No, really. My bonus took my pay juuust over the threshold for me to start having to pay the government back for my university course. And so, my $760 bonus incurred $2080 of additional tax, because the tax burden was calculated over the rest of the year when I wasn't paying the government back.

This shouldn't happen. And I don't mean this in a normative sense, but a 'I think someone screwed up' sense.

[Skitzophrenik]

Happened to a buddy of mine, too. If your income bumps you into a higher tax bracket, you retroactively owe taxes at that rate for the entire tax year, apparently. Sucks.

[Kajin]

I had a teacher in high school who nagged us constantly about that.

[drachefly]

Happened to a buddy of mine, too. If your income bumps you into a higher tax bracket, you retroactively owe taxes at that rate for the entire tax year, apparently. Sucks.

But the tax brackets are marginal rates. There isn't a value you can earn where you get to take home less if you earn more. (ceteris paribus)

[OldCrow]

But there are values where (depending on how your employer assesses and collects payroll taxes) you can suddenly lose a whole bunch of money from your next paycheque because you have to pay all the taxes for the new marginal rate on everything you've earned for the entire year-to-date.

Obviously, this effect would tend to be worse if caused by a Christmas bonus, occurring at the end of the year when the majority of your income has a new rate assessment.

Also, kirby's didn't just involve income tax, but also the re-payment of education subsidies that kicked in when that income line was crossed.

[drachefly]

No, it still doesn't work out. The whole point of a marginal tax rate is that you pay that rate only on the dollars it applies to. A billionaire pays the same tax rate as I do on our respective $30kth dollars. The billionaire pays a higher tax rate than I do (at least in theory) on their $1Mth dollar.

Now, when you're having your taxes deducted from your income, they do it based on expected overall tax, not the tax you've received so far. The effect of this is to flatten it all out so that the tax rate you pay on the literal actual 1st dollar you earn is the same as the $30kth dollar you earn, but this rate is substantially lower than the marginal tax rate on that $30kth dollar. The idea is that you don't accumulate a debt to the government that you'll need to pay at tax time; it should be around even, and with typical deductions, they'll owe money back to you.

If at the last moment it appears that your income has changed and you're in a higher tax bracket, that tax bracket applies to the new income only, just because the tax brackets are a marginal matter. They apply to specific dollars.

Since you're already even with the government, the worst that can happen is that your new income tax withholding rate is raised up to the marginal tax rate on that income. As marginal tax rates certainly never exceed 100% (Yeah, I think that's the far side of the Laffer curve), you should never receive less than nothing from the bonus.

One possible cause for this is if someone mistakenly applied this new marginal tax rate to your whole income. That's wrong. Fortunately, if that's the case, you can take consolation that you're liable to get the excess back as an income tax return, minus of course interest you would have earned. These days, that's not such a big deal...

[weatherwax]

MICE! THERE ARE MICE! MULTIPLE! IN MY APARTMENT!

I've caught one, found another dead, and hear the scritch scritching in the walls. My rats are going wild, and I'm afraid to let them out of their cage. I'm not having my babies catch something from hunting mice.

[kirby1024]

No, it still doesn't work out. The whole point of a marginal tax rate is that you pay that rate only on the dollars it applies to. A billionaire pays the same tax rate as I do on our respective $30kth dollars. The billionaire pays a higher tax rate than I do (at least in theory) on their $1Mth dollar.

This is all perfectly correct, but sadly does not apply in this case. This is not about tax brackets, but additional tax payments kicking in at a particular threshold.

My University education was paid for by effectively a government loan scheme, that states that if my before-tax pay in any given fortnight goes past a certain point (roughly $1750), then the scheme requires that additional taxes be paid equal to a certain proportion of my wage, which then goes towards my uni debt.

Now, for just a single week's pay, that's not a major issue - I just pay a little extra. However, taxes on bonuses are calculated assuming that bonus was averaged out evenly across the financial year, and take my current pay as the baseline into consideration, not my previous pays (sadly, I just recently got a payrise, hence the issue). So, when the tax was calculated, it meant that I effectively have to backpay all those additional taxes.

Because of the rather inaccurate way this has all been drawn up, odds are excellent that I'll get some of this back at tax time, but certainly not all of it. And since I'll be starting on weekend work at the start of the year, I shouldn't have this issues next year, since I'll be making the threshold for uni debt repayment most pays, thus it won't have to be backpaid later on. So yeah, my bonus gets eaten up entirely by tax.

