IS WORKING OVERTIME WORTH IT? Taxes and Overtime

A complete guide on how taxes and overtime works. In order to understand "Is working overtime worth it?" We must first understand how our income tax system works. Once we know how taxes work and how it relates to overtime then you will find out there are A LOT of misconceptions and myths about whether it is worth it to work overtime. For example, working overtime does not change the taxes on your regular income. Period. There is no "buffer zone" or "tipping zone" where if you work a certain amount of hours you change your entire tax bracket thus making working overtime not worth it and mathematically illogical. You will pay more taxes (because you're taking home more money) and it may put you in a higher tax bracket but tax rates are progressive. Meaning, whatever tax bracket you end in (Ex: 12%, 22%, 37%) that doesn't mean you paid that percentage of taxes on all the income you made. It works progressively up the ladder throughout the year.

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00:00 Intro
00:57 Overtime vs No OT
04:50 How Taxes Work
07:13 The Buffer Zone Myth
08:23 Where The Money Goes

#timwolffe #personalfinance

[-Re--born-]

This video was awesome, you took a complicated subject and explained it simply in an easy to understand way.

[daboonies]

I used to work a butt load of overtime. Now I only do full time. I learned that time is worth more than any amount of money.

[Mandeebah]

Had a convo with my friend yesterday and he told me working so much extra overtime makes no sense so I did my research and I’m glad I found this video. Imma continue to grind working overtime

[jakemclaughlin]

Thank you so much for this. I'm a 20 year old guy in construction working overtime and had never understood any of it. I've never had so many "aha" moments in the span of 13 minutes. Incredible video.

[justingrimes]

The harder you work the more you’re penalized, . Your 70 to 80 Hour work weeks go to support people that work zero hours a week.

[TheNachris]

Perfect for young and older folks trying to understand how overtime pay really works out! Thank you Tim Wolffe

[JakeSibley-qlsq]

I worked 14 hours overtime every week almost an entire year. My base pay before overtime was around 650 a week at 16.50 an hour. The 14 hours a week overtime made my check 750 a week. 14 hours for 100 bucks, 4 late days and my Saturday leaving me only Sunday for almost a year. At the end of the year my fed tax gave me 50 bucks and state 47. Now I work two jobs one full time and one part time. And those extra 14 hours now I work is give me 230 bucks

[seangreen]

This was great completely clarified all my misconceptions about overtime and taxes, thank you for this

[garrisonray]

Thank you so much man, I work overtime every week and this really cleared things up for me!

[orlandocmercedes]

I'm not a native English speaker and I can tell that I understood everything! Thank you 😊

[bdbmanny]

Very well spoken . Now I fully understood the system

[Kevin-ORM]

I work 110 hours in a 2 week span, the next 2 weeks I work 117.5. I got just over $100 with the extra hours. I netted over the course of the 117.5 hours, .50/hr less than the 110 hours. Deductions did not change.

[eddierobles]

Tim thank you so much for this video. You have cleared so much misinformation about this topic . After all these years, not even my cpa has taught me this . 👍👍👏👏

[jewelrybox]

I am halfway through the video, and I had to pause, subscribe and write this comment. This is the most I have ever learned about YOU so much for sharing this information!!!!
I am starting my first “real” job and I was so curious about taxes and overtime and started to watch YouTube videos and saw people talking about “overtime is a waste” … That was not making no sense to happy that I found your video

[calidecali]

I get paid 30 an hour as a machine Operator. Anything over 8 hours is time and a half. On days off i get paid double time. Im going to keep grinding my days off hell yeaaa

[bujabusiness]

Thank you for explaining it to me that way I did learn something from the video also how the withholding algorithm can affect people that work overtime

[franciscofierro]

This is the first video that I’ve watched that made sense it’s well explain you broke it down that is was easy to get thank you for this info you’ve gained a new subscriber 🙏🏽🙏🏽

[kcross]

Thanks, man! Super appreciate your info on this one.

[dragonthebeast]

Great stuff man!!! Love the part about th3 withholding 3xplanation!

[Fcers]

this is so important to understand if youre self employed