by: Jeff Berwick
July 24, 2012
[Editor’s Note: Due to an outpouring of requests we will bring Dear Slavey to you on a weekly basis – as opposed to the initial monthly basis we planned. And now, here is Dear Slavey!]
I work on project based consulting contracts. The companies I work with prefer to put me on their books as a temporary employee and taxes are deducted from my check. But because they pay me in a lump sum their payroll system thinks I make that much in an 8 hour day, and an enormous amount of tax is taken out. I need that money but I have to wait for a year to get it back from the IRS – my refund is often $10,000 or more – and the actual amount of tax they end up keeping is insane. The companies I work with have refused to alter their payroll system to reduce the tax being deducted. What can I do to keep the money I earn in my own damn pocket before and after tax filing time?
Frank in Reno, NV
First of all, congrats on not buying into the 9-5 hourly slave wage job lifestyle like most of the lemmings in this country. The majority of those jobs don’t pay enough to live anymore, (many slavey wage earners in the US are on food stamps even though they have full-time employment) so you’re already one step ahead. Sounds like you do well, but the US Government is taking your money and using it to pay interest on their debts while you’re being forced to lend them YOUR money with no interest.