Taxes
 

Anyone actually have any definitive info as to what the actual tax rate will be on this incentive money. I’ve heard as low 22% and as high as 45 depending on who you talk to and what day

Plus the checks are coming on the 20th of April correct? $$$ No matter what the percent, when you do your 2018 taxes you'll get an overage paid as a refund in 2019.

It’s 22% according to my accountant.

Plus social security and state tax. I imagine it will be a total of 35 to 40% or so when the check clears.

That’s correct. By the time you get the loot, state and Uncle Sam taking a huge bite out of it.

Your actual tax rate will depend on your total taxable income when you file your taxes for 2018 in 2019.

What the company withholds depends on how they are going to treat the compensation payment.

It’s covered in supplemental wages section of IRS Pub 15
https://www.irs.gov/pub/irs-pdf/p15.pdf

They can either withhold the flat 22% or lump it with your normal wages and calculate the withholding as if they paid you with your normal paycheck which depends on what your filing status is and the number of personal allowances you claimed on your w-4.

In addition to the federal income tax withholding Spirit still has to withhold 6.2% for Social security for the first $128400 you make (after you make $128400 spirit stops withholding social security) and 1.45% for Medicare (no limit). After you make more than $200,000 you are subject to an additional Medicare tax of 0.9%.

Whether the flat 22% is enough withholding, if your tax rate for 2018 is less than 22% then you’ll probably get some of the FITW refunded. If your tax rate is higher than 22% you probably won’t.

That’s what I was looking for... thank you

22% fed
6.2% social security
2% union

Yep the union gets their grubby 2%

if Spirit doesn’t use the flat 22% and instead decides to Calculate it with your April 15 or April 30 check, I.e. method b, then it will be withheld at a much higher rate.

For example as a 5 year captain, base pay is 36 x 202.
So gross base pay is $7272. If they add the compensation payment to the April 15 or April 30 check amounts, then the withholding is for a single guy $6278.84 plus 37% of the wages above $20988. Or for a married guy $6724.11 plus 37% of the wages above $25481.

So 37%+6.2%+1.45%= close to 45%. So that’s where your 45% comes from.

I think Spirit will probably calculate it both ways flat 22% and method b and withhold whatever is higher, and I’m also going to wager they are going to use April 30 figures as everyone gets just 36hours on their April 30 check. April 15 everyone makes something totally different From everyone else.

Do you read your email? It’s coming April 20th as a separate check at the federal taxes will be 22%

Yes ALPA gets 1.95% but they did negotiate it for you and without them you’d have gotten nothing. A little perspective on the “grubby”

It will be withheld at 22%, I'm still not sure what it will be taxed at come April 2019. I have friends at SWA who owned a decent amount after getting withheld at the lower rate for their signing bonus. Wish a CPA could clarify.

This is what I thought was gonna be the case...22% gets withheld plus a nice surprise come tax time next year

Married taxpayers filling jointly for 2018 between 165k-315k pay 24%. Effective tax rate will be lower than that, so 22% should be fairly accurate for most married captains. Unless off course your combined incomes are a lot higher than 315k.

Think how much ALPA could have made if they took 1.95% of FULL RETRO!

We actually saved a ton of money here. Silver linings people... :mad:

Full retro on United plus 1. Good thing they didn’t ask for that, their 1.95% would have been huge.

But 1.95% is the industry-standard cut.

Got the bonus today.

Breakdown
22% FITW
1.95% union dues
1.45% Medicare
6.2% Social Security

You should be left with 68.4% of your bonus remaining assuming you didn't contribute up to 61% of it to your 401k

NJ took $7,000. FU NEW JERSEY

Pfffff, not if you live in NJ 60%

GD! NY took 4200$ from me. However your check is prob bigger than mine.

What’s state income tax?

It’s something that 8 or 9 states doesn’t have to deal with. :(

#drunk
.......

But you have good schools :)

Fixed It For Ya

Cory Booker for President

And tolls......

Hey everyone F9 pilot here, congrats on the retro checks! Sucks to hear about the state taxes and all. Anyway, w/o going into specific numbers how did the union decide how who got what amount? Capts and FO's each got a certain percentage, was it based on longevity, based on W2's from the past year, etc.

Thanks. I was just wondering for if and when we ever get a new contract and our retro.

6.87%


..............

Magic 8 ball.

Also, "ratification bonus" includes money for difference between DOS and new rigs that take effect after PBS boning.

They counted from amendable to DOS how many months you were an FO and/or CA then took those months and took the new rate and subtracted the old rate for each month. Add all the months together and divide by the total amounts of all pilots and that is your percentage of the 75M.

Ok great, thank you that seems fair enough.

Uhh.... It's not a retro check. It's about 1/5 of what retro should have been.

It means we lost the game.

If you get the same thing we get, you too will have lost.

Yes I understand. I was just curious how it was all distributed. I'm sure it will be similar here once ALPA, the pilots and the company can agree on an amount.

Thanks for the info.

It’s doesnt have to be.

Fine. A straight answer. 95% was deposited, in a standalone check, on the 20th. The other 5% will be paid next month.

More like six months

They taking ALPA dues out of that one too?

Why is this even a question?
Of course ALPA dues will be taken out. I’m sure you know that though, and that you’re just expressing a little frustration. I get that much, but come on.

You could always tell ALPA to keep the bonus and you go in and try negotiate your own that you won’t pay dues on.