Conversations with a CFP, Vol. 47 - Working Overtime = More Taxes?
In this throwback episode, we discuss how the US tax system is structured, how to maximize pretax accounts, how to work with a tax professional to optimize your withholding to maximize your take-home pay and what to do if you're facing IRS debt.
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TRANSCRIPT:
Naseema McElroy: 00:02 You're listening to Nurses on Fire, the podcast for nurses by nurses aspiring to financial independence. This is our weekly conversations with the CFP edition. So, every Monday, we'll be joined by certified financial planner, Jason Hamilton, having honest money conversations that guide nurses like you on their path to financial freedom. So if you want to get your questions answered, make sure you head over to nursesonfirepodcast.com/ask to be featured in an upcoming episode. We answer money questions live every Monday via Facebook live. And if you want to join us live, make sure to head over to the Financially Intentional business page on Facebook. Like and follow the page to get notified when we're going live.
Naseema McElroy: 01:08 Have you started on your journey towards financial independence or want to do better with your money and don't know where to start? Well, this training is for you. I encourage you to head over to financiallyintentional.com/live to sign up for our next free masterclass where I'll teach you the techniques I've used and taught my clients to master money and build wealth. During this free training, you'll learn the most powerful weapon you have at your disposal to launch into financial freedom, the budgeting method that will free up thousands of dollars a month to achieve your financial goals, the common mistakes to avoid while paying off debt and how to rapidly slay debt. You don't want to miss this, so head over to financiallyintentional.com/live or click the button in the show notes to register for our next free master class.
Jason Hamilton: 02:11 Hey, hello. Welcome everybody. We are back this week for the Nurse Your Wealth Podcast with me, Jason Hamilton and my good friend Naseema McElroy, the woman who paid off over a million dollars in debt in three years. If you don't know me, I'm a Certified Financial Planner and I work with clients all over the spectrum from 20 years old to 70 years old to help people get their finances in order and create a plan so that they can do whatever they want to do in life whether that's retire early, whether that's start their own business. Whatever it takes, we're here to help you out with your finances. And today we are going to talk about, I think a really good question and maybe a big myth when it comes to how some nurses think and when it comes to that over time and you know all those extra hours you want to stay and to see that wonderful overtime, hourly wage or the double-time hourly wage, but then somehow
you think it all just disappears and go to taxes, which it might be partially the case. But there's a big question where people say, why should I work more when just everything seems like you're just going to go to taxes. So we're going to talk about today, we're going to destroy some of the myths and we're going to talk to you about what that really means when you are working over time, putting those extra dollars in your pocket so that you know how to handle those and you can keep more of that dollar. So what do you think Naseema, how should we be looking at this today for our nurses?
Naseema McElroy: 03:21 I think your job is also your ultimate side hustle. I always find that nurses trying to find ways to work extra money and so they get hounded by a lot of MLMs or network marketing companies. And I really want people to understand that your primary income source is usually the best way to generate extra income and working extra shifts is one of them. But what I hear all too often is that why would I work extra if it's all going to taxes? And I can tell you the things that I do in order to avoid them going to taxes. And I think this is especially timely because as we're recording this, it is, we're going into the holiday season or we already have Thanksgiving, but we have Christmas holiday, which also, you know, that's overtime pay and then we have New Year's holiday, which is overtime pay. And so some of the things that I have done is when I know I'm getting these extra checks, I make sure that I am maxing out my 403B.
Naseema McElroy: 04:22 And because I work at a hospital that's kind of categorized as a government entity, I also have access to deferred compensation. And so that's a 457 account and that's where I'd throw all of my extra money. And so also, and this is something that you should speak more, but there's ways to adjust your taxes. And you know, most HR systems are online and you can go in there and adjust your withholdings and stuff pretty readily. But yeah, those are some things, some tools and techniques that I have been able to employ and so that I am paying myself by working extra. And this is how, you know, if I have a goal that I need to reach, that's how I've been able to do that.
Jason Hamilton: 05:04 Okay. So let's take a step back because you just like laid so much out right there. I want to break some of that down. So let's start with the myth, first of all, you know. Well let's start with our first question. If you work over time, does it mean that all that overtime money is going to go to taxes? You know, I think sometimes we see our checks really get cut. But what I want to talk about first is how a little bit how the tax system actually works here in the US so people can understand that. 'Cause I think there is a misunderstanding with how things work. And then we'll kind of break down to some of the strategies that you mentioned, which I think are great strategies. We want to make sure we're taking people along here really step-by-step on how to think about this the right way.
