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Thread: Job - a few ?'s

  1. #1
    AudreyLeigh
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    Default Job - a few ?'s

    OK, so, when I get my job...

    Im only working somewhere with benefits... so, I will have options

    Where do I want to put my money? 401K, IRA, Roth IRA. What are they? When do I put my money there and how much? How does it work?

    I have a daughter - do I put 2 on the paperwork? Should I put 0 so they take more and I have a cushion when tax season comes around because I will be making tips and have to claim a portion of them...

    I dont understand any of this stuff.

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    Banned Melonie's Avatar
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    Default Re: Job - a few ?'s

    ^^^ insufficient data re the 'straight' job. By the letter of the law, employee tip income now has to be reported through the employer's payroll system, an the employer must withhold taxes from the declared tip income on the employee's behalf. Some employers in this situation force all tipped employees to 'share' tip income equally via turning in every dollar earned in tips on a daily basis and then being paid out an 'average' in the weekly paycheck. In both cases it will not be necessary to play games with W4 deductions.

    There is a potentially major problem if you will be working at a 'straight' job and still earning money from featuring / dancing. This problem stems from the fact that the employer's accountant will calculate withholding based solely on your 'employee' income, whereas adding business income will kick the 'employee' income into a higher tax bracket leaving you underwithheld.

    As to 401k's these are employer sponsored retirement plans which allow employees to contribute money out of their paychecks to the plan without having to pay income taxes on the contributed money. The tradeoff of course is that withdrawing this money at retirement age will cause income taxes to come due on the money being spent out of the retirement plan. Some 401k plans also include an employer matching contribution i.e. for every dollar the employee contributes the employer also contributes a dollar. If you have a matching 401k plan, this amounts to 'free money' thus it's a no brainer to make the maximum employee contribution that the employer will match.

    IRA's are a private version of the 401k. Same situation re contributed money being tax deferred until you withdraw and spend it. Also, I didn't mention earlier that withdrawing money from an IRA or 401k BEFORE reaching retirement age not only causes income taxes to be due and payable immediately, but also triggers penalty charges (which I think run 10% of the balance).

    Roth IRA's are a special variant of a regular IRA. The contributed money to a Roth IRA is after tax, meaning that you don't save any money off your yearly income tax bill by contributing. However, since this money has already been taxed, there are no additional income taxes due when you retire and start withdrawing and spending Roth IRA money. Interest earnings however are allowed to compound tax free over the years.

    All of these gov't sanctioned retirement plans involve an element of 'risk'. The risk is that the gov't still has their 'hooks' attached to the money in these retirement funds, and can change the retirement fund rules or tax rules applying to retirement fund money at any time. It basically boils down to making a 30 year 'bet' that the tax savings available from contributing to these retirement funds now will be greater than the tax bill (or other retirement benefit losses) that will come into play 30 years from now when you retire.

    Lots of people won't agree, but the only type of gov't sanctioned retirement fund that I can readily recommend is a 401k that has matching employer contributions. IMHO any other gov't sanctioned retirement fund is too vulnerable to future rule changes and tax changes to be worth making a 30 year one way bet on. Some of the proposed changes could have MAJOR future ramifications ...

    - Social Security Means Test ... if you have saved your own money for retirement via a gov't sanctioned retirement plan, you won't need or get a Social Security
    check.

    - Flat Tax / Fair Tax ... if the current income tax is replaced with a de-facto national sales tax, money withdrawn from gov't sanctioned retirement accounts and spent in the future will be subject to a 21% federal sales tax. If that happens to be Roth IRA money, which was already taxed at whatever percentage the current income tax proposes in the year that it was contributed, a double taxation will result i.e. a 40-50% total tax rate. If it is 401k or IRA money, then the 21% flat tax 30 years from now must be measured against whatever percentage the current income tax would have collected now if the money wasn't contributed and subtracted as an adjustment to gross income (which could be anywhere between 15% and 31%)

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    Default Re: Job - a few ?'s

    Quote Originally Posted by Melonie View Post
    ^^^ insufficient data re the 'straight' job. By the letter of the law, employee tip income now has to be reported through the employer's payroll system, an the employer must withhold taxes from the declared tip income on the employee's behalf. Some employers in this situation force all tipped employees to 'share' tip income equally via turning in every dollar earned in tips on a daily basis and then being paid out an 'average' in the weekly paycheck. In both cases it will not be necessary to play games with W4 deductions.

