Taxes, Taxes, Taxes

by cjxpadmin | Sep 18, 2012 | Octobe r2012 Magazine, This Issue's FEATURE

by Melvin Collins, Jr

Have you ever received your paycheck at the end of a grueling work period and you take a peek at your earnings and you just want to ask, “Who is this guy FICA and why is he taking my money?”

We are going to take a look at a typical paycheck and go over each section to see where our money is going every payday. Many people have been receiving paychecks all of their adult life, but, you would be amazed at how many people don’t even pay attention to their pay stub. Sometimes, they don’t even keep their pay stub. Do you? Well, you should (for income tax purposes).

A paycheck consists of two parts: the paycheck part and the paycheck stub part. The paycheck part, of course, as you know, is what you take to the bank and deposit into your account to use for your daily living expenses. The paycheck stub part will include a breakdown of your earnings and deductions for a pay period to illustrate how your employer has arrived at your net pay. It will have a list of everything you earned and everything they are taking out of your paycheck. It will also contain your personal information such as: your name, your address, your Social Security Number, your sick leave, vacation time, and perhaps even your date of birth, as well as your gross pay, your net pay and your deductions.

Let’s take those one at a time, okay? Aside from the personal information, oh by the way, with a word about your personal information, make sure that it is CORRECT. That’s right, sometimes the Payroll Department may have misinformation on you, particularly and most important your Social Security Number. Also make sure they have your correct contact information — mailing address, telephone number, etc. Now, back to Gross Pay. Here we go…

Your Gross Pay — Your gross pay is the total amount of money that you earned during a certain pay period, be it weekly, hourly, monthly or semi-monthly.

Net Pay — Your net pay is the amount of money that is left after all your deductions have been taken out of your paycheck.

Deductions — The deductions contain a whole other slew of information. It is a breakdown of everything that you pay for out of your paycheck. This will include regular and required taxes, medical benefits or your portion of medical benefits, retirement funds, savings funds, charitable contributions, etc. Let’s take a closer look at the breakdown of these deductions.

>Federal Withholding Tax: This is the amount of money that is calculated by law as your share of taxes paid. This amount will depend on the information you submitted on your W-4 when you were hired such as marital status and number of dependents as well as any other instruction you have given with regard to additional withholding amounts PLUS the amount of money that you earned.

>State Withholding Tax: This tax is an amount that is calculated depending on, your what? yes, that’s right — your gross pay. This amount is deducted from your paycheck to assist in funding governmental agencies within the state. We, here in Texas, do not pay state taxes because Texas is a tax-free state along with Florida, Alaska, Nevada, Washington, South Dakota, Wyoming, Tennessee and New Hampshire. Beware of this state tax if you are an individual who lives in a tax state and work in a tax-free state because even though your employer does not deduct state taxes from your paycheck because you work in Texas, your tax home state is still going to be looking at you to pay your state taxes (if you live in any state other than the few mentioned above).

>FICA: Here is the guy you don’t know and you want to know why he is taking all your money. Well, we are getting ready to find out. FICA stands for Federal Insurance Contribution Act. This tax includes two separate taxes — Social Security and Medicare. These two items may be combined on your paycheck as one deduction; however, in most instances, it is itemized separately. Let’s look at them separately.

~Social Security: This is considered the nation’s retirement program. This tax is taken from your paycheck every pay period to assist in providing retirement income for the elderly and it pays disability benefits to those in need. These taxes are calculated at a percentage rate. In 2011, this percentage was lowered from 6.2 percent to 4.2 percent. The annual wage limit remains at $16,800 of your salary for the year. Once that amount is earned, the employer will stop the withholding tax and will resume it when the new year begins.

~Medicare: For Medicare, the withholding percentage deducted did not change. It remains at 1.45 percent. Medicare does not have an annual wage limit like Social Security. Therefore, the employer will withhold this percentage from all of your paychecks the entire year.