Jason Hamilton: 05:44 'Cause I think the mindset aspect is number one. And then two, once we get the mindset right, then we can talk about tactics. Is that okay? Okay, cool. So in the US here we have what's called a progressive tax system. Okay. Which and so what does that mean? It means that lower parts of your income you pay less taxes and then as your income increases you're going to pay a larger percentage of the taxes on that money as it goes up. So let me pull up my cheat sheet here. Sorry, I had to step off screen. Let me pull up my cheat sheet here to talk about, I'm talking about 2019 'cause I don't have 2020 in front of me. But we can talk about 2020 in the future, but if you are a single filer, okay. First of all, I want to let everybody know and remind you that you now with the new tax plan have a large standard deduction.
Jason Hamilton: 06:26 Okay? So it's about $12,200 and then asking me 2019 that each you and if you're married, your spouse, gets a deduct off of any income that you make. So essentially you can make the first $12,200 and not pay any tax on any of that money. Okay? So, and that's what people forget sometimes as there are some income, we pay no tax. And then if you are a single filer, the next $9,700 then you're going to pay 10% tax on that money. Okay? And then if you're a joint filer, like if you're married to me, $19,400 so you don't pay your top tax rate on all of your money, you're going to start at zero and then you're going to go to 10 and then you have the 12% bracket. The 12% bracket for single filers is from $9,700 to $39,475 and for joint filers is $19,400 to $78,950. So these are all going up a little bit for 2020 but we're still in 2019 so I think it applies here.
Jason Hamilton: 07:20 And so you're not going to pay any more than 12% of your money until you get past that mark. So a lot of nurses that we speak with have these really high income. So you're probably gonna be up in these next tax brackets, which is now where it's gonna get really interesting to talk about which you talked about with the deferred comp and like 403Bs or 401Ks. So once you get past $39,475 for a single filer, then you have up to $84,200 at the 22% bracket for a single filer and then up to $160,725 for the 24% bracket. So once you get past $160,000 then you're in 32 as a single filer. The joint filers go from 12% at $78,950 and then from $78,950 to $168,400 is 22% and then if you're married $168,400 to $321,450 is your 24% bracket.
Jason Hamilton: 08:07 So we have a range, right? So we start at zero, then we go 10, 12, 22, 24 okay. These brackets are set to sunset in 2025 'cause that's what the current tax plan has laid out. We couldn't get a permanent decrease. So in 2025 they may be going back unless something changes to extend that. But when you work overtime, it's a little bit interesting when you're receiving a paycheck, you know, if you're self employed, you know, like myself, we essentially pay our taxes quarterly. And so if we have a big month and then a slower month, it all averages out. We just pay our quarterlies that way. But what I've seen with W2 workers is if you have a huge paycheck and that particular month or pay period or whatnot, your payroll company is going to make it seem like you actually make that amount of money every month for the whole year.
Jason Hamilton: 08:55 Right? And so what they're trying to do is make sure you set aside enough money so that you don't end up with a massive tax bill at the end of the year. But in reality they're probably overtaxing you. And you know, at the end of the day you are going to get any money back. You paid over in taxes in April or whenever you decide to file. But in that month, you know, in this holiday season when you're getting this overtime and this double time and working on these extra hours, it can really seem like it's all for nothing 'cause you may be seeing 40 or 50% of that money be gone essentially right to taxes. So hopefully that makes sense. Is that clear Naseema, before I kind of move on to? Okay. So you know, when you are, you know, having those big paychecks, you know, and I know nurses that when you start getting double time, you're at 80-100 plus dollars an hour sometimes, right?
Jason Hamilton: 09:40 I've seen that multiple times that you know, it seems like a huge chunk of money in your paycheck, but then when you receive it it's like well, you know, it might only be 30% or 40% of what you expected to see. So how do we keep more of that money? Right? And I think Naseema, you brought up a good point is the first place to start is what are your goals for that extra income, right? Is this money that you want to take home and use? Right? So if you're working for Thanksgiving, Christmas and you get extra time, are you trying to do this so you have a bigger paycheck to buy more gifts or are you trying to do this because you have room left in your retirement accounts, like your 403B's 401K's or 457's that you might have if you're working in nonprofit hospital or government type hospital.
