From Pies to Prosperity
Welcome to the “From Pies to Prosperity” Podcast. The show where we navigate life’s financial obstacles and learn the truths of personal finance, one slice at a time. If you’ve asked yourself, “why wasn’t I taught this growing up?”, well, you’ve come to the right place. Your host, pizza guru, and Certified Financial Planner, Cooper Casillas, is on a mission to educate others and inspire financial freedom. It’s more than advice, it’s peace of mind... and pizza!
From Pies to Prosperity
FPTP Episode 16: Tax Withholding
Are you unknowingly giving Uncle Sam thousands of dollars in interest-free loans each year? If you're like 70% of Americans who celebrate receiving a tax refund, you might be missing a crucial financial opportunity.
Tax withholding—that mysterious process where money disappears from your paycheck before it even reaches your bank account—is rarely understood. But mastering this concept could put thousands of dollars back in your pocket throughout the year instead of waiting for a refund.
Think of your tax obligation like filling a bathtub: you want it just right. Too much water (overwithholding) means you've loaned the government your money interest-free. Too little (underwithholding) means a painful bill in April. The key to perfect withholding lies in your W-4 form, which most people complete once when starting a job and promptly forget about. Major life events like marriage, having children, or buying a home should trigger a W-4 review.
We also tackle common misconceptions about bonuses. Contrary to popular belief, bonuses aren't taxed higher than regular income—they're just subject to different withholding rules. For self-employed folks and contractors, we explore the importance of quarterly payments and dedicated tax savings accounts to avoid April surprises.
Ready to stop giving Uncle Sam an interest-free loan? Listen now to learn how updating your tax withholding could be one of the simplest yet most effective financial moves you make this year. Subscribe for more financial insights that transform complicated money concepts into practical, actionable advice.
This episode's pizza and score:
Pizza Hut - https://www.pizzahut.com/deals?gclsrc=aw.ds&ds_rl=1149043&gad_source=1&gad_campaignid=122485240&gbraid=0AAAAADyJNr0l7T4I2Ob8ukhN5_aPac8wS&gclid=CjwKCAjw1ozEBhAdEiwAn9qbzaXTAPRiAcPY-mRDHHvfxLTs5MJ1xdnD_AlomiWkbro6jroX1Q5fIhoC4zQQAvD_BwE
Cooper's Score: 6.4
Corinne's Score: 8.8
From Pie's to Prosperity is an educational podcast geared towards helping you navigate life's financial obstacles, one slice at a time. Hosted by Cooper Casillas, this podcast will feature special guests, industry professionals, and topic summaries to help simplify complex financial decisions.
To view past FPTP episodes click here: https://www.buzzsprout.com/2100362/episodes
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Website: https://rayolson.net
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This information provided is strictly for educational purposes only and does not constitute financial, investment, tax, or legal advice. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Ray Olson, LLC is not affiliated with Kestra IS
Thank you for listening!
Welcome to the From Pies to Prosperity podcast, the show where we navigate life's financial obstacles and learn the truths of personal finance, one slice at a time. If you've asked yourself why wasn't I taught this growing up, well, you've come to the right place. Your host, pizza guru and certified financial planner, cooper Casillas, is on a mission to educate others and inspire financial freedom. It's more than advice. It's peace of mind and pizza.
Speaker 2:All right, welcome back.
Speaker 3:Yo All right, welcome back Yo.
Speaker 2:We are back after the successful completion of 75 Soft for Corinne. Congratulations.
Speaker 3:Oh, golf, clap, golf, clap, golf, clap, golf snap, or poet snaps, poet snaps.
Speaker 2:She did amazing and she's actually continuing the habits.
Speaker 3:Habits Continuing the habits.
Speaker 2:Habits moving forward, which is, I think, good.
Speaker 3:Well, I did continue the habits up until camping weekend.
Speaker 2:Yeah, we just got back from camping.
Speaker 3:And I feel a little fatigued. Galleries don't count on camping, I feel fatigued.
Speaker 2:You have to have s'mores and tell them about the s'mores that you made. Well, there was there's photo evidence.
Speaker 3:There was lots of versions of the s'mores, some with fruit, some worked, some did not work.
Speaker 2:The dates didn't work.
Speaker 3:The date you think it'd be like a caramelly marshmallow. Nope, Gross Gross. Strawberry was good, Banana was nice. Then regular s'more, Reese's s'more, the usual. Then I made these what they're called crack s'mores, which is like Christmas crack, which is crackers with brown sugar and butter.