[drachefly]

This is why thresholds like that are stupid. They introduce marginal tax rates like ten million percent on one specific penny of income.

[archnemesis_g]

Since shipping from the Sluggy store was screwed up in October I didn't get a b-day gift. Then an original art auction comes around, and hubby tells me I can bid up to 30 bucks (our budget is tight). I do so and get the max bid on The Shrink Ray. I loose internet at home on Sunday night, get it back this morning, and someone had out bid me. I call hubby at work and beg and plead, and he allows an increase in the bid. I up it to 40 clams. By this point I have 15 min til the auction runs out. I want to jump and sing, "I'm finally getting an original piece of Sluggy art".
The minutes count down, then the seconds. I see victory shining brightly before me.
Yet, just as time dwindles to one last tiny second, another bid comes in a dollar over mine. Then time is no more.

To who ever snatched up The Shrink Ray, put in a nice frame, hang it up with its own spot light, and know you have saddened the heart of a poor sluggite.
To the mods, I'm not whining, just retelling what started out as an adventure, then became an annoyance. So it relates.
To the world at large,
Crotch!

[Jorodryn]

My current annoyance?

My wife constantly promise people that she will get something done or will do something and then tells me. I need you to do this. I know we are married and what not, but I had no part in whatever she promised. She doesn't even consult with me about whatever it is to see if I have time or if I even want to do it. Really gets under my skin.

[caffeine]

I can't get a job!

People told me that there was no work in the UK these days, but I thought this was exagerration from lazy friends, and that I'd be able to get something if I had no standards. But it's true! I can't even get monkey work. I've run an office all by myself for about three years, but I can't get even a receptionist job. No luck with warehouse work, shop assistant - nothing!

The annoying thing is I was supposed to be going to Korea in February, but I haven't got that because my referee is too useless to send in a reference on time. Now I'm just unemployed and homeless. *sob*

[Kea]

Ouch, sorry to hear that. That's way beyond an annoyance, that's life taking a dump on your head. Ngau couldn't get a job all year in the UK while we were there, and my brother's got a farkin' master's degree and all he was able to get was temp work, and even that's drying up because of all the government cutbacks. Hope you can get yourself out of there soon.

[AxelFendersson]

It is not a good situation. I've been unemployed for almost two years now. There's just so little work around.

[chaosman]

My current annoyance is a woman in our office who thinks she is my supervisor. She has been with the company for 25+ years and has applied for both supervisor positions every time one comes open. The company will not promote her due to the high turnover rate for any position that involves someone working closely with her. Management is rightly afraid that anyone working for her would quit. She is currently the dispatcher for the delivery drivers, a job she does well despite her horrendous people skills and vindictive, petty attitude. On occasion she has to give work orders or jobs to guys in the service department because the two departments overlap a bit and because she is petty, vindictive, (and mad that she is not our supervisor like she wants to be) she uses these occasions to try to bully us. I usually handle her BS pretty well but this week, all week, I had to read gas meters which falls under her sphere of control. We use a handheld device to input the meter readings which sends the information back to the home office computers and also has a GPS device enabled. This allows her to sit at her computer and follow along as I do my work and time how often I input information. With this newfound power she has developed a most annoying habit. If I, in her opinion, have not inputed information quickly enough, or take a break, she will call my cell phone to ask "Is the handheld working? I notice you haven't inputted any meters lately." The fact that I am walking in a few inches of snow and have high winds blowing snow in my face apparently is not a good enough reason to sit in the truck long enough to thaw my feet out (ten minutes or so) every couple of hours. Yesterday I didn't get to take lunch until 2:30 and sure enough, at 3:05 she is calling to ask about the handheld to see if it is working. It's bad enough that she considers it so important to neglect her job to spy on me to make sure I am working but the main reason I get so pissed at her is that she really thinks that we are stupid enough to not see exactly what she is doing. If she wants to ask why I am sitting still she should have the guts to just ask. I'll tell her what I am doing. But she really thinks she has us all outsmarted. She also lies constantly about her mistakes and can make any molehill into a mountain. I did get back at her a little yesterday though. After her last call to "check up on the handheld" I feigned great concern about how well it was working and proceeded to call her every ten minutes or so for the next two hours to check if it was still sending the information like it was supposed to. After about nine calls she finally suggested I stop reading meters for the day (it was quitting time but it is fairly normal to work an hour or two overtime this time of year) and go home. I think I made my point and I had the whole service department laughing their butts off about it this morning including my supervisor who is also her department head. Felt good.