Jason Hamilton: 10:22 And that's where it can get really interesting and a great way to keep more money if you've done good planning ahead of time. Right? So in most nurses Naseema, do most nurses that you've seen have multiple types of accounts? Like the 403B and the 457 would you say it's more rare? [Naseema says "It's less common."] Okay. Yeah, I don't see it too often. I see a lot of 403Bs and then nurses also have a pension option and then sometimes they'll have some sort of deferred compensation option. You know, there's kind of a variability, but for sure most people have at least a 403B or a 401k. Is that fair to say? That is correct. Okay. So I think a lot of young people are not really, may not be understanding is the power of compound interest. Right? So compound interest, essentially what that means is when you put money into your four three B, generally you're going to put it into some investments and then you know, ideally, and on average, if you just keep your money in there, you don't move it around, you should be earning some interest on that money. And when you earn money, let's say you earn money in 2019 and this year you could have had a 15 to 20 plus percent return. If you had your money in the market, and let's say you had finished your 20% return, and let's say you start with $100,000. So if you have $100,000 January 1, at the end of the year, if you didn't put anything and you have $120,000 just to keep the math really easy. And even though you probably did put something in. Well, if in 2020 we have a 10% return and the market doesn't go down, you're not only going to get 10% on the original $100,000 that you made, you're going to get 10% on the $20,000 you made from the year prior, right? So compound interest is where you earn interest on your interest, right? And a lot of young people don't really understand the power of what compound interests can do for you over long periods of time.
Jason Hamilton: 12:03 Warren buffet called it, I think the eighth wonder of the world. It is just really, really amazing. And so, if you're a young nurse and maybe you're not married yet, you don't have children yet, and you have all the time in the world to work these extra hours by doing what Naseema mentioned and putting money into your 403B or 401k, if you put that money in pretax, you will actually keep all of those dollars today because you're not going to pay tax on them today. You will pay tax when they come out, but today you won't have to be paying anything. So I think that would be strategy number one is if you're trying to save more for retirement, let's max out your 401k or your 403B, which for nurses under 50 is going to be $19,000 maximum for 2019 and $19,500 2020 and if you're 50 or over, it's going to be $25,000 for 2019 and $25,500 for 2020. Anything you'd like to add to that, Naseema?
Naseema McElroy: 12:56 No. Thanks for reminding me that it's going up $500. I have to do some adjusting around that. Thank you, though.
Jason Hamilton: 13:03 Yes. Yes. So that's something you don't want to forget. If you have your contribution set to max out every year, definitely you want to look at that before the year starts so that you can get that extra space available of the 19,500 if you are saving that heavily right? For retirement. What do you think is a misconception with nurses in general when they're working this over time and you know they look at their taxes and they don't quite have an understanding? What do you think are some of the big things that we can help them understand when they look at their check and not sure how to really think about it?
Naseema McElroy: 13:31 So I love the way that you broke that down. I think a lot of people look at their check and they just see the tremendous amount that they're paying in taxes. They just automatically assume that all our money is going to taxes. I mean, I know that's how a lot of nurses feel, especially, you know, California, or state where taxes are high as well. Also, this might be an additional question that we should address later, but a lot of people are scared. So there are two ways, a lot of nurses play around with their withholding so that they don't pay any taxes so they can take home money and they usually not doing anything good with it. I do that like they're not like using it to invest in something or usually by using it to fund their lifestyle, which has inflated. And the other thing is is that they're withholding like everything because they're scared of paying the government. And that's probably the tangent that I'll tell you we can probably go on is that, you know, people aren't sure what taxes is like in a tax return and all those kinds of things and how withholdings work and how you should really be working with someone to a address your withholdings to meet whatever your financial goal is. And so yeah, that's a lot.
