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Sat Aug 8, 2020, 04:53 PM

How do you defer payroll tax?

Does that mean I don't have taxes deducted each pay period but I will still owe those taxes?

If that's the case, how do I opt out?

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 04:59 PM

1. We'll have to pay it back.




This "payroll tax holiday" is not a tax cut. At the end of it, all deferred taxes will need to be paid, which means workers will get months worth of payroll taxes taken out of their checks at once like an subprime mortgage "balloon payments."

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Response to octoberlib (Reply #1)

Sat Aug 8, 2020, 05:01 PM

3. That's no favor...

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Response to Buckeyeblue (Reply #3)

Sat Aug 8, 2020, 05:02 PM

4. No, it's not. I'd like to opt out , too.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:01 PM

2. Unless he wins the Presidency. He said he wants to permanently get rid of payroll taxes,

thereby totally defunding SS and Medicare. Biden needs to have ads out on this everywhere.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:06 PM

5. Don't pay anything now, Trump will send you your tax bill just before Christmas.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:10 PM

6. $400.00 unemployement per week . ..

BUT 25% have to be paid by the states who are struggling. No win to the American people.

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Response to Iliyah (Reply #6)

Sat Aug 8, 2020, 05:23 PM

11. Not to mention the other 75% that can't be covered by repurposing money

It's a promise of $400 a week that he simply can't fulfill.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:10 PM

7. Even if it were legal for him to "do" this...

won't every business or institution deducting payroll taxes have to change their accounting system to make it happen or would it be a simple matter of flicking a virtual switch...(not an accountant)...?

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Response to wcmagumba (Reply #7)

Sat Aug 8, 2020, 06:20 PM

14. I'm a payroll admin

This is giving me nightmares already.

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Response to Freddie (Reply #14)

Sat Aug 8, 2020, 06:29 PM

15. That is what I was thinking...another administrative nightmare for businesses...

in a pandemic...just nuts...

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:16 PM

8. And you know if Biden wins

"OH NOES TAX INCREASE BIDEN! TAKING YOUR HARD EARNED MONEY AGAIN!"

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:20 PM

9. He can defer, but he can't eliminate or forgive payroll taxes.

Employers will still most likely deduct the taxes so they're not on the hook for them later. Only Congress can change the law that changes the tax (es).


?s=20

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:23 PM

10. classic move for a conman always a step ahead of the law

 

will do and try anything no matter the long term cost if it saves his own ass.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:32 PM

12. You may have to opt in

Supposedly it is for HOUSEHOLDS with less than $100K incomes. How does an employer know your household income? One may have to apply for this.

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Response to Buckeyeblue (Original post)

Sat Aug 8, 2020, 05:38 PM

13. This Is A Tax Cut For Employers

It doesn't cover one person at >80% of the cap, and doesn't apply to about 35% of the population with THI of >$100k.
But, every employer is going to stop deducting their half.
They take that money and use as daily cash flow.
That eliminates part of their line of short term credit. They save the 1/8th percent fee paid monthly.
So, they make 1.5% extra money (reduced interest expense) for doing nothing, and the "beneficiaries" eventually have to pay the tax.
They get nothing, big companies get free money equal to 1.5% of the vast bulk of their payroll.
Another sucker play.

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Response to ProfessorGAC (Reply #13)

Sat Aug 8, 2020, 06:33 PM

16. But then they have to pay it back?

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Response to Buckeyeblue (Reply #16)

Sat Aug 8, 2020, 06:57 PM

17. Yes, I Explained That

Big companies manage cash with insurance company lines of credit.

Let's do an example:
Your company has 1,000 people. You do $1billion in sales, and all your expenses are $840 million.
That means $70 million goes out each month.

Your accounts receivables don't line up with the fact that 30% of total expenses hit on the 15th & last of every month. (Payroll). Neither do your accounts payable.

So, to maintain your cash & external investment position that analysts like, you come to my giant insurance company.
You borrow $10 million for 6 days, each month.
Once all your receivables hit, you give me the money back. No interest, but a 1/8th percent fee.
It's a good deal for me, because the risk is near zero, and I can lend out the same $10 million 5 times each month.

Now, instead of you sending that 9.5-10% to the government, you use it as cash flow. You don't come to me for those months. After a month you've got enough to just bank the excess.

At the end of the year, you send the excess in the bank to SocSec & HHS. Over that time, you didn't pay me that 1/8th percent 12 times. You make a free 1.5% of $10 million, or $150,000 for essentially doing nothing. You get to keep the fees you were paying me, without tampering with your overall cash position.

So, yes they send the money back. But, they make a profit on it. My scenario is effectively a $105,000 tax cut.

In many cases, the numbers are larger.

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