    There is a potentially major problem if you will be working at a 'straight' job and still earning money from featuring / dancing. This problem stems from the fact that the employer's accountant will calculate withholding based solely on your 'employee' income, whereas adding business income will kick the 'employee' income into a higher tax bracket leaving you underwithheld.

    As to 401k's these are employer sponsored retirement plans which allow employees to contribute money out of their paychecks to the plan without having to pay income taxes on the contributed money. The tradeoff of course is that withdrawing this money at retirement age will cause income taxes to come due on the money being spent out of the retirement plan. Some 401k plans also include an employer matching contribution i.e. for every dollar the employee contributes the employer also contributes a dollar. If you have a matching 401k plan, this amounts to 'free money' thus it's a no brainer to make the maximum employee contribution that the employer will match.

    IRA's are a private version of the 401k. Same situation re contributed money being tax deferred until you withdraw and spend it. Also, I didn't mention earlier that withdrawing money from an IRA or 401k BEFORE reaching retirement age not only causes income taxes to be due and payable immediately, but also triggers penalty charges (which I think run 10% of the balance).

    Roth IRA's are a special variant of a regular IRA. The contributed money to a Roth IRA is after tax, meaning that you don't save any money off your yearly income tax bill by contributing. However, since this money has already been taxed, there are no additional income taxes due when you retire and start withdrawing and spending Roth IRA money. Interest earnings however are allowed to compound tax free over the years.

    All of these gov't sanctioned retirement plans involve an element of 'risk'. The risk is that the gov't still has their 'hooks' attached to the money in these retirement funds, and can change the retirement fund rules or tax rules applying to retirement fund money at any time. It basically boils down to making a 30 year 'bet' that the tax savings available from contributing to these retirement funds now will be greater than the tax bill (or other retirement benefit losses) that will come into play 30 years from now when you retire.

    Lots of people won't agree, but the only type of gov't sanctioned retirement fund that I can readily recommend is a 401k that has matching employer contributions. IMHO any other gov't sanctioned retirement fund is too vulnerable to future rule changes and tax changes to be worth making a 30 year one way bet on. Some of the proposed changes could have MAJOR future ramifications ...

    - Social Security Means Test ... if you have saved your own money for retirement via a gov't sanctioned retirement plan, you won't need or get a Social Security
    check.

    - Flat Tax / Fair Tax ... if the current income tax is replaced with a de-facto national sales tax, money withdrawn from gov't sanctioned retirement accounts and spent in the future will be subject to a 21% federal sales tax. If that happens to be Roth IRA money, which was already taxed at whatever percentage the current income tax proposes in the year that it was contributed, a double taxation will result i.e. a 40-50% total tax rate. If it is 401k or IRA money, then the 21% flat tax 30 years from now must be measured against whatever percentage the current income tax would have collected now if the money wasn't contributed and subtracted as an adjustment to gross income (which could be anywhere between 15% and 31%)
    Good article, but really doesn't help the original poster. What you wrote should be saved for an advanced investor

    Remember the greatest risk of investing

    * Not investing

    You can talk all about all the risks about the future, but the single biggest risk anyone takes is the above risk. If you throw in a long winded answer like that, they are still confused and will not invest.

    Here's my answer to the original poster.

    * If you are eligible for a 401(k) Plan, Just invest the maximum possible in an S&P 500 Index.

    DO NOT think, read or seek advice about investing till you complete this step.

