No tax on overtime question

[The_Jim]

@sigpros An accountant can handle it no problem. Just don't go to HR Block, choose a real accounting firm.

I'm sure turbotax has a tool to handle it too. My wife is a CPA, when she quit working to stay home with kids she reluctantly used TurboTax to e-file our return. She's been impressed with how well it works.

 

[westbranch]

Ok so a little more into this first off my employer doesnt have the totals on the last pay stub of the year. We also don't have a payroll dept here as it is outsourced. What the hang up is the way we get paid overtime isnt normal like other places and here is the best example I can come up with

Lets say my pay rate is $20 an hour. And I work a 12 hour shift

Normal way OT is paid is employee would get paid:

8 hours at $20
4 hours at $30

so when you put the OT it gets divided by 1/3 makes since

How we get paid is we would get

12 hours at $20
6 hours at $20

So when I would use my "OT" it is already at the third rate. So I should be at the max of $25K but it is taking my "third" amount and dividing it by 3 again. I have someone coming over to discuss it today because they redid our pay check form this year but we are still getting paid like this so we will still have the same issue next year. Any thoughts on a solution?

The OT tax deduction was written by congress to be for OT paid under federal labor standards act - FLSA - which is when OT paid for working >40 hrs in a week. OT paid for >8hrs in a day doesn't count.

And the requirement to report it on W2s for 2025 went away. So the IRS has no way to know if the number is correct that people are reporting.

 

[SAJ-99]

This was the first thing that pops into my head when stuff like this comes up.

 

[antelopedundee]

@sigpros An accountant can handle it no problem. Just don't go to HR Block, choose a real accounting firm.

I'm sure turbotax has a tool to handle it too. My wife is a CPA, when she quit working to stay home with kids she reluctantly used TurboTax to e-file our return. She's been impressed with how well it works.

TurboTax is free if you are a member of CreditKarma.com which is also free. They say ANY return. I got suckered in with TT and ended up paying because mine wasn't simple enough. FU*K them, never used them again. AFAIK all of the free services update their software to handle any changes.

 

[The_Jim]

TurboTax is free if you are a member of CreditKarma.com which is also free. They say ANY return. I got suckered in with TT and ended up paying ecause mine wasn't simple enough. FU*K them, never used them again. AFAIK all of the free services update their software to handle any changes.

If its not a basic W2 return you really should go to a CPA. My wife has to get creative with the software to do ours correctly as there are some extras on it. If she wasn't an accountant in her former life it wouldn't work for us.

 

[antelopedundee]

If its not a basic W2 return you really should go to a CPA. My wife has to get creative with the software to do ours correctly as there are some extras on it. If she wasn't an accountant in her former life it wouldn't work for us.

Before he retired my CPA used the professional version of TT. Unless you are doing a business return, I see no reason to use a CPA.

The main thing I don't like is that they make doing K-1 income more complicated than necessary. For me it's hard to just skip through some of that stuff.