Speaker 3:So it's like a crystallized cracker that a good way to describe it like a. Yeah, so you do that with graham crackers, which, if you're going korean. Why would you add more sugar to the scenario? Why not? Why not? It was, in my opinion, delightful. I'm afraid I'm the only one that felt that way, but I did ones with regular chocolate and Reese's and put a marshmallow in there, and it was just really magical.
Speaker 2:Divine.
Speaker 3:I just my mouth's salivating thinking about it now. I was really sad I didn't have one tonight, and then we may have taken it another step further to. We had some pastries and I went you that would probably be good with some marshmallow on it, roasted over the fire. I was right.
Speaker 3:And then the, the final, the final, what you call it final boss was the fact that we still had leftover French toast, so we quickly threw that on the black stone, smothered it in some peanut butter nope, not peanut butter and some marshmallow, added a crack cracker.
Speaker 2:And plenty of chocolate.
Speaker 3:And yeah, there's photo evidence of me eating it and I did feel like a toddler.
Speaker 1:Like.
Speaker 3:I knew my hands were completely covered.
Speaker 2:My mouth gone. Yeah, you used your shirt. I used my shirt as a napkin.
Speaker 3:I feel like there's a point where you had so much sugar in you that you act similar to when you are drunk, and I might have had a sugar drunk high, some combination of that. I was witnessing it firsthand, me and Emily looked at each other a couple times during this. I was just really in my happy place.
Speaker 2:I know which was interesting, because this was camping, and we've gone camping, I don't know, five or six times in our relationship maybe, and Corinne has never had a positive experience. Really, I mean there's been positive moments, but overall she's been like. I'm not the biggest fan of camping and that's partly my fault, because I like to go more adventurous when it comes to camping and kind of rough it a little bit. So this was our closest to glamping experience, where she had bathrooms.
Speaker 3:I was clean sometimes.
Speaker 2:She had a shower, she had campsite water.
Speaker 3:I did feel a little silly going to shower to then proceedingly put three more layers of bug spray on my body but it helped me mentally. That's good. That's what matters.
Speaker 2:Yeah, but I'll take it. I mean if it was delightful. She enjoys it and we can go out in nature. No cell phone service for three days and just yeah, I didn't even care. Be on the water. I mean, that's it for me, me.
Speaker 3:I felt like a child in the middle of the land you felt so safe laying in the Sun and not a single thought running through my head it's like a golden retriever, so we should be just happy little, happy little puppy.
Speaker 2:Yeah, well, enough of well enough of that enough of that wait, sip break speaking of, we have to tell them about my sinus infection, so that I can excuse myself oh, okay, well, I'll tell them real quick. Corinne has a sinus infection whoop-de-doo shocker.
Speaker 3:She has them like all the time and that's why she's having surgery tomorrow, hopefully hopefully, unless they say I can't because I have a sinus infection, which is really ironic. Yeah, can't get the sinus infection prevention procedure because you have a sinus infection.
Speaker 2:It's the one where they put the balloon up your nose and then inflate it so it clears out the pathways, I guess.
Speaker 3:Not clears out, just makes it bigger. Yeah, anyways, cross your fingers that they let me get it, but I doubt they will, but who knows?
Speaker 2:Hopefully that goes well. Yeah, so You're going to be high out of your mind. I don't have to drive you, huh.
Speaker 3:I feel like it'll just be a fine experience. I feel like it'll be like when you're on laughing gas. Whoa, I just got way too close to the mic. I almost ate you guys, sorry.
Speaker 2:Sorry if you heard Alright.
Speaker 3:Well, let's get to the chase, let's cut to the chase. Let's cut to the chase. Enough of the chit-chat. Oh my god, no one cares about the chit-chat.
Speaker 2:Everyone's like, hey, skip Two times speed, that for sure. What are we talking about today?
Speaker 3:I have no idea. Am I supposed to know?
Speaker 2:I feel like, if you're going to be a co-host moving forward, you should know what the topics are.
Speaker 3:This isn't my fault, because my co-host didn't tell me.
Speaker 2:Oh what.
Speaker 3:Give me a rhyme, give me a riddle.
Speaker 2:It has to do with Uncle Sam.
Speaker 3:That's extremely broad.
Speaker 2:No, that's literally. Oh tells you exactly what it is. What do you think it is?
Speaker 3:It's about money.
Speaker 2:Uncle Sam.
Speaker 3:I know big old Uncle Sam.
Speaker 2:The IRS.
Speaker 3:Yeah.
Speaker 2:I thought Uncle.
Speaker 3:Sam was the. I don't want to say that.
Speaker 2:What no? Say it Too many people listened. Santa Claus.
Speaker 3:No, say it, too many people listened Santa Claus. No, I thought it was the president, big ol' Uncle Sam.