Jason Hamilton: 14:41 Yeah, no, that's great though. Let's dig into that a little bit. And you did mention the Medicare surcharge and that is absolutely painful for our high earners because that's just money you never get back. So what people may or may not know is for social security tax, which is 6.2% there is a limit. I think it's $128,400. Let me just look at my cheat sheet here or something like that. I remember I was, I can memorize, but sometimes you know, I got to use my cheat sheets here. Yeah. So I'm sorry, it was $124,400 for 2018 it's $132,900 for 2019. So what that means is you're going to pay social security tax, which is 6.2% on the first $132,900 in 2019 but then after 132 that 6.2% stops getting charged. But we have a Medicare charge, which is 1.4 or 5% and there's no limit on that currently.
Jason Hamilton: 15:37 Okay. Yeah. And then if you're a high earner, they're high earner, then you have a surcharge. Okay. You have a surcharge on that, which is if you earn over $200,000 if you're single, or excuse me, if you file tax a single or head of household, it's over $200,000 and if you're married filing jointly, it's going to be $250,000 you're going to paint a additional 3.8% over that portion. So this is where I see if you don't earn 250 but I do have seen nurses earn that much and they're just paying that all year, which is absolutely painful. But if you have that massive paycheck, for example, which makes it look like, as I mentioned, you know, if you made that amount of money all year, you may be getting charged that extra surcharge, even though that's not going to end up that way at the end of the year. So these are things that, you know, I think nurses really should be looking at throughout the year.
Jason Hamilton: 16:27 And in all honesty, taxes don't make sense to a lot of people. They confuse me still. I use a CPA, right? I understand tax planning, but I still use a CPA to partner with to help me do my projections throughout the year because my income is highly variable and I want to make sure I'm staying on track and not end up with a big tax bill. So you had a good point there is talking about withholdings, right? And so when you look at the IRS withholdings table, it's not a perfect science. Okay? So it'll have, you know, how many withholdings do you want? Zero. One, two, three, four. And what most people think is however many people that are gonna claim on their taxes, that's what they should use. So if you have four people in your household, you should claim four. If you have one person your household and should claim one or zero.
Jason Hamilton: 17:05 And that's just really not very accurate. It's sort of a guideline, but it's not really. And what happened with the new tax plan when it was passed, a lot of people thought with this new, I guess you'd call it the Trump Tax Plan, but, but people thought their taxes went up. Right? But in reality, for the majority of people, not all people, but the majority of people taxes actually went down. But because the IRS withholdings tables did adjust and then people did not make the proper adjustments on their withholdings on their W-4s at work, then they ended up actually taking home more money throughout the year, but then that set them up for a tax bill when tax time came. Right? So by spending time, if you are a high earner or you have a big tax bill in the past, it makes a lot of sense to pay your CPA a few hundred bucks, you know, a year and have them check in on your pay subs quarterly or a financial advisor.
Jason Hamilton: 18:00 I do this for clients as well. Or a financial advisor just to look at your paycheck, you know, at least once a quarter. So that if it looks like you're going to be underpaying, at least you either know or you can set money aside and if you're overpaying, then you can reduce down those, increase those withholding's I should say, so that you can take more home. You know, again, it's not perfect. It's a tricky type of thing. But you know, in our original conversation Naseema, you told me that there's a lot of nurses out there with tax debt, with IRS debt because they didn't do this properly and that really shocked me. That's what inspired me really. That was like kind of the key thing, I said, you know, we need to do this for nurses because again, I have family members that are nurses and that really hurts me to see that people are doing something amazing and they're ending up in a stressful situation because they didn't plan properly. How common is that? Can you tell me about what you've seen with people not paying their taxes properly and then types of trouble they've been in?
Naseema McElroy: 18:50 I see it pretty often with my colleagues, but also people who reach out to me get in trouble a lot in taxes just because they just exactly the failure to plan all the time. Like more often than not somebody who has been struggling with IRS issues and trying to deal with that just because not withholding properly. And you mentioned again the pool people should consult in regards to getting help with withholdings.
Jason Hamilton: 19:14 Okay. So the simple one is whoever files your taxes, right? So if you work with a tax professional, if you have a CPA, you know, that type of thing. Most people probably get their taxes filed at one of those local places, you know? Yeah. And it can be okay. But you know, in all honesty, you know, that's pretty, I've seen a lot of problems with those type of players. I've experienced those problems personally 'cause someone wrote off, you know, two things that they weren't supposed to. It's either one or the other and I had to pay back taxes four years later. So now I work with a full on CPA. But, you know, if you work with a good financial advisor that does specialize in tax planning, then that could be another place to go. I could do a whole segment here on financial advisors on who you should work with and who you shouldn't, but simple breakdown is remember these things when you look at FIRE financial advisor, if you want to have the best chance of success of getting a good one is fee only, right?
