[ SECRET POST #2763 ]

[case]

⌈ Secret Post #2763 ⌋

Warning: Some secrets are NOT worksafe and may contain SPOILERS.

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Notes:

Secrets Left to Post: 03 pages, 060 secrets from Secret Submission Post #394.
Secrets Not Posted: [ 0 - broken links ], [ 0 - not!secrets ], [ 0 - not!fandom ], [ 0 - too big ], [ 0 - repeat ].
Current Secret Submissions Post: here.
Suggestions, comments, and concerns should go here.

Comments

There is prob at least one person good with money on here

[(Anonymous)]

My boss is also my landlord (he is an awesome boss AND landlord). My sis mentioned a friend of hers who also rented from the person they work for. He would have them take his rent money out of his check BEFORE taxes and deductions.

I was wondering if there would be a benefit of to do this? Before taxes/deductions one weekly check is $25 more than my rent (after taxes it is $14 less).

Would this benefit both myself and my boss/landlord?

Re: There is prob at least one person good with money on here

[(Anonymous)]

I'm watching this thread because I'm wondering if that's legal.

Re: There is prob at least one person good with money on here

[(Anonymous)]

Nobody would necessarily get more money, if that's what you're asking. Anything that comes out of checks pre-taxes just gets taxed later so long as honest accounting is happening. If there's a record of your rent being removed pre-taxes, then the additional taxes will be taken out when you get your W-2 and file your return. So, you'll see less of a return or have to pay in. Rent isn't tax deductible or anything.

To the other anon, yes, it's legal. A lot of retirement or insurance plans have the option to have the monthly fee deducted before taxes, but like I said, those taxes will show up later.

Re: There is prob at least one person good with money on here

[(Anonymous)]

[Other anon] Welp, that was edifying.

Re: There is prob at least one person good with money on here

[(Anonymous)]

There is not a legal way to (significantly) benefit from this. If things are done honestly, then the rent money would later be reported as part of your income when you file your taxes, which means that you'd end up paying taxes on it then.

Otherwise, pretending as if the rent money doesn't exist (that you didn't earn it/that your landlord didn't get it for rent) is illegal. Now of course, in this situation you'd save money by not paying taxes on your rent income, especially if that ends up bumping your net (reported) income into a lower tax bracket - but I'm a painful stickler for the rules, so I wouldn't do it (IMO, it's not worth having the IRS come after me/him later, even if that's a rare possibility).

As a technical note - you could legally claim a slight advantage in having lower deductions (by having the rent money taken out of your paycheck beforehand, and only later reporting it) because you'd have the money in your possession longer and could possibly earn interest on it or use it for stocks or something...but that's obviously not likely to yield significant gains.

(Ignore the last paragraph if it's confusing. Basically: yes to illegal benefits, no to legal ones.)