Speaker 2:Big ol' Uncle Sam.
Speaker 3:The president.
Speaker 2:Oh man, yeah, Maybe I don't know, uncle Sam.
Speaker 3:Uncle Sam is the IRS.
Speaker 2:Yeah, he's the tax guy.
Speaker 3:Sorry guys, I didn't know that one.
Speaker 2:So we're talking about Uncle Sam and taxes today. Yay and specifically tax withholding, Kind of like a one-on-one on tax withholding.
Speaker 3:I picture you holding money in front of my face and then snatching it back and going no, no, no.
Speaker 2:So what do you think? Tax withholding? I just gave you the visual representation.
Speaker 3:That is what it is. Huh, they say you want this. No, no, no, no. Tax withholding is when you get paid. And then there's all the things that they take out of it because it's tax withholding yeah, there you go I love keeping you on your toes.
Speaker 2:So amazing. You don't know Uncle Sam is, but you know that. When's the last time you looked?
Speaker 3:at a pay stub and checked His eyes just lit up so much when I got that.
Speaker 2:When's the last time you looked at a pay stub and checked your tax withholding?
Speaker 3:When I would get them in the mail. I would see it every time, but my current job just does. It does electronically, so I haven't looked at it. You never look at it no, I just know it's good you just know it's good.
Speaker 2:What? How do you know it's good?
Speaker 3:because everyone says oh, you're a teacher, oh you got, you got good stuff. Going on, you got good stuff.
Speaker 2:Yeah, I know your teacher. You don't get a teacher discount from uncle Sam.
Speaker 3:I get 20% off a good amount of things okay, not taxes, not taxes, man, do you know how clutch that would be?
Speaker 2:To be like oh.
Speaker 3:I got a teacher discount. Teacher discount 20% off.
Speaker 2:Actually, teachers used to be able to deduct classroom supplies and expenses, but now you can't really do that.
Speaker 3:No, they're even more finicky. They're super finicky about that stuff.
Speaker 2:Yeah Well.
Speaker 3:If you want to donate to my classroom, I have an Amazon wish list.
Speaker 2:Hey, you can do that on the podcast. Strike that from the record. Jack, what?
Speaker 3:No, I mean support the public. It's almost my birthday. Why can't I do this?
Speaker 2:I don't know what the legal ramifications of that are in this podcast.
Speaker 3:Oh, okay, I'll have to consult with compliance on that one. Don't do it.
Speaker 2:Public do it Okay, but taxes, but taxes, tax withholding. So you know that when you get paid, your employer automatically deducts taxes from your paycheck so you don't have to actually write a check to the IRS they do not match it, no, that's they only match their 401k? Hey, I got that, okay, no, they're not, they're just, they're pulling it out yeah, so you don't, you don't ever really write a check to the IRS, right?
Speaker 3:Yes, unless you did something really bad. Why are you giggling?
Speaker 2:Like what? What could you do? That's so bad that you would have to write a check to the.
Speaker 3:IRS? I don't know.
Speaker 2:You tell me.
Speaker 3:Like you, don't pay your taxes.
Speaker 2:Oh yeah, Then you would have to write a check to the IRS.
Speaker 3:Which I don't have any experience in that.
Speaker 2:If you don't withhold yes, then when you go and you file taxes in April, you'll owe a lot.
Speaker 3:And you have to write a big check. In fact, make the check out to big ol' Uncle Sam.
Speaker 2:Big ol' Uncle Sam, mr President. Mr Presidente, uncle Sam, so when you are withholding your taxes, ideally what you want to do is like think of like a bathtub grin. I'm thinking right, because you're a visual person so think of rubber duckies in there and then imagine you're filling up the bathtub and over time the bathtub fills up. But if you fill it up with too much water, what happens?
Speaker 2:oh, the rubber duckies are gonna fall out never flows and if you don't put enough water and it's like well, dang it, I can't. I can't pay this, so ideally what you want to do is you want to withhold just enough to fill up the tub and when you go and you file your taxes, you really don't want to withhold just enough to fill up the tub and when you go and you file your taxes, you really don't want to get a big refund and you also don't really want to owe a lot in taxes.
Speaker 3:You want it to be just right.
Speaker 2:Like the.
Speaker 3:Goldilocks? Nope, yes, goldilocks and the Three Bears, just right.
Speaker 2:Yeah, fair enough. So when you go and you file your, taxes.
Speaker 3:Corinne, do you know if you get a refund or, uh, you owe money? Well, there's been some years where I have owed, but this past year, I believe, I got a refund. Yeah, but previous years I owed money. It was actually not a fun time to do taxes for me for a while generally speaking, you've been kind of right on, right on target you haven't owed a ton and you haven't like. Well, yeah, but it's still more fun to get than to give.