  4. #4
    AudreyLeigh
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    Default Re: Job - a few ?'s

    The tips here are given straight to the hairdresser or if paid by CC the charge goes thru the computer and the cash is given to stylist at end of the day. I think they keep track of the tips paid by CC but not cash (theres really no proof we got a tip and i dont really care about being 100% honest anyway) Im mean seriously - I dont... it may be bad but well... its the truth.

    Anywho - I wont be dancing once I get the job. Im actually 99% fed up with dancing in the whole and have no desire to work presently or in the future... so self employed taxes wont matter.

    Think Im just going to max the 401K and worry about tax repercussions later. When tax season rolls around then maybe go with the Roth IRA?!

  5. #5
    Banned Katrine's Avatar
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    Default Re: Job - a few ?'s

    Oh my god. Audrey, please, keep your mind open and read as much as possible on the matter. Dare I even say, speak to a professional, whether you hire them or not.

    Mel and Xan are at two opposite ends of the spectrum, and there is a lot of information in-between.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Job - a few ?'s

    look at what bracket you fall into taxes wise then decide whether to do roth or the regular 401(k).

    Getting a straight job has muchhhh better benefits then stripping in my opion b/c of paid vacation, medical benefits, and a resume builder. A lot of strippers that go back into the business world when they are older are behind career wise.

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    Default Re: Job - a few ?'s

    sorry I just re-read your original question. Usually you designate a percentage of your paycheck each pay period to be in your 401(k). I currently do both the roth and the regular 401(k) at my job. We have a website where you can watch your investments grow, too.

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    Banned Katrine's Avatar
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    Default Re: Job - a few ?'s

    Audrey, maxing out your 401K can be up to $15,500 a year. Are you going to make that much to save it?

    Also, if you plan to work as a hairdresser, very few employers even offer such benefits in your business. I imagine the large department stores might. However, you may not even be eligible for it for 1-3 years.

    Empower yourself not to rely on your employer for retirement help. Cheap health insurance is pretty rad though. Again, I work with many hair salons in town, and very few even offer health benefits.

    I also need more information...

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Job - a few ?'s

    I would advise against claiming '0' on your taxes. Go talk to a professional and claim exactly (or close to) what you need to. Unless you don't need that money now and don't mind giving the government an interest-free loan...I would advise to not claim '0'.

    Do your research.

  10. #10
    AudreyLeigh
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    Default Re: Job - a few ?'s

    Quote Originally Posted by Katrine View Post
    Audrey, maxing out your 401K can be up to $15,500 a year. Are you going to make that much to save it?

    Also, if you plan to work as a hairdresser, very few employers even offer such benefits in your business. I imagine the large department stores might. However, you may not even be eligible for it for 1-3 years.

    Empower yourself not to rely on your employer for retirement help. Cheap health insurance is pretty rad though. Again, I work with many hair salons in town, and very few even offer health benefits.

    I also need more information...
    This is why I want to work at JCPennys - they cover everything medical/dental/vision/chiropractic/401k/etc etc etc.... everything their other employees get the salon gets too. Thats one of the main reasons I want to work there. Now that Im pregnant I dont know what to do tho!!! I still want a job but I cant tell them Im pregnant - they most likely wont hire me.... Im going in on Wednesday. Well just see what happens.

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    Default Re: Job - a few ?'s

    Quote Originally Posted by AudreyLeigh View Post
    This is why I want to work at JCPennys - they cover everything medical/dental/vision/chiropractic/401k/etc etc etc.... everything their other employees get the salon gets too. Thats one of the main reasons I want to work there. Now that Im pregnant I dont know what to do tho!!! I still want a job but I cant tell them Im pregnant - they most likely wont hire me.... Im going in on Wednesday. Well just see what happens.
    It's illegal not to hire somone b/c you are pregannt, though, I'm sure it happens plenty. Why not just not tell them?

