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Old 10-30-2022, 07:30 AM
  #3508  
symbian simian
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Originally Posted by Tpinks View Post
yes, after having looking through IRS pages and Regs, I believe the company is setting up pilots to get audited with this new program if they enroll. And the company has already flat out said they are not providing any support if that happens.

The previous commuting funds were indeed tax free though as it was through a tax free stipend. Now, W2’s are going to show wages earned and then a reduction which to me will immediately raise red flags with the IRS.

For me, this “raise” has resulted in a reduction of over $2500 in net income because of the tax brackets I have now been pushed into.
The previous commuting funds might have been provided tax free by the company, but that doesn't mean you weren't supposed to pay taxes on them. It has been explained several times that commuting from your domicile to your base is not a legal tax deductible/tax free expense, regardless of what the company did/said. I think they realized that and thus decided to roll it into taxable wages. This will raise 0 flags with the IRS.
It is possible your net income could be lower, but only because you were not declaring all your income correctly.
It is impossible that "getting pushed into higher brackets" will reduce your net income as long as the bracket you are getting into is less than 100% (spoiler: the rate is lower than 40%)

I think this is your calculation, if not apologies, but quoting is not working correctly:
$2000/70=$28.57 previous non-taxed income

$211-$174=$37 increase overall

37-28.57=8.43 actual increase

8.43*70= $590 monthly increase in
net pay.

this was hardly a raise. That 590 pushed me into new brackets so I’m netting less than pre raise.


The $590 increase is gross pay, not net. And only those $590 will be taxed at the higher rate, not all of your pay. If you managed to get that taxed at 37%, your net pay will still be $4400 per year higher.

It is staggering how many people misunderstand tax brackets.
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