Speaker 2:Ah, there it is. There it is. That's what everyone that's pretty much how everyone feels Is. Everyone would prefer to get a big tax refund, right.
Speaker 3:Yeah, so they want to overflow the bathtub a little bit.
Speaker 2:Most people psychologically do, but mathematically you don't want to do that. Why do you think you wouldn't want to overflow the bathtub?
Speaker 3:Because then you get so mad when you look at your paycheck and then you see the little net pay and the gross pay and you go what the heck?
Speaker 2:Yeah, that's part of it. Yeah, but essentially, let's say you got $5,000 back on your tax return in April.
Speaker 3:Sounds like a good day.
Speaker 2:Sounds like a good day, a little good day for Uncle Sam. Oh, why do you think that's it? He's so happy Because you just lent the IRS $5,000 for the year interest-free. I'm not going to pay you any interest for that.
Speaker 3:No.
Speaker 2:Yeah, no. So if you had that $ thousand dollars in your pocket, you could have made interest on it. Oh my god, I have to sneeze oh my gosh but I'm no keep going, I'm just why are your eyes, why are your eyes doing that? It's so watery, it's scary oh it's gone so it's. You just shocked me so much with that that what happens if you are withholding too much or too little? How can you change that? Do you? Do you ever remember filing any forms when you start a new job? To?
Speaker 3:set your with oh boom, you knew it off the top of your head. Oh my God, I'm having a good day.
Speaker 2:Yes, your W-4.
Speaker 3:Yes, the W-4.
Speaker 2:That is it.
Speaker 3:Yeah, I filled that one out a lot. Yeah, every job.
Speaker 2:They just updated the form so it used to be like you would claim zero or one or two, like how many people are dependent so you can claim on the tax return. I was very confused the first time I filled that out. Now it's different and they changed it, so it's not. It's not zero, one, two, whatever yeah and it's. It's a little bit more complicated, but once you like.
Speaker 3:Why did they do that?
Speaker 2:it gives you a little bit more ability to customize, like how much is withheld. So, um, if you are withholding too much, I would highly encourage you to update your w-4. And not only that, but you also want to update your w-4 anytime there are any major life changes, right? So let's say, you get married, will your tax?
Speaker 3:brackets change. Maybe you have to update your W-4 because of that, you have kids. Dependents.
Speaker 2:You have a child tax credit Dependents. Those will impact how much you owe in taxes. You buy a house. You have a lot of charitable deductions. Whatever the case might be, if something changes and you are going to owe more in taxes or less in taxes as a result of it, it's probably a good idea just to up your your w-4, okay how?
Speaker 3:where do I find it?
Speaker 2:cooper, wwwyeah, you can go to the irs and just search for w-4 and it'll come up. But honestly I would just ask your HR department. Most of the time it's all done online so you can kind of update it online, but it depends on you know what company you work for and the payroll and all that stuff.
Speaker 3:Oh my gosh, we didn't tell them that I'm getting licensed, Surprise.
Speaker 2:You're going to become an advisor, licensed fiduciary.
Speaker 3:No, that my official teaching license got sent to the Virginia Department of Education.
Speaker 2:Oh wow, it's kind of a big deal.
Speaker 3:Congratulations you mentioned HR and I had to send all that to HR. Shout out, Jessica, hey girl.
Speaker 2:Well.
Speaker 3:Anyways In the spirit of congratulations no-transcript. Eat some pizza.
Speaker 2:Oh, there it is, and maybe you can blow your nose a couple times.
Speaker 3:I'm trying to do it silently.
Speaker 2:Yeah, okay.
Speaker 3:Cooper's been enjoying the show.
Speaker 2:Let's go, let's oh, oh, oh, oh, oh.
Speaker 3:Stop, I'm just doing silent things, just silently blowing my nose All right?
Speaker 2:Well, she silently blows her nose, which I don't know if that's actually possible, but we're gonna find out. I'm gonna go grab the pizza and then we're gonna come back with the fresh pie in front of us oh, I need some water.
Speaker 3:We'll be pretty controversial. For us it's one of the best days, but for others it's a day of judgment.
Speaker 2:It might be, yeah, so little known secret. We do have a chain nearby that we actually do a joy from time to time they do get a good amount of our income we have not been in like a year, um, so I would not say that by any means. Okay, the neighbor who does papa john's, that's way more frequent yes, but of of all the pizza places, of no.