~Employer’s Share: If you think IRS is just taking your money out of your paycheck, don’t be fooled. Your employer is paying as well. Employers are required also to pay Social Security and Medicare on wages that they pay to you. Unlike the reduction in percentage that you enjoy, the employer’s share of this tax did not decrease. They are still required to pay 6.2 percent instead of the 4.2 that you pay. For the Medicare part, the employer pays the same percentage as you. So, the employer pays his portion of Social Security and Medicare taxes, plus he also pays your withholding, together, to the IRS. Of course, he takes it out of your paycheck but he does not keep it. He just funnels it through to the IRS.

~Considerations: This is something else that not a lot of people know about and it is called the IRS Section 125 Plan. This is for such things as a medical or dental plan that meets the IRS’ Section 125 criteria and this plan is not subject to Social Security and Medicare taxes. If you have such a plan, then, the employer will subtract the non-taxable benefit from your gross pay before he makes his taxing calculations. The amount after subtracting this benefit is called the employee’s taxable wages. Your employer will then figure your withholding, Social Security and Medicare from this new amount. This requires the employer to file a form with the Social Security Administration showing your taxable wages on your W-2 form for the year and he is required to provide a copy of that form for you to file with your tax return with the IRS.

>Retirement Plan: This is a plan that you set up with your employer if you want money deducted from your paycheck every pay period to help fund your future retirement benefits. This is an amount that is sometimes matched by the employer. This could be a 401K, a state or even a local retirement plan. Government employees belong to public pension plans funded by taxpayers. Private companies also provide pension plans, but their funds are based on investment planning (stocks and bonds). Due to the poor economy, many companies are opting out of pension plans. They are now directing employees into defined-contribution plans in which the worker, not the employer, bears the risk of poor investment performance.

>Medical and Dental Health Plans: This is a plan that you decide whether you want deductions taken out or not. However, the employer has to offer such plans for you to take advantage of this. Therefore, if they do offer one, you need to decide what type of plan you need and what is the best medical and dental coverage for you and your family. A carefully selected health and dental plan can potentially reduce medical costs over the long term and give you peace of mind. Now, keep in mind, that your employer may pay for your health and dental plans OR they may pay a portion of it OR they may pay nothing. In this last case, you would be totally responsible for the price of the package you choose.

>Year-to-Date: Lastly, on your deductions is the YTD wages. This is the total gross pay you have earned to date. Some employers will not only show your cumulative gross pay, but your cumulative net pay as well along with your taxes, your deductions, sick leave, vacation time, etc.

If you ever want to double check your paycheck amount, know that if you add up your net pay, your taxes and all your deductions, it should equal your gross pay for that pay period.

Now, if you don’t want to pay taxes at all, ever again, read the article on the next three pages. I wrote this a couple of years ago; tell me what you think with regard to this new concept. I am curious to see if people would really like to see something like this happen. I think it’s great. My family and friends like it, so, again, tell me what YOU think! I look forward to your comments.

Tax Structure

△

Taking Advantage of Seasonal Jobs

by cjxpadmin | Sep 18, 2012 | Octobe r2012 Magazine, This Issue's FEATURE

by Sheena Williams

Ahh holiday time! The sounds of tingling bells and children’s laughter! The presents, the calendar that says it’s August… What? August? I know what you’re thinking. The holidays are a long way off, but for retail and restaurants, the season is starting now! They are gearing up for the holiday season by hiring workers now. They are doing a push for staff so that when the masses come in to shop, they will not be short-handed. Who hates standing in lines for 8 hours to purchase two little items? Exactly, and employers hate when their customers have to do that as well. Even if the jobs are temporary, they have their own unique set of benefits that a more erudite worker can exploit!

Get Your Foot In The Door — So let’s say that you have been trying to work forever at this shoe company as a shoe designer. They just aren’t returning your calls or trying to hear about your designs because they are very busy. They are, however, hiring for shoe lace demonstrators or shoe sales associates. What do you do? You apply for those positions! Not only is this a chance to accidentally show off your skills to someone who knows a guy who knows a guy at the head office, you are also getting to see if you like how the company operates. How a company treats its lowliest workers is a pretty good indicator of how the company works as a whole. This gives you the inside scoop and a way to get your foot in the door.

