I'm definitely on the same side of the timber as the vertical line I'm cutting. You have to be on the same side of the line to get a good view of what you are cutting in my opinon. Looking over the timber at the opposite vertical face is too difficult to be accurate me thinks.
Definitely don't overcut a shoulder. The over cut lines won't be pretty. I saw down close and then give the block a whack with my mallet, and clean the corner with my chisel.