Speaker 2:Of all the chains, this one does get if we're gonna go to a chain we're going in place, we're going here, yeah, yeah and I used to work at Domino's for years, and so I just don't really eat much Domino's anymore. Yeah, cuz I had it so much. So it's not Domino's, it's not Papa John's. I guess people can guess what it probably is. What is it, corinne?
Speaker 3:Pizza Hut.
Speaker 2:Pizza Hut, and I think Pizza Hut is known as one of the crappiest chain pizzas.
Speaker 3:No, no, no, Little Caesars is down there.
Speaker 2:Yeah, Little Caesars is definitely we're not there, we're not there. It's so good I don't know what to say.
Speaker 3:I don't get the hate. It doesn't taste healthy, that's the point.
Speaker 2:And, as you guys know, corinne was doing 75 soft, I was doing 75 hard for a little bit and there was a new Pizza Hut item that came out and we're like, oh, we got to try that the audacity to do it during my health era. I know and we don't really eat much pizza anymore, and so we're like we have to just save it for the podcast. If we're going to get it, we have to do it on the podcast. So we're doing it on the podcast. We are doing Pizza Hut on the podcast.
Speaker 1:Woo Pizza Hut.
Speaker 2:And the other little known fact is that anytime we get Pizza Hut we do a large stuffed crust pizza.
Speaker 3:That's true.
Speaker 2:And.
Speaker 3:I think we were good this time.
Speaker 2:This dish is stuffed crust, but it's new. It's like stuffed like cheese bites, like the crust is like bites of cheese balls. I don't know If you've seen the commercials. You know exactly what I'm talking about.
Speaker 3:If you haven't seen it, you're going to be like what the heck, we might be the only ones getting the commercials, though they might be targeting their audience correctly. Yeah, maybe, so we saw it at the gym the other day. We were like you got me joking yeah.
Speaker 2:So we're just going to go in for it, we're going to eat it, we're going to try it and we're going to make comments on it. Now, corinne did get some caramelized onions on half of it and then the other half is just plain cheese. So we're just going to eat the plain cheese pizza and we're going to give you comments, and we're also going to're also going to tell you if the stuffed crust is the deal or not.
Speaker 3:Spoiler I think we're going to like it. You're going to like it you think so, All right.
Speaker 2:Well, let's grab a slice and take a bite.
Speaker 3:Tastes like home, tastes like a nice summer night.
Speaker 2:I mean it's good. It's good, it tastes like Pizza.
Speaker 3:Hut pizza. If you don's good, it's good. You just see, it's like pizza, hut pizza. If you don't like it, you don't like it. If you like it, you like it I think there's some nostalgia or something like.
Speaker 2:It's just like both of us grew up and going to target with our moms and getting like the pizza hut probably happened to me like two times total, but both times that it happened were great times yeah, I did all the time and uh, there's just, I think it's a little bit of the childhood Now. In terms of quality, it is not a quality pizza.
Speaker 3:It's so good.
Speaker 2:But it's got a lot of butter, the sauce is pretty sweet and the cheese is good, like I mean.
Speaker 3:We understand the hate okay.
Speaker 2:The crust has got a ton of flop. There's like no undercarriage no. The bread isn't like anything good. You can probably like it was probably frozen, but it tastes like but it's good A nice buttery cheesy meal.
Speaker 3:Yeah, okay, should we try the crust?
Speaker 2:Yeah, let's try. So the crust is again like balls of cheese, stuffed crust cheese, but it's like a bite form.
Speaker 3:Instead of the whole crust, I will say I think I like the regular stuffed crust more.
Speaker 2:I was going to say the exact same thing. The ratio is off now.
Speaker 3:Yeah, too much bread.
Speaker 2:Not enough cheese, too much bread. It's not as buttery.
Speaker 3:No.
Speaker 2:It's more dry. Yeah, it's more dry, and then it's got the herb seasoning on top.
Speaker 3:Which is still good, but yeah, just a little more dry.
Speaker 2:It's not as good as the original stuffed crust, if I can agree.
Speaker 3:Darn wish we had one to compare it to.
Speaker 1:For strictly research purposes.
Speaker 2:But I mean it's still good.
Speaker 3:I don't think we should rank this in comparison to richmond pizzas, because this is like cheating I mean I wouldn't give this higher than eight. You've heard our thoughts. I think my rating is impartial because I just it's like my kryptonite and you shouldn't take my my judgment seriously okay, well, just for for fun, what's your rating? This is really good. I can't. I never remember the numbers I give on the other ones, and then I feel like I'm just all over the place.
Speaker 2:She wants to give it a 10.
Speaker 3:No, not with the crust. If it was regular stuffed crust I would give it a freaking 10 out of 10. It's so good the crust is bringing it down. It is a little bit cold. We waited a minute.
