Originally Posted by
symbian simian
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.
yes it was supposed to say gross.
We had the commuting stipend last year, everything was paid for by the company and receipts had to be turned in. Our W2’s did not include any type of mention of a stipend or anything to show non taxed income. So now that this is transferred into rates, it changes taxes in a major way.
Yes I’m getting 590 gross more per month but my taxable gross income has risen 2590 more per month. That is where the loss occurs.
At the end of the day, people can argue what is and isn’t taxable forever. However, the way company did it last year, there was zero accounting on the pilots side on their W2’s showing any kind of stipend. However, that will change with this new program as they have to somehow show the withholding as a reduction from someone’s normal hours worked and for that reason most people I have talked to has withdrawn from the Divy program.
as for being comparable to other’s rates… we are only just now comparable to everyone’s 2019/2020 rates. Everyone is in negotiations. Even Avelo is paying slightly more AND still giving a $1800 month commuting stipend on top of those rates.