Discounts And Sales — I don’t think I need to explain this one too much. Most retail companies offer major discounts for employees! Is that a leather wallet by some random design house you’ve had your eye on? Is that a dress you think your daughter would look darling in? Don’t have a lot of money for Christmas gifts this year? By applying and getting a job with a retail store, you are being given the chance to get things that would normally carry a ridiculous price tag at some very nice discounts! You are also the first person to know about any sales that are upcoming, and a quick FYI to your parents or significant other could net you that long-lusted for item at a great price! Is that thinking too much about self? Yes, it is!

Extra Cash — Even if you are working, sometimes, it never hurts to have a second viable income. You can stash away money in your savings account, go on that trip you’ve always wanted, help a family member with expenses or just build up a little nest egg for emergencies. Maybe you want to have a little extra to send to your child in college. Whatever the case, it never hurts to have a little extra cheer, no matter what the season. Take advantage of it!

Resume Builder — So, you need to learn a skill and you see a part-time job that will train you to do exactly that. Let’s say that you are a chef and there is a certain way a café makes their coffee, and you are dying to know how so that you can offer that service someday in your own 4-star restaurant. What do you do? That’s right, apply! It’s training that you are getting paid for and it looks amazing on your resume! See a nonprofit that needs a secretary? Sign up! You now have office experience to add to your list of experiences.

New Friends And Customer Service — Another reason for taking on seasonal jobs is that it gives some people something to do. Maybe you’re retired and you are just tired of being at the house all the time. A part-time or seasonal position may be just what you are looking for. It keeps you active and others are learning from your experience. You are also getting the chance to make new friends. The camaraderie built in the workplace stems from the same reason that sports teammates are so close and have such a strong bond. You are a group of people working for a common goal. You are greeting and meeting people, and even if you are not retired, it will give you a place to hang your hat until the next job, the one you truly want, comes along.

Make sure to check your local Workforce Center listings to keep up with who is hiring. Stop by a local mall and check out who is hiring. You never know what you’ll find or what opportunities are out there for you! △

So, You Didn’t Get The Job

by cjxpadmin | Sep 18, 2012 | Octobe r2012 Magazine, This Issue's FEATURE

by Sheena Williams

So you have waited and waited, and found that you were not selected for that position you felt you were so perfect for and really wanted. You spent time and stress on a job that didn’t come through, and now you’re wondering…….

Take a Deep Breath — First and foremost, relax. The worst is over. There were only two answers that you could have received and you received a “no.” It is NOT the end of the world. It just means that you have been given a new starting point to operate from, and it starts today! Take a long hot bath, veg in front of the TV and prepare for the next day’s job hunt. Relax….

Review Your Clothing and Resume — Relaxed? Okay, now it’s time to get down to business! There was a reason that you did not get the job. It could be that you’re over-qualified; it could be that they needed someone with more education, or it could just be that you were not the right match for the employer. They may have had a sister with a baby cousin named Tracey who really needed the job. Or, maybe someone was in line to get that job prior to your applying for it.

Regardless of the reason, you need to step back and take an objective look at your resume and yourself. Is your resume concise and to the point? Is your shirt ironed and tucked in? Are you wearing too much perfume or smoking too many cigarettes? Pay attention to the little details and make sure that they are taken care of before your next job interview. Read and re-read your resume. Look for improvement.

Take This Time To Practice — Now that your resume is ready and your clothes are pressed and you look perfect, stand in front of the mirror and practice interviewing. Don’t laugh, knowing how to answer many of the questions that will be thrown at you takes practice. By going over possible questions aloud to yourself, you are affirming that you are answering the question in the correct way. What is your biggest weakness? You work too hard, you’re a perfectionist, or you don’t stop working until the job is done! Whatever your weakness is, try to make it your strength.