Speaker 2:Maybe like an 8.7.
Speaker 3:But in comparison, there are definitely pizzas we've had that were way better than this guy's, so if that ranking is off the charts, then humble myself.
Speaker 2:That is one of the highest rankings you've given us.
Speaker 3:Okay, then bring me back down to earth, because there are plenty of pizzas that were phenomenal, that were not like this.
Speaker 2:If I'm being a critic and I am just purely the pizza. No nostalgia, no like feelings towards. It's very mid and we'll give it in the sixes it's very maybe like a six, but it's because it brings me so much joy.
Speaker 3:Yeah, all right, I want to eat it now.
Speaker 2:So we're still gonna eat it see ya all right, adios bye-.
Speaker 1:You're listening to the From Pies to Prosperity podcast, navigating life's financial obstacles and learning the truths of personal finance, one slice at a time. Now back to the show with your host Cooper.
Speaker 2:Casillas we're back a little loopy because we just had stuff course pizza happy tummy corinne looked at me and she said I wish we had another stuffed crust pizza.
Speaker 3:I know it's so bad.
Speaker 2:It was pretty good it was so good. Again we were talking, and I do think it's been a year since we've had pizza like that Kind of hard to believe, but I guess so. And it definitely curbed the craving a little bit. Maybe we're good for another year.
Speaker 3:I'm happy that worked for you. For me the crust was. It didn't. It wasn't as happy for me well, you'll just have to have cheesecake on your birthday next week oh my gosh, you guys did you know that the cheesecake factory, if you sign up for their little rewards thingy, you can get a free cheesecake on your birthday, which I guess for some people means absolutely nothing, but for me it's like the best part of my year little known fact about corinne, just so you guys know.
Speaker 2:If you want to get her happy and excited, just bring up good food she'll just specifically, specifically cheesecake factory cheesecakes, cheesecake.
Speaker 3:Oh my gosh, they know what they're doing cheesecake.
Speaker 2:Oh my gosh, they know what they're doing. Sometimes I deflect and they say, oh cheese, look at that cheesecake.
Speaker 3:Yeah, squirrels, I'll start thinking about what flavor I want now and you got to start thinking about okay, well, what?
Speaker 2:how do I know if? My withholding is off or on, or what well, obviously the biggest indicator is each year as you file your taxes. If you owe a lot, you're like, oh, all, right, I gotta withhold more. And if you don't owe a lot and you get a lot back, then, oh, maybe I need to withhold less. Right, that's pretty simple, straightforward. But a lot of people still don't really understand this. Maybe they don't file their taxes themselves. They have a CPA do it.
Speaker 3:You're seeing your hands a lot today.
Speaker 2:My hands are going all over the place. Yes, I'm trying to get your attention. Is it working?
Speaker 3:I'm not a freaking cat.
Speaker 2:Oh no, oh no. That was so bad. I don't want to say what just happened, but that was so bad. You should tell them. No. Tell them what just happened. No, oh, oh. Why is she wiping the mic? I'll never be able to unsee that. I'll never be able to unsee that. If this episode gets 100 likes, I will tell everyone next episode what she did. Stop. That was bad dude. Bad dude. She's crying. She's crying Well, while she composes herself. The IRS. What I was saying is the IRS has a withholding calculator that you can use and go on. It's actually pretty comprehensive and you have to answer a lot of questions, but it will kind of guide you through any adjustments that you might need to make. And then you go and you update your W-4, or sometimes you can even just go directly to HR and say hey, can you please update my withholding to withhold an additional $150 per paycheck the federal taxes and sometimes they can just do it for you.
Speaker 2:That's pretty nice, right yeah so I'll just keep on talking. One other thing when it comes to withholding, is that your bonuses? Unfortunately, corinne, you do get some bonuses again with the hands he just pointed very aggressively and you got a bonus this year everyone did, but yeah, I did do you remember how your bonus was taxed? No, no, you think I looked at that no okay, do you remember how much it was after taxes and before taxes?
Speaker 3:no well, that's not very helpful, sorry my co-workers were just like it'll be this much in reality and I was like, oh cool okay.
Speaker 2:So let's say you get a thousand dollar bonus or ten thousand dollar bonus. Everyone's like, yeah, ten thousand dollar bonus, that's awesome then uncle sam comes by.
Speaker 3:Uncle, no one likes, uncle.
Speaker 2:And that bonus is now $6,000. And you're like what the heck You're like who invited this guy to the Christmas party.
Speaker 3:Every year he takes our money. It's crazy, it's crazy.
