BBB - taxes on overtime

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zubs

zubs

Well-known member
I was thinking about the bill that just got signed into law on JULY 4.
There is now "no tax" on overtime. It has a cap as follows:
Single $12,500
Married $25,000
Also one can not make over $300,000 as a couple filing.

Since I own my own company, and pay myself, can I call $25,000 of my pay overtime?

So I would be saving as follows:
$25,000 * 24% = $6,000 from the US Treasury.

I can also do this for my employees so they can save on taxes.
 
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Say I pay myself $200,000/year.
I would change my pay to $175,000/year and add $25,000 overtime.

The owner of a company is always working. Whether he's posting on TI or laying out on the beach. He's always thinking about his company...so that's work right? LOL. It's like elon posting on twitter all day long...it's work man.
 
I wish one of the CPAs here would chime in on this.
Qwerty or Martin....what do you think?

Loop hole and totally legal? or dont' do it...you will get audited by IRS........LOL
 
zubs said:
I wish one of the CPAs here would chime in on this.
Qwerty or Martin....what do you think?

Loop hole and totally legal? or dont' do it...you will get audited by IRS........LOL
Click to expand...

CA has rules about what job function/responsibilities qualify for an hour job and which are required to be salaried. Start there first.
 
Forgot to respond to this previously. An owner of a company will in all likelihood be considered an exempt employee. Not sure what your company is structured as (s corp, c corp, llc, etc) but if you own 20% or more of the business and you work in the business you will generally be an exempt employee.
 
When a new law comes to pass, we must explore all possiblities to save money through loop holes.
As the boss/owner of the company I feel I can designate myself any working manner I wish.

Although to save $6,000 in US treasury payments is probably not worth it.
But I predict we will see a spike in overtime in 2025 tax returns.
 
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zubs said:
When a new law comes to pass, we must explore all possiblities to save money through loop holes.
As the boss/owner of the company I feel I can designate myself any working manner I wish.

Although to save $6,000 in US treasury payments is probably not worth it.
But I predict we will see a spike in overtime in 2025 tax returns.
Click to expand...
You can designate yourself however you want but the risk comes if you get audited by the CA FTB or IRS. Then you better hope you can claim ignorance vs tax evasion

You can get ahead of it by making a donation to Trump to have your pardon ready :-)
 
What about helping my employees?
Say $100,000 is their salary, and I chop it to $75,000 + $25,000 overtime.
They get to save on the IRS bills.

I am a benevolent ruler.
 
zubs said:
What about helping my employees?
Say $100,000 is their salary, and I chop it to $75,000 + $25,000 overtime.
They get to save on the IRS bills.

I am a benevolent ruler.
Click to expand...
You are begging for an audit with that. Better safe than sorry. If a bunch of people suddenly have a large amount of overtime but never did before, seems like a red flag.
 
zubs said:
What about helping my employees?
Say $100,000 is their salary, and I chop it to $75,000 + $25,000 overtime.
They get to save on the IRS bills.

I am a benevolent ruler.
Click to expand...
If you were to get audited and they asked you what the business reason was for the change you better have a good answer or they can go after you for aiding in tax evasion.

Companies can generally come up with a decent enough explanation where if they disagree they just ask for the taxes that would’ve been owed plus penalties and interest. Few get prosecuted for actual tax evasion.
 
I would tell the IRS...due to the BBB's no tax on overtime, I have changed my employees base pay to $75,000 + $25,000 as overtime so that they can pay less taxes to you. Where before the BBB it would not have mattered....it matters now.

Would that work?
 
I'm like trump...looking for loopholes in our system.

So my $100,000 salary employee worked 40-60 hrs a week. I can also say they worked 100 hrs/week...
I can classify thinking about work as work.

After the BBB, shouldn't I change the salary to $75,000 + $25,000 overtime?
Because before BBB overtime salary did not matter.

If this loophole exists and we can confirm it with the IRS, then it should be taken.
 
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zubs said:
I'm like trump...looking for loopholes in our system.

So my $100,000 salary employee worked 40-60 hrs a week. I can also say they worked 100 hrs/week...
I can classify thinking about work as work.

After the BBB, shouldn't I change the salary to $75,000 + $25,000 overtime?
Because before BBB overtime salary did not matter.

If this loophole exists and we can confirm it with the IRS, then it should be taken.
Click to expand...
Do salary employees get overtime? I don’t remember it working that way.
 
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