Blessing In Disguise — You didn’t get that job, and of course you’re pretty bummed right now. But did you ever stop and think that your not getting that job just might be a hidden blessing? I know it doesn’t look that way now with the rent due and your family wanting to eat. But look at the hours that shift was offering. Would you have been there to hug your kids at night? Look at the people you’d be working with. Do they look happy? Sure, they are working, but when you are applying to certain companies, make sure that you check their turnaround. There may be a reason they are always hiring. Remember, things always happen for a reason!

Work On Your Skills — Take the time to work on you. Go take a free class at the Workforce Center, your local library, or any community organization. Read a book and learn a skill that you can carry over into your next job. There are literally thousands of nonprofit organizations and websites that offer free training in specific areas. With just a few classes online, you can have a skill that you can now put on your resume!

I know it doesn’t look like it now, but when you get your new job, you will look back on those other interviews and laugh. Just remember to relax, improve your resume and yourself by practicing, building up your skills, and counting your blessings! △

Company-Sponsored Events

by cjxpadmin | Sep 18, 2012 | Octobe r2012 Magazine, This Issue's FEATURE

by Sheena Williams

Oh look! You’ve been invited to the company’s holiday party! Wait! Maybe, it’s a job- related cook out. Wait, wait… is that conference? Whatever the occasion, maybe they all have one thing in common, and it’s that they are all work-related. Sometimes, or even often, depending upon your job, you will be called to hang out and smile with other co-workers. Most of these events are not mandatory and you probably won’t get paid for going, however, think twice before you scoff and blow the invitation off!

To Go Or Not To Go — So you’ve got your invite to a company-sponsored event. Before you say no, there are a few things that you should think about. Who is going to be there? Your boss? The same man who hired you, personally invited you and signs your paychecks? I’m not saying that you should go, but in the back of your mind, please remember that these events cost money and they are not cheap.  By not going, you may look as if you are not a team player and pretty ungrateful. This team building exercise that you say no to, might be remembered when you are asking for a promotion later. Is it discrimination to base a promotion on that fact? Yes. Is anyone going to know other than the person giving the promotion? Probably not. The guy/girl who got the promotion? They went to the company barbecue!

What To Wear — Unless stated, you should always go for a business casual look. T-shirts and jeans are fine for cookouts, but don’t wear the rattiest pair of jeans you can find. Though touted as a relaxing day, you are still being judged by your co-workers and your employer at these events. You always want to look nice without looking fussy. I would NOT suggest shorts, period! However, if it does call for shorts attire, please keep them at a respectable length. You want to look competent at all times and that includes events where maybe your boss’s boss may be in attendance.

What To Avoid — Alcohol!! I cannot stress that enough! It is a bad idea to drink large amounts of alcohol at any event. One or two glasses may be fine, however, cap it there. You are supposed to be relaxing, but you should never be so relaxed that you are saying things that should be kept private. Another thing to watch out for is being put in compromising positions. There are people in this world who would love to scream harassment and sue for every little thing. Yes you are off the clock, but company-sponsored events mean work-responsible. Watch yourself and watch your back.

Who You Communicate With — Everyone! No seriously, e v e r y o n e. Make new work friends; make connections; wave at your manager. Whoever is in attendance, smile and be friendly. Even if you see a co-worker who is not your favorite person. Waving from across the room is professional and polite. Saying hello to your boss is a must and a no brainer. Saying hello and introducing yourself to the guy next to him is also an awesome idea. Why? Because that person may be your boss’s boss! These kind of events are a personal PR dream! It allows you to see and be seen and it also gives you the Who’s Who of a company’s staff.

Try To Enjoy Yourself — Relax — Be yourself…unless “yourself” is rude, impersonal, and taciturn. Relax! You are there to have a good time and to learn. You are not going to meet people by keeping yourself in the corner cowering. Even if you are not outgoing, that is no excuse to hide yourself. If you can’t relax, then others around you can’t relax. You don’t want to make the event unenjoyable for everyone, right? Right! Just take a deep breath and jump in. The less you worry about social guffaws, the less of them you will make.

With these things in mind you should be able to meander anywhere! Remember, take a deep breath, relax and try to have fun. Don’t hide, be friendly and say hello to everyone. Don’t forget to shine your shoes, and smile! △