Speaker 2:But it's actually. You're not actually paying 40% in taxes, but the IRS automatically withholds at least 22% for federal taxes. Plus then you got FICA taxes, fica you remember FICA, fica, fica, yeah. And you got state taxes. So you know it adds up to like 40%, but it's not actually taxed any differently than your normal wages, it's just withheld differently.
Speaker 2:So again, the IRS requires that bonuses are withheld differently than your ordinary income or wages for why because they don't know if that's going to kick you into a higher tax bracket or not they don't want you to be in a higher tax bracket they don't want you to under withhold because again they want the interest-free loan to them.
Speaker 3:They want more money.
Speaker 2:Correct. So if they withheld at the same rate for your bonus and then kicked you in a higher tax bracket, then you're going to owe more in taxes come April, and they want it to be the opposite.
Speaker 3:They want to give you a refund in April.
Speaker 2:I see, okay.
Speaker 3:Yeah, refunded in equal, I see okay yeah.
Speaker 2:So so oftentimes people think, oh, my bonuses are taxed higher than my income and that is not true. It's not true so it's a lie just want to let people know about that so you're saying you want us to owe money? I mean in a perfect world, yeah, you owe like a thousand or two thousand dollars and don't have to pay any penalties. The tricky part is you have to put in a certain amount to avoid any penalties or interest on that so.
Speaker 2:I mean, in a perfect world, you owe a little bit and you got the interest-free loan. Hey, oh, hey, oh, hey, oh. And then also, you know, we're just talking about people who work, your normal nine to five. But people who work and operate their own business or are 1099 contractors, they do not have an HR department that withholds taxes for them. So what do you think they have to do, corinne?
Speaker 3:Pay it in full.
Speaker 2:That or make quarterly payments? Yeah, so they have to. Let's say they have a job and make $1,000. They have to know that. Okay, well, I have to save, let's say, 30% of that for payroll taxes and federal, state and state taxes, and it's not automatically being withheld. So a lot of times, self-employed individuals, contractors, will have a separate savings account just for taxes. Well, they will automatically transfer over that percentage to that account. Okay, and then you have to make quarterly payments. You can't just wait until the end of the year again, because the IRS wants that money. And so each quarter you have to make an estimated payment based off of what you think you owe, based off the income that you earned in that quarter as a business owner.
Speaker 2:Sounds stressful yeah it's a lot more hands-on than just your normal salaried employee.
Speaker 3:My eyes just keep watering every like two minutes.
Speaker 2:I'm confused on why you said don't yawn, it's going to make me sneeze.
Speaker 3:I don't know the science behind it, it just triggered me. That's not true. It triggered me.
Speaker 2:If I yawn, you might yawn.
Speaker 3:Actually, now that you brought it up, that was a joke that you didn't laugh at. You just glid right back, glid.
Speaker 2:Glid, she's tired. We were camping.
Speaker 3:I took a nap today, guys, I don't do that. Yeah she was slumped on the car ride. I didn't think I fell asleep, though, but then I looked at the GPS thing and I was like there's no way we're 10 minutes away. I was like there's no way we're ten minutes away. I was like that's impossible. We were just two hours away.
Speaker 2:Yeah.
Speaker 3:Anyways, I'm excited to sleep in our own home tonight. But back to the fun stuff.
Speaker 2:Back to the fun stuff. So let's just kind of recap what we talked about. Okay, one tax withholding. What is it?
Speaker 3:It's when Cooper grabs money out of your hands and says no, no, no.
Speaker 2:Not Cooper, I know, I know who.
Speaker 3:Again, it's my joke. Let me say my joke first, and then I'll give the serious answer. Okay, oh my gosh.
Speaker 3:Just jump into the punch every single time. This guy, okay, okay, oh my gosh, just jump into the punch every single time. This guy, okay, uncle sam, he's not the president shocker, he's the irs. Ah, don't let it scare you, it's gonna be okay, little uncle sam. He just takes a little peekaboo at your paycheck every month and then he takes some things away because he wants to get them interest free. Oh, sneaky, sneaky little guy. And then at the end of the year, when it's time to do your, and then at the end of the year when it's time to do your taxes everyone's favorite time of the year you're trying to make sure that you Bathtub. I was on a roll.
Speaker 2:Oh, you're gone.
Speaker 3:Well, now it's gone, it floated away.
Speaker 2:At the end of the year.
Speaker 3:Now, all I can think about is rubber ducks. Bathtub year now all I can think about is rubber ducks at the full fullback here. You, you. Uncle sam wants it to be over. Uncle sam wants you to have given them way too much money, because then they're like oh, sneaky, sneaky, they gave us money interest free, but you do not with that. You want to accidentally have given them a little too little so that they actually, oh nope that you owe them a teensy bit.
