Suspend Payroll Tax thru 2020 ?

[foszoe]

That's kinda my point.

We don't KNOW what he meant, it can be interpreted in different ways and until the meaning is clarified....well, it's hard to say it's "flat out false" without at least tacitly admitting to a bias.

Again, I believe he was talking about extending (and terminating) this temporary payroll tax suspension/deferral. However if one can show where he said he intends to permanently eliminate payroll taxes and defund Social Security and Medicare, instead of providing their interpretation of what he meant, then I'll be open to having my mind changed. I've not seen a quote nor heard a sound bite of him saying that however. Simplest explanation of why he "remained silent" on it is that he simply did not mean that.

 

[phylodog]

“ The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.”
“The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”

POTUS does not have the authority to forgive the "debts" owed by suspending the taxes temporarily. He has asked the SOT to try and find a lawful means of forgiveness.

 

[MCgrease08]

I am really not comfortable with .gov giving me any type of "loan" I did not request, interest free or not. If payroll taxes ultimately do have to be paid back then this entire thing is going to go sideways for a lot of folks real quick when the "loan" is called in.

Also, if POTUS is able to remove a tax via executive order, does that mean one could impose a new tax via executive order? This is what scares me the most about crap like this.

 

[DoggyDaddy]

“ The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.”
“The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”

POTUS does not have the authority to forgive the "debts" owed by suspending the taxes temporarily. He has asked the SOT to try and find a lawful means of forgiveness.

Now that wording is also interesting. "Shall be made available" sounds like one could choose to opt in or opt out. In other words, you could choose to carry on, business as usual, OR elect to have your taxes deferred. I'd like to see clarification of that too.

 

[openwell]

I am a CPA and have not read the Executive Order ;however, I have watched President Trump's press conf.

for persons earning $ 100,000 a yr. or less :

some basics in payroll taxes.....
6.2% of your wages are withheld as Social Security Trust Funds (your saving).
1.45% of your wages are withheld for Medicare Trust Funds (used for Medicare as needed).

Total is 7.65% of your wages is the amount your paycheck will Increase effective back to August 1st.

Your withholding elections for Federal INCOME TAXES vary by how you file your W-4 with your employer.
If these are deferred you will also get that amount Increase in your pay. Pres. Trump is saying he will waive the TAX liability on wages deffered as if Jan. 1, 2021

So you will have your pay from Aug. 1 until Dec. 31.
You will get an pay raise of 7.65% and not owe any FEDERAL tax getting that amount each paycheck that would otherwise would be held an shown on your W-2.

good news......your get to keep your money instead of getting a tax refund by filing your 2020 Tax return in 2021.

more info to come....

also, does not affect your Indiana state taxes...... I don't expect gov. or any of legislators to do anything.

 

[openwell]

the power for President Trump to

do this is explained in this:

https://mobile.twitter.com/christianllamar/status/1292231148613976065

I am still reading & learng

so bear with me.

many thanks

 

[4651feeder]

...Pres. Trump is saying he will waive the TAX liability on wages deffered as if Jan. 1, 2021....more info to come....

Are you saying it would be within the President's sole power to waive that tax liability or would he need the cooperation of Congress?

 

[openwell]

Are you saying it would be within the President's sole power to waive that tax liability or would he need the cooperation of Congress?

from what I am reading Pres. Trump intends to waive with the power congress gave the President back in 1997..... see link above.....

of course more info to come.....

 

[foszoe]

They waived payroll taxes after 2008, I think for awhile.

 

[Cameramonkey]

Yeah, I would be interested to hear what that's going to do. To me, "suspend" means stop collecting them for awhile and start collecting them again at some future date. "Defer" means that they'd stop collecting them for awhile but then they'd eventually collect the amount that would have been withheld.

I also wonder what that would do come tax time next year. Let's say somebody is making $50K per year, but then they "suspend" withholding, such that they only collect enough to account for $30K worth of that income. Will that person be taxed at the $50K rate come April (or whenever it ends up being), or would they be taxed at the $30K rate? If at the $50K rate, then that seems like a "deferral". If at the $30K rate, then that would be a "suspension" (in other words the extra income would literally be tax-free). That seems like an accounting nightmare, not to mention what it could mean to someone finding out that instead of a refund, or perhaps owing a small amount, they could be hit with a tax bill for the amount that would've been withheld but wasn't.

My understanding is only congress can forgive it, indeed. He can just temporarily stop withholding it. But we will still owe it.

For simplicty sake, say you should have $4,000 in taxes kept out per year. The final quarter he doesnt withhold due to the EO so only $3,000 is taken for Q1-Q3. Come April 2021 you'll still owe that last $1,000 because its still owed, just not taken out. Thats if I read all this correctly. (I could be wrong)

So folks that "do it wrong" and give the treasury an interest free loan and get back a large refund, they'll just not get a refund. Those of us that properly withhold and end up either owing or receiving ~$200 each year will get screwed. (assuming we dont save it ourselves because we know its likely the IRS will still want their pound of flesh)

Sounds like it might be prudent for me to adjust my direct deposit to deposit extra funds into savings that would have normally been withheld for taxes.