Jason Hamilton: 20:07 So no commissions, no insurance salespeople. Fee only 'cause insurance sales people can't do tax planning anyways. That's not really something that's really allowed. You don't want to work with brokers. They don't really do tax planning either. But if you have a fee only Certified Financial Planner, okay, so CFP and you want to get one that specializes in tax planning, which again, it's a little bit rare to find that, but those are the questions you want to ask. Hey, are you fee only? Are you a certified financial planner and do you have a specialty in taxes and tax planning? If you say yes to those things and you have a good chance, right? It's not a perfect science, but it's a good chance. But you can work with the CFP, you can work with a CPA, which is Certified Public Accounting. You can work with an EA, which is an Enrolled Agent. An Enrolled Agent is basically like one level below a CPA but CPAs are more kind of business taxes and EAs are still very advanced and they can sit with you in front of the IRS to defend any sort of audit. But they don't really do too much business. They're more on the personal but some business there. But those three of the designations I would really be looking for, you know, when it comes to finding somebody to help you out.
Naseema McElroy: 21:10 I've never even heard of EAs, so I'm learning all this game. [both laugh]
Jason Hamilton: 21:15 No, I'm studying for mine right now. It's just I'm doing it in the evenings as I'm finishing everything else up. You know? It's good stuff, but it's very technical. So that's why I feel if you have someone as an EA behind the name, you're probably gonna be a good shape when it comes to getting tax advisor. Yeah. So when you hear nurses that are ending up in tax debt or an IRS debt, like what do you think's going through their mind? Or what are some of the things you've heard people say or stories that they told themselves about how they're handling it?
Naseema McElroy: 21:44 You know, it's pretty sad 'cause usually they don't handle it until it gets to a point where they're suffering garnishments. And that's another thing that I like to address. Like as far as like fear, like IRS, the IRS is scary. Okay. They're scary to me too. But there's, there's a lot of fear around it. And instead of like addressing it, they're ignoring it or they're like, they always like go to like these, I don't want to say scammy, but you know, these people that say, Oh, we'll help you fix your debt, your, you know, pay off your IRS debt and they're not the most legit companies. And so, these are the things that people are doing instead of, you know, being proactive and you know, kind of taking control of their finances. And so yes, it's pretty scary.
Jason Hamilton: 22:32 Yeah. So as you mentioned, a couple of things that are interesting. So, financial matters are one of the things. So the biggest fears people have in life are pretty much dying and public speaking. Right? And, but when you look at some research studies, it says that people would rather do public speaking than talk about their finances with somebody else. Right? Finances are very personal, but you know, it's a very scary subject for a lot of people. It's an embarrassing subject for a lot of people. The words I've heard used before is I carry shame because I'm embarrassed of my situation because maybe I have, you know, credit card debts or you know, some sort of, you know, I'm not saving enough money. I have IRS debt, you know, or a ton of student loan debt means all these things that people are really fearful of. And you know, when I was spending, I spent about three years before I transitioned into this field just studying a Certified Financial Planner curriculum.
Jason Hamilton: 23:22 And there's a lot of technical knowledge about everything, about investing, you know, estate planning, taxes, blah blah blah. But there really wasn't a whole lot of subject material around psychology and what you have to deal with when you help people with finances to really help them kind of break free that and move forward. So I didn't realize I was going to have to get a psychology degree with my financial background. But what I've come to find is that when people can take that first step and reach out and get some help from somebody who knows what they're talking about with their finances, it really does change so many areas of your life. Because I've seen bad finances cause marriage problems. This caused people to be sick, you know, they continue, they're just always getting sick. And I don't know why. And it really is just the financial stress.