Speaker 2:Yes, correct, we got there, folks, we got there. Amazing. And what if you owe too much?
Speaker 3:Well, there's no need to panic. Okay, you just go to www. I'm just kidding. You can talk to your HR at your company and say hey, I want to update my W-4 so that it more accurately represents what I'm trying to do. And also, if you get a big life-changing event like marriage, a child, um uh, you decide to donate a billion dollars to animals. Yeah, so kind of you. You should update your w4 so that uncle sam doesn't get your money this.
Speaker 2:This is actually going amazing. I think you're retaining more than you ever have before. This is incredible. What about bonuses? Tell me about bonuses.
Speaker 3:It's different. It's different.
Speaker 2:Oh what.
Speaker 3:It's not the same. And again, the people that are unknowledgeable. They think, oh my god, they're taking way more of this than my normal paycheck. Why are they doing that? Well, they're not, okay, they're not, it's different. It's different, okay.
Speaker 2:Well, the withholding's different, but they're taxed the same.
Speaker 3:That's exactly what I was about to say. Awesome, well, I mean, that's exactly what I was about to say Awesome.
Speaker 2:Well, I mean, that's mostly what I have. That's a good summary, Corinne. I am very proud of you actually, I think I'm going to promote you to a co-host of the show.
Speaker 3:I don't want it.
Speaker 2:So I think now what we're going to have to do is get some headshots with you. Now that you're looking all sharp after doing 75 soft, oh my gosh. Get some headshots, co-brand me and you on the cover page, and it's going to be a party.
Speaker 3:Never agreed. I'll have my people talk to your people.
Speaker 2:Okay, well, we can come up with a contract how many stuffed crust pizzas you need? Come on, what's your number? Hey, what's your number how about?
Speaker 3:no, I need to think on this.
Speaker 2:I don't do well under pressure maybe next time we can talk about careers and salary negotiation and we can negotiate our terms on the podcast.
Speaker 3:That sounds like a horrible idea.
Speaker 2:I feel like I'm going to easily get taken advantage of no, I feel like you could be a good negotiator.
Speaker 3:No, I don't think so. With me, with anyone else terrible, but with me I think you feel comfortable, it's like me going to a car dealership and you being like don't let them, don't let them take advantage of you, and I'm like right, right, right. And the guy's like, all right, I can do 10 000, I go 9999, you got a deal why did you just yell?
Speaker 2:that's gonna be so loud in the old people's ears.
Speaker 3:Okay, just tone that down, Guys. I can't hear, my ears are clogged.
Speaker 2:Okay, well, I'll leave you with a stat, because you love numbers, you love stats.
Speaker 3:I do yeah, okay, okay. I don't remember loving numbers. Why did your?
Speaker 2:iPhone just move up so high Because.
Speaker 3:I've never been a numbers girl. That was the most random thing you've ever said to me.
Speaker 2:Well, the stat is, over 70% of people get a tax refund at the end of the year and that tax refund on average is over $3,000. So you calculate how much that is per taxpayer. Uncle Sam is doing pretty dang well. Let's turn that around.
Speaker 3:Stop inviting him to Christmas, stop, stop.
Speaker 2:Thank you for listening. We appreciate you. This is another episode of From Pies to Prosperity, with Corinne Gilbert and Cooper Casillas. Bye See now her name is first, she's the host and I'm the co-host. Just wait until next episode, because she's going to pick the episode podcast content.
Speaker 3:No, I'm not. No, I'm not Topic. No, I'm not.
Speaker 2:Amazing. Bye, all right, love you guys. Bye, bye.
Speaker 1:We really hope you enjoyed this episode of the From Pies to Prosperity podcast. Remember, hope you enjoyed this episode of the From Pies to Prosperity podcast. Remember to share with a friend, subscribe in your favorite podcast app and, if you're so inclined, leave us a review. As always, all resources mentioned can be found in the show notes below, which include where to learn more about Cooper and his team. If you'd like to set up a meeting or send a listener question, please email Cooper directly via cooper at rayolsonnet. Thanks for listening and taking one step closer to climbing that mountain to prosperity. This information provided is strictly for educational purposes only and does not constitute financial tax, investment or legal advice. Securities offered through Kestra Investment Services LLC. Kestra IS member FINRA. Sipc. Investment Advisory Services offered through Kestra Advisory Services LLC. Kestra IS member FINRA slash SIPC. Investment Advisory Services offered through Kester Advisory Services LLC. Kester, as an affiliate of Kester IS LC. Ray Olson LLC is not affiliated with Kester IS.