I would.

 

[openwell]

They waived payroll taxes after 2008, I think for awhile.

nope. this will be a new thing....

unclear what happens since that 7.65% is money that is associated with social security Trust Funds all your life.

If there is $0 in there for 6 months or a year ......the gov't is going to have to print money to cover it.....

 

[BugI02]

That's kinda my point.

We don't KNOW what he meant, it can be interpreted in different ways and until the meaning is clarified....well, it's hard to say it's "flat out false" without at least tacitly admitting to a bias.

Consider that what he meant was 'I need to get congress off their collective asses and break the deadlock on further aid', but he can't really come out and say like that and still have it work

Keep calm and carry on with the rush to judgement, laddies

 

[BugI02]

I would guess that if the inevitable court challenges result in him being able to do this, even if he doesn't get re-elected the pressure on Biden and the Dems to also forgive the deferred withholding would be enormous. I think it will play out the same unless stopped by the courts. As mentioned above, I don't think Trump is particularly married to this idea. I think he sees it as a stopgap he might be able to do, but I would wager he is hoping that it will push congressional negotiations on stimulus off the current sticking point with the onus definitely on the Dems because Trump tried to do something and they won't let him (provided the Reps aren't stupid enough to be the ones who file the court challenge). Pretty classic squeeze play

 

[openwell]

the power for President Trump to

do this is explained in this:

https://mobile.twitter.com/christianllamar/status/1292231148613976065

I am still reading & learng

so bear with me.

many thanks

this needs to be Repeated for some of

the really fast readers whooooo skip over something with a link.

Pres. Trump is giving Americans some relief that he has the authority to do....

and yes it should push dems back to bargining table with some respect.....

almost dead silence on this from crazy nan & cryin chuck tells you they are in a bind........and as the late Charlie Daniels would say........way behind........lookin to make a deal

 

[foszoe]

Either after 9/11 or the 20008 debacle, they reduced payroll taxes for awhile.

nope. this will be a new thing....

unclear what happens since that 7.65% is money that is associated with social security Trust Funds all your life.

If there is $0 in there for 6 months or a year ......the gov't is going to have to print money to cover it.....

 

[foszoe]

We are talking payroll taxes though not income tax, which is what I THINK you are talking about or at least conflating. FICA gets paid until you make more than ~130000$/year. Medicare is taken out the entire year..

My understanding is only congress can forgive it, indeed. He can just temporarily stop withholding it. But we will still owe it.

For simplicty sake, say you should have $4,000 in taxes kept out per year. The final quarter he doesnt withhold due to the EO so only $3,000 is taken for Q1-Q3. Come April 2021 you'll still owe that last $1,000 because its still owed, just not taken out. Thats if I read all this correctly. (I could be wrong)

So folks that "do it wrong" and give the treasury an interest free loan and get back a large refund, they'll just not get a refund. Those of us that properly withhold and end up either owing or receiving ~$200 each year will get screwed. (assuming we dont save it ourselves because we know its likely the IRS will still want their pound of flesh)


I would.

 

[openwell]

Either after 9/11 or the 20008 debacle, they reduced payroll taxes for awhile.

Pres. Trump is dealing with FICA & Federal Income Taxes through Executive Orders under/during a state of emergency........

two-steps

Increase pay of those earning less $100k by 7.65%
just do the math gross pay x 0.0765= additional money take home pay.
(easier to just reduced to zero. you owe no FICA. MEDICARE taxes)

step 2 add any Federal taxes because he reduced them to $0

and here it is.... on 1-1-2021 he is going to forgive those Federal Taxes which he lowered to ZERO.


now tell me the answer to the above 2nd grade math......

take home pay will be Simple

gross pay less IN state & county tax.

of course this is back to August 1st

yea

 

[DoggyDaddy]

Pres. Trump is dealing with FICA & Federal Income Taxes through Executive Orders under/during a state of emergency........

two-steps

Increase pay of those earning less $100k by 7.65%
just do the math gross pay x 0.0765= additional money take home pay.

step 2 add any Federal taxes because he reduced them to $0

and here it is.... on 1-1-2021 he is going to forgive those Federal Taxes which he lowered to ZERO.


now tell me the answer to the above 2nd grade math......

take home pay will be Simple

gross pay less IN state & county tax

plus (gross pay x 0.0765)

of course this is back to August 1st

yea

The highlighted part seems to be the sticking point. I don't know that he has the authority to "forgive" them without Congress. I'm not counting on it. I'll be looking into changing my direct deposit distribution.

 

[openwell]

The highlighted part seems to be the sticking point. I don't know that he has the authority to "forgive" them without Congress. I'm not counting on it. I'll be looking into changing my direct deposit distribution.

ok
please read the tweets posted in reply #34 above....

not just the yellow highlighted info.....
the tweet

thanks

 

[DoggyDaddy]

ok
please read the tweets posted in reply #34 above....

not just the yellow highlighted info.....
the tweet

thanks

Understood... but I'm still gonna cover my ass. Call me skeptical of the government doing the right thing.