Jason Hamilton: 24:06 They've had things where they fall into depression. There's been cases of suicide when it comes to things like extreme levels on entrepreneurship community and Silicon Valley where people are just oh you know, people invested millions of dollars in their startup and then it ends up failing. They commit suicide. So there's a lot of really the underbelly of the US that there's plenty of success stories, but there's also a lot of stories where people just feel really embarrassed, have shame and fear around their finances. So, you know, the first thing to do is to, you know, get through that fear and reach out to somebody to talk to them to get your initial start. And obviously that's what we do, you know. But you know, I'm going to drop a name of an organization I think is doing good things and there are nationwide because obviously, you know, maybe some people wanna go somewhere to somewhere local and there's a place called Operation Hope that really does focus on credit. Have you heard of them before? Yeah. You know, have you worked with them before or just heard of them?
Naseema McElroy: 24:57 You know, I actually went to Operation Hope. They have other classes too, like starting a business class. And so I have, I've actually just been a student there, so it's a good organization and yeah.
Jason Hamilton: 25:07 Yeah. So we work with them through the nonprofit work I do and they do a lot of things in the community. But you know, when you brought up these whole, you know, settle your IRS debt type companies or fix your credit type companies, the majority of that stuff you can do by spending an hour doing Google and YouTube searches. Right? I really don't think they do a lot of things that you can't do on your own. And what I've seen more often than not is they're going to put you in a worse situation first before they make it better. You know? And a lot of places, if they start telling you to let all your payments go so then you can settle them, that's really not the right way to do it. And so these are things that there's so much to address. We have a lot of things to talk about.
Jason Hamilton: 25:45 We could spend a whole episode on that. But if you are facing IRS debt, what you don't want to do if possible is let it go to garnishment because it becomes so difficult to get out of there. The IRS will set you up on a payment plan that is reasonable. And you know, actually you could probably pay way smaller percentage of what you need to pay each month. But at least sure you are on a positive track. You're not getting your paychecks garnished. And like, you know, probably I think it's up to 25% they can take, which is completely out of your control. And so you wanna avoid that at all possible. And if you're getting close to that right now, you know, reach out, you know, send one of us an email, reach out to operation, help somebody to get some help because you do not want to let it go that far. And if you're already getting there at this time of year and you're going to be facing it in 2020 when you go file and it's really time to get some help on that. But I think we'll spend a whole episode on maybe credit on how to handle that because they were already, you know, almost 30 minutes in here. But from what you've seen nurses doing, what are they currently doing that you've seen that maybe may not be the right thing on how to handle this?
Naseema McElroy: 26:43 Like I said, they're just operating from a place of fear and they're just not addressing it. They're just ignoring it. Kind of just like they ignore the rest of their finances. Then just continuously getting in trouble, but also just not knowing who to reach out to. And so that's how these people kind of get in these predatory kind of people that aren't necessarily working for your best good. And I think that's another issue. Like we talked about, like the whole life insurance thing. That's another way people get into people that are less financially educated space is like they sell these credit repairs, these tax repair kind of things, and they fall victim to that. It's pretty sad. Yeah, that's what I see.
Jason Hamilton: 27:23 Should we shift gears and piss off some people and talk about whole life insurance and how we see it as a huge scam in the low income communities and specific communities in general or should we save that for another day?
Naseema McElroy: 27:33 We should save that for another day because I feel like that deserves its own conversation because yeah, I'm pretty, it pisses me off a lot and I have a lot to say around that and I'm sure we'll probably get some good feedback around that. So let's say that for another episode. Okay.
Jason Hamilton: 27:48 Okay. So if you guys are watching here, do you enjoy what we're talking about? Please. We love to hear your feedback. Leave us a comment below and we want to dig into some of the biggest issues that really I don't see a lot of people talking about. And you know, we have our own biases, right? 'Cause we all, we both came from different places. But I think if you come from a low income background, a lot of people think it's just them. Right? And we're probably going to talk about some things that are like, I don't know, may upset some people, but you know, I want to talk about how things don't really have to do with skin color, but they have to do with where you came from and the mentality of the people around you. Because you know, I think when you come from a low income background, it's a whole different mindset than if you come from a more moderate or high income background.
