No Tax on Overtime

Hypnotized

Would be simpler than the current system

Which is exactly why they’ll never let it happen.

No loopholes for special interests. And everyone paying a fair share would also be bad news for those who don't currently pay any taxes.

Trouble is half the country is being told that wealthy people are evil and that taxing them is the answer to all problems.

Funny how marxists hate the rich but have no problem when the evil rich fund their anti American organizations.

Because they are all hypocrites.

OT has to be required under the Fair Labor Standards Act in order to deduct it.

Individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay, generally, the “half” portion of “time-and-a-half” compensation, that’s required by the Fair Labor Standards Act.

https://www.irs.gov/newsroom/one-big-beautiful-bill-how-to-take-advantage-of-no-tax-on-tips-and-overtime

Insiders are governed by the Department of Labor and are non-exempt employees under the FLSA and can deduct their OT. Their OT is required under 29 USC § 207 of the 1938 Fair Labor Standards Act.

Drivers are governed by the Department of Transportation and are exempt from the required OT under 29 USC § 207 of the 1938 Fair Labor Standards Act. So drivers cannot claim the tax deduction. So no amount listed in Box 14 for drivers.

Exemption under the Fair Labor Standards Act (FLSA)

Revised November 2009

Section 13(b)(1) of the FLSA provides an overtime exemption for employees who are within the authority of the Secretary of Transportation to establish qualifications and maximum hours of service pursuant to Section 204 of the Motor Carrier Act of 1935, except those employees covered by the small vehicle exception described below.

1. Thus, the 13(b)(1) overtime exemption applies to employees who are:
   
   Employed by a motor carrier or motor private carrier, as defined in 49 U.S.C. Section 13102 (see Employer below);
2. Drivers, driver’s helpers, loaders, or mechanics whose duties affect the safety of operation of motor vehicles in transportation on public highways in interstate or foreign commerce (see Employee Duties below); and
3. Not covered by the small vehicle exception (see Small Vehicle Exception below).

https://www.dol.gov/agencies/whd/fact-sheets/19-flsa-motor-carrier

I do know several drivers that have already claimed it. So we will see how that goes.

Here's my take. Employers are not required to report OT on your W2 this first year. They are given a grace period for this year only. So, the IRS will not necessarily audit you if there is no amount in Box 14 and you claim OT anyway. And UPS has never made an announcement that its drivers are FLSA exempt and not eligible for the tax break.

The IRS allow you, for this year only, to calculate your OT using paystubs.

Next year will be different. If there is nothing in Box 14 and you claim OT anyway, it will trigger a red flag with the IRS.

Now, I may claim the OT anyway and see what happens. The IRS can come back at me at a later time and say that I am an FLSA exempt employee and they want their tax money back with interest. If it more than a month or so down the line, maybe even years, I will have made more on my refund from OT than the IRS will charge me in interest.

They can access a penalty, for fraudulent filing to avoid taxes, but with all this being new, I highly doubt it. The law is a little confusing. No tax on overtime, if you qualify. Who is exempt? Who is not?

I would just tell them that I had no idea I was an exempt employee. What is the FLSA and why am I exempt. Claim ignorance.

I would have to pay the money back with interest, but I'm sure without a penalty.

Now, if the IRS never audits my return....well, I'll be a few thousand ahead plus the interest or gain on the money.

Next year will be different. The employer has to report qualified OT.

Pretty much where I'm at

Well, my tax accountant says he sees no reason why I don’t qualify. 🤷‍♂️

You’re being bamboozled…🤣🤣🤣 Trump is gonna keep the money. 😂

I trust my tax guy, although this tax law is confusing and kind of a mess.

The tax code has almost always been set up to create criminals out of normal people who make honest mistakes.

If they audit you the odds are they will find some mistakes. Sometimes even in your favor.

Can’t qualify if you don’t work.

Yup, all tax money goes to the President. That's how it works. 🙄

Nevermind that he is the only President to ever donate all of his salary to charity. Nothing to see there.

Finally got my W2, February 7th. Yay, box 14 empty. Either UPS just isn't including this year or they figure we're exempt.

Someone posted a shot of theirs last week with qualifying hours. What position are they?