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    Default Re: Job - a few ?'s

    My company matches my first 6% dollar-for-dollar on my 401k. So I currently just invest 6% of my salary, just to get their 6% as well. However, (this is is the case with most companies), if I should quit and rollover my account, I do not have access to their 6% until I have been there for 5 years. In my experiences, most companies with matching retirement benefits have a 5-6 year vesting period. So that IF they match your investment at all, and IF you plan on being there for whatever vesting period, definitely go with their 401k. They'll give you an 800 # of some sort or connect you directly with a financial planner who can guide you into the right investments, depending on the risk level you'd be interested in.






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    Banned Katrine's Avatar
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    Default Re: Job - a few ?'s

    Quote Originally Posted by Hello_Kitty27 View Post
    In my experiences, most companies with matching retirement benefits have a 5-6 year vesting period.
    Not really. It varies, but most companies don't make you wait that long. I look at company benefits every day, and am constantly getting an influx of new company benefits to review for my clients. The most common waiting time is 1 year.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  14. #14
    AudreyLeigh
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    Default Re: Job - a few ?'s

    Quote Originally Posted by cupcake9876 View Post
    It's illegal not to hire somone b/c you are pregannt, though, I'm sure it happens plenty. Why not just not tell them?
    I wouldnt tell them because of that - they can use another excuse to not hire me even if the real reason is the pregnancy. Im just going to get the job and tell them around 4 months. That way ill have been there a couple months. My guy says he had a girl that worked for him that was so obviously pregnant but its illegal for him to ask her. She waited until she was a month away from popping before telling him... of course he already expected the leave, etc... i just thought it was funny.

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    Default Re: Job - a few ?'s

    ^^^ just be aware that most job applications have a blank for the applicant to fill in regarding 'pre-existing medical conditions'. If you are one month pregnant and don't fill this in, surprise surprise. But if you are three months pregnant and don't fill this in, it could be construed as lying on your job application which is technical grounds for firing you.

    If you were to be hired and fired, this could count as a far worse development when seeking future straight jobs than if you told him and were not hired in the first place. If you were hired and fired, future straight employers will undoubtedly contact the employer that fired you to ask why ... and will be told that you lied on your job application.

    as to the mui pregnant girl working with your guy, it makes a world of difference whether or not she was hired 3 months ago versus hired 3 years ago !

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    Default Re: Job - a few ?'s

    ^Most good companies have group health insurance plans that do not have pre-existing conditions. It's the shadier companies that have that or make you wait 3 months before you can go onto their health insurance. It is just a way for them to cut costs since health insurance is so expensive.

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    Default Re: Job - a few ?'s

    Quote Originally Posted by Melonie View Post
    ^^^ just be aware that most job applications have a blank for the applicant to fill in regarding 'pre-existing medical conditions'. If you are one month pregnant and don't fill this in, surprise surprise. But if you are three months pregnant and don't fill this in, it could be construed as lying on your job application which is technical grounds for firing you.

    If you were to be hired and fired, this could count as a far worse development when seeking future straight jobs than if you told him and were not hired in the first place. If you were hired and fired, future straight employers will undoubtedly contact the employer that fired you to ask why ... and will be told that you lied on your job application.

    as to the mui pregnant girl working with your guy, it makes a world of difference whether or not she was hired 3 months ago versus hired 3 years ago !
    If she has not gone to a doctor for pregnancy confirmation, then they cannot PROVE that she knew she was preggers BEFORE she got hired. Some people do not know they are preggers until they start showing (4-5 months). It is also illegal in many states to deny maternity care to a new employee as an "existing condition". At least, in IL, insurance companies cannot deny a pregnant woman insurance (no matter how pregnant she is) because she was pregnant before her policy started.

    I still wouldn't tell them or disclose it. You simply have a very irregular period and didn't think anything of it when it didn't come those months.

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    Default Re: Job - a few ?'s

    Quote Originally Posted by cupcake9876 View Post
    It's the shadier companies that have that or make you wait 3 months before you can go onto their health insurance. It is just a way for them to cut costs since health insurance is so expensive.
    Actually, it's a way to cut costs because when they cut costs, they make more money.