Jason Hamilton: 28:25 And I've seen people, it doesn't matter their skin color in those situations and either the right behaviors or wrong behaviors and it really has nothing to do with what they look like, but it does have to do with how they think and how they think is impacted by who's around you. And you may spend time around a certain community, but I really want to break some of these, I'll call them lies or fibs or you know, misconceptions that people have that they think it might be just them. Because I work in all different communities. I have black clients, I have Latino clients, I have Asian clients, I have middle Eastern clients and I have white clients. And so I've seen you know, a lot of things that really are not that different. And in all honesty, the people that seem to be the best with money or people that weren't even born here, by the way, people, people that were, that were immigrants that came here regardless of where they came from, they seem to be a whole lot better than Americans.
Jason Hamilton: 29:11 And, it doesn't matter what you again look like. Once you get to the third generation here, that's when the American mindset starts to set in and consumerism, overspending, lack of planning and you know, complaining about whatever it may be really comes into people's families. So I don't know, you know, I think it's going to be interesting. People are going to send us some hate mail, but that's okay. We need to be real and if we can't be honest and get to the truth, then we're never going to be able to move past that and get to fixing people's current situations. That's really how I see things. So we're hitting about 30 minutes here. What do you think we should wrap up on for today when it comes to this particular subject of our big question today of should I not work more because the taxes or you know, what would he think should touch on here?
Naseema McElroy: 29:55 I think ultimately the bottom line is like, it's not really about working more, it's not really about paying taxes, it's really just understanding your financial situation and what your goals are and just knowing what resources you have available to you that you should have in your back pocket as your team in order to make sure that you're meeting your financial goals.
Jason Hamilton: 30:16 Yeah. So you know the things that we should be learning some things in school, right? We learn about parallelograms and computer, but we don't learn about filing our taxes. We don't learn about changing the oil on our car. We don't learn about doing a household budget to make sure we don't end up in a bunch of debt. We don't learn about any of these things. So we want to bring you the real education here. What the life skills that you need from a financial perspective to succeed. So today, the myth we wanted to bust was if you work over time, then all that money is going to go to taxes. And the reality is that it won't. But if you do, if you know you're going to have a huge month the following month, you may want to change some things either like increasing your 403B contribution, 401k contribution or changing the withholdings on your W-4. I always say 4-W9 I always get that those two confused. On your W-4 so that you can take home more money that month and then just change it the following month if your HR allows us type of things so that you can keep more money today versus letting the IRS borrow it until they give it back to you at tax time.
Jason Hamilton: 31:15 You know you are not gonna be paying extra, your taxes are based on a, you know, a marginal system where the more you earn, the more you pay. So it may seem like a lot today, but those two tactics of either judging your withholdings or putting more money, increasing the percentage that goes in your 403B or 401k are two great ways to keep more of that holiday extra earnings or that overtime earnings you may be earning at this time of year so that you keep it from the IRS. Which again, I don't have a problem with IRS, you know, we ought to pay our taxes. We have a lot of opportunities here in this country, but I don't want anybody to pay a dollar more than necessary. Right?
Naseema McElroy: 31:47 I'm not trying to give the government an interest free loan.
Jason Hamilton: 31:50 Thank you. Yes, yes, exactly. So I think we can wrap on that for today and if you, if there's your first time here, welcome. Thank you so much for tuning in. Our plan is to be here every Monday at 10:00 AM Pacific Trime, which would be 1:00 PM Eastern time. And of course you can watch this later. And then we are working on a podcast in the background. We'll get that out shortly and let you guys know about that. But please, if you want to be notified about our current lives and you want to talk about things in the nursing field, the financial field, make sure to like and make sure you turn on notifications for our pages so that you get notified when these come up. And we would love to have you here and if you have any questions, comments, or thoughts about what we had talked about today, leave them down in our comment section and we'll be happy to address those as soon as we possibly can. Anything else you wanna leave us on today, Naseema?
Naseema McElroy: 32:36 No thanks for joining us. And remember to tune live every Monday at 10.
Jason Hamilton: 32:41 Alright, we appreciate you guys. Have a great week. Let's start this week strong. Let's finish the year strong. Earn that extra money but keep it, put it in your 401k, put it in your 403B, max out that $19,000 or $25,000 depending on how old you are. Keep that money so you don't give away an interest free loan, up increase those percentages today and do everything you can. Keep the government's hands off of it. And it says, then we will see you next week. Have a good month. Bye bye now.
Hey there I’m Naseema
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