How is a ‘W-2’ is like a ‘pot of gold’?

My pot of gold, through a convoluted path, is symbolically, a ‘W-2’. It is symbolic due to the categorizing of human beings. W-2 represents the “work” or “employed” category as designated by the Department of Labor, the standard for all. Why do I care what category I can claim, according to the DOL? Because it is a lie! You see, the converse, “unemployed” means not working. Are you seeing where I am going?

You need to join me for a trip to the end of the rainbow, or wherever we end up to get the full notion. The journey is part fairy tale and part ‘public policy‘ and we both know that those are miles, light years, apart; part wanting and part wishing; with a good measure of ethics and fairness.

Here we go; Some backstory: I have been sent W-2’s before. I had no shortage of job, jobs, jobs, in my teens and twenties, even thirties. They stopped dribbling in about the time I gave birth to my first daughter. She is 30 years old, so that would be the number of years I have been ‘unemployed’, also considered a “stay at home mother’. I’m not quite a workaholic, but I’m happy enough working, creatively. However, I do envy for those who take meals sitting down at a table, weekends sleeping late and take vacations that include restaurants.

Now google, “compensation for a stay-at-home mom“. (This will tie together, stay with me.) Are you ready? Last year the figure was a whopping $178,543 the cost to replace the services of a stay-at-home mom (or dad) according to Salary.com. Child care, excluding infants who cost more, is about $15,355 per child for full time care. That would be $46,003 buckeroos per year for three children. Start with that as a base and see the add-ons that bring the total shebang to $178,543. You have to also take into account that most salaried persons have a job based on a 40 hour week. Wouldn’t a mother love those hours! Life would feel like a vacation.

Typically, a stay-at-home-mom (SAHM) gets up before the children need to wake up or already awake. Let’s say 6:30 am on a good day. Scenarios vary widely according to a child’s age, or co-parent availability. Also take into account being pregnant with one or two toddlers in tow–that would be me. SAHM might catch a break during child’s nap time or guarantees are off.

In my case, I used every creative muscle to devise a strategy, for which, all –each and every–child (from 1-3) would be either snoozing or very well trained for the nap time protocols.

I learned the fundamental of meditation through necessity. I white washed my brain’s transmission from hyper-bunny, rapidly decelerating to zzzz. The joy of silence, vacant of thoughts, demands or whining, was my version of–you got it–a pot of gold; enabling me to be resuscitated for the second shift, easily another 7-8 hour shift.

Thirteen hour days were common. The co-parent traveled 2-3 weeks per month. Don’t feel sorry for his schedule of first class flights, hotels and of course, three–square sit down meals per day (not per week).

Back to the W-2 question. I have paid just shy of 2 million dollars in taxes since my 2005 divorce. That is a lot of tax money. Included in that tidy bundle, were many years where interest and fees accumulated–thereby representing an outrageous burden to contemplate payment, yet alone make one! Those were not my finest financially savvy days. Though to my credit, I did employ the accountant that was credible enough for my divorce attorney. A counselor, he was not.

Here is where I start to get heated…..there is no tax obligation on “child support” payments–either from or to- however the deal I struct– my alimony and child support were mixed together, called unallocated alimony. Therefore, I have had the privilege of paying taxes on the combined alimony. Reciprocally, he was able to deduct the maximum of the options.

Wondering if this seemingly unfair system, was equally unfair in the EU and elsewhere, I came up with this. In the UK, spousal maintenance is not taxable income because it has already been taxed. In other words, the 2 million I paid to the IRS was taxed twice. I could get real grumpy.

Ok, about W-2’s, we are getting closer. If I am taxed on unallocated alimony, doesn’t that technically count as “employed”, as opposed to “unemployed”?

No, it doesn’t count as ‘employed’ ‘. Get ready for this! Students, retirees, the disabled, homemakers, and the voluntarily idle are not counted in the labor force. The labor force as the percentage of the total population over the minimum working age is called labor force participation rate. Anyone who has run a household with children knows that it is likely the hardest job one can do. How many of the ‘employed‘ admit that they can’t wait to get the the office, where the work is more sane?

“Voluntarily idle‘ that term is so offensive to be worthy of a meme. You can also put volunteerism in the same camp as voluntarily idle, they don’t get paid ‘money‘! But how is it that I pay taxes without the advantages of employment benefits, benefits of a real job? The money was already taxed once as my Ex’s income.

Am I the only one to find this system unfair? Two million dollars in taxes paid to be counted as unemployed— during the so called 17 years of unemployment! Perhaps I could have qualified for unemployment income, which would also be taxable. The employed have the advantage of tax deductions!!! And aren’t the employed generally happier than the unemployed? So additionally, they get ‘benefits’ of employment too. Still looking for that pot of gold!

W-2 employees are afforded protections under the law, such as minimum wage, overtime, and family and medical leave. They’re also entitled to participate in benefits like health and dental insurance, which are often better than what they can afford on their own. Added also are life and disability insurance, retirement income, loan benefits, paid-time-off benefits, and educational assistance programs.

Just like wages, salary, commissions, and bonuses you pay to your staff, the cost of employee benefits is tax-deductible. In addition, there can be employment tax savings. It really sounds like a program I could enjoy.

I am also penalized in my social security award; which is based on your lifetime earnings, indexed over 35 years. My alimony–for unemployment/work— is not factored into my social security award. I haven’t been getting a W-2, remember! The best I get is a spousal award, based on my years of employment plus his, my ex. He gets four times more than I do. That hurts.

So check the box ‘employed‘. Right? Ok, so tell me, will I be in receipt of a W-2? And will the presence of my W-2 in the system– shared with the social security department– trigger benefits, including social security accrual ? After all, that alimony/money is earned, worked for and taxed.

Better yet, claim self-employed which is actually exactly what it is. I am subject to my own employment rules and regulations. The pay is court ordered, that sounds legitimate.Take business deductions–I need a new computer– fund a 401(k), take self-employment deductions.

Does anyone really think that child care being provided at home versus outsourced isn’t a form of work aka employment?

The pot of gold is yet beyond reach, as I can’t enact these conditions retro-actively. But maybe you can. Tell me how that gold tastes, or smells or appears. Meanwhile I’ll have to find real employment!

Thank for joining the trip and I hope you find your ‘pot of gold’.

–Debra Sherwood