    They don't give a shit how expensive insurance is. They just care about how much they are making...whether or not you are denied coverage for a life-threatening tumor, cancer, or a simple stitch job...if they can get you to pay your premiums faithfully and deny you care...they'll do it. With a pregnant woman, they cannot deny any care. And they know it.

  19. #19
    AudreyLeigh
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    Default Re: Job - a few ?'s

    Well, my guy and I are getting hitched next weekend and he and family get free Kaiser thru his company.... so I wont be needing medical after all... now all Ill be interested in is the retirement stuff.... which Im not even sure ill be able to put money away since in the beginning well need all the money we can get to cover baby expenses.

    So - since Ill have medical would it be beneficial to mention im preggo and that i have insurance or just keep my mouth shut?!

    Thanks for the info ladies!

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    Default Re: Job - a few ?'s

    ^^^ well, announcing your pregnancy eliminates the possibility of any future backlash re 'lying' on your job application. On the other hand, it also sends a clear message to your prospective employer that you are guaranteed to require a multi-week leave of absence in the near future ... and a small degree of probability that you will either choose not to return to your job or be prevented from returning to your job for health reasons. Depending on the degree of training involved in your job, and depending on the difficulty that prospective employers are facing in identifying / interviewing qualified candidates in general, telling a prospective employer that you are pregnant may significantly reduce your chances of being hired.

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    Default Re: Job - a few ?'s

    You are not required to disclose to an employer that you are pregnant. Especially if you are less than 12 weeks pregnant. You are still in the "red zone" and most people I know, don't say anything about being preggers until around 20 weeks.

    I wouldn't say a word. Just go in, work, and then a few weeks after..."OMG! I just found out I'm pregnant! I went to the doctor because I wasn't feeling all that great and they did a blood test and said that I have HcG in my system...blah, blah, blah."

    If you took 10% of your check and put it into retirement...I bet you wouldn't even miss it. Keep track of the "junk" spending you do every week and see how much that adds up to. It probably adds up to more than 10% per week.

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    Default Re: Job - a few ?'s

    Quote Originally Posted by VenusGoddess View Post
    You are not required to disclose to an employer that you are pregnant. Especially if you are less than 12 weeks pregnant. You are still in the "red zone" and most people I know, don't say anything about being preggers until around 20 weeks.


    If you took 10% of your check and put it into retirement...I bet you wouldn't even miss it. Keep track of the "junk" spending you do every week and see how much that adds up to. It probably adds up to more than 10% per week.
    They won't fire you if you tell them you are pregnant. They can't by law. This "pre-existing condition" law is bullshit. Pregnancy is not a pre-existing condition, by insurance-land terminology.

    If you put 10% away, don't put it all in your 401K. Make sure you and your family have a solid savings bucket first. Try to calculate at least 3-4 months of EXPENSES, not income. Before you invest yourself into an illiquid 401K with tax penalties for early withdrawal, have that base savings!!

    3 months expenses minimum. May I suggest 6 to be safe?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Job - a few ?'s

    Quote Originally Posted by AudreyLeigh View Post
    This is why I want to work at JCPennys - they cover everything medical/dental/vision/chiropractic/401k/etc etc etc.... everything their other employees get the salon gets too. Thats one of the main reasons I want to work there. Now that Im pregnant I dont know what to do tho!!! I still want a job but I cant tell them Im pregnant - they most likely wont hire me.... Im going in on Wednesday. Well just see what happens.
    Whole Foods pays for your medical/dental if you are a full-time employee. Plus you get a discount on food. I have been trying to work with them, but they are not hiring near me.

  24. #24
    242_fair
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    Default Re: Job - a few ?'s

    Really I don't think you should tell them your preggers. You were right in the earlier post, they will just pick a different reason and say THATS why you don't get the job. And CONGRATS on the wedding! That is really great news, I hope it shuts up your mother. (was that rude?)

  25. #25
    AudreyLeigh
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    Default Re: Job - a few ?'s

    ^^ hahaha... sure did. think im gonna keep my mouth shut. i have an interview with Regis tomorrow - salon doesnt open until Jan. Wish me luck!

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