Sunday, April 06, 2014
The Taxed Teacher
My tax woes started when I was officially hired as part-time teacher in the school where I am teaching. Since I am officially employed by the College (although at a part-time basis), I have to consolidate the income that I earn there with my regular income. When I did this early this year, I was shocked when I learned that I still have a tax deficit which I have to settle before the April 15 deadline.
It took some time for me to understand it and I had to confer with my Accountant friends to figure it out. Apparently, my regular job taxes me the max at 32%. Since I am only earning a pittance as a teacher, I am taxed only with the basic rate. So when I consolidated the two together, the tax rate that was applied with my regular job was also applied to my teaching rate. Ergo, the tax deficit.
Also, according to my Accountant friends, if I do not want to have a repeat of the tax deficit, I have to inform the school that the salary that I draw from teaching should also be taxed at 32% moving forward. That was devastating news as if that happens, my net pay won't even be enough to cover for my weekly transportation expenses going to school. Teaching is something that I am beginning to love and since I love this, it's beginning to love me back (I deduce this based on the high grades that I got on my teacher's evaluation).
I sent a formal letter to our dean to change my status from part-time to consultant. If that happens, I will no longer be included in the school's alpha list. Moreover, SSS will no longer be deducted (that is also my other concern. The school is deducting SSS from my wages when my regular job is already deducting the max amount. SSS owes me a refund which I can only claim if I write a letter etc etc. Not worth the hassle). And I believe only VAT will be deducted from my fees. Hopefully, my request will be granted so I can continue teaching. Otherwise, I will be forced to resign to look for a teaching position nearer my place of residence.