Can somebody with a better understanding than me explain how this works? I’m always underwhelmed when paying taxes, but this one came as a shock. Can I expect any of this back in my tax return next year? This Paycheck: Gross Pay: $54,000 Total Taxes: $32,000 And to break things down a bit more: Sign-on Bonus: $30,000 Relocation Bonus: $17,400 Fed & State Withholding taxes: $26,000 Social Security + Medicare + Disability: $6000 Thank you!
Lmao trumpy trump building his next golf course with your paycheck
Or a wall through someone else's golf course.
Lmao you know the Tax Cuts and Jobs Act of 2017 is putting at least a couple thousand back into all of your salaries?
You’ll get some back through tax refund. Also use 3903 to deduct relocation cost from your income.
Very helpful, thanks for this tip
It's weird that it was all lumped into one paycheck. I would have expected two paychecks; one for your bonuses (subject to supplemental withholding) and one for your regular paycheck.
Start your own business and claim losses
Doesn’t work that way, can only claim losses from business profits not your regular w2
Bonuses are always taxed at a higher rate so the quick math seems to make sense (combined to be between 45-50% Income tax - not sure of your state). Depending on your total income for the calendar year, you might get some of it back when you file taxes.
*withheld* It's an important difference.
Usually relocation should be grossed up, so you don't have to pay taxes. That depends on the company I guess. Also Medicare had a ceiling %. Once you hit that, you won't be paying more
They put it as Relocation Bonus vs Relocation reimbursement which are taxed completely differently.
*withheld* It's an important difference.
Lol we’re witnessing the minting of a republican
Fact. It’s hard to be a socialist or a democrat once you make $250k+
Stupid analysis
Instead of a 60k sign on OP should ask for 60k more in base
Alright heres how it works. Tax brackets only apply at the end of the year when you true up the difference between how much you were withheld vs how much you actually owe. When you get a withholding on a paycheck, it’s done with a table. You look up your pay period table and then look up the row for “if amount is between x and y, take Z amount away”. This table has no context around other paychecks past or future, it’s just a withholding for that one check. When the story of bonuses come in, sometimes they set the federal rate at 25%, sometimes they do it by the aggregate method which is also based on the same table with some additional math. If it’s aggregate then it just assumes you make like a shitton a year because the amount on that one check is so high. But at the end of the day, withholdings are just temporary. When you file your taxes that’s when they will true up to the correct amount and you’ll get back what was overwithheld.
Great breakdown, thanks for this
Kudos for the accurate and clear explanation. So many people don't get this
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Lol welcome to life. Maybe you can get relocation back.
Does this happen to everyone’s bonuses or are you just saying that? I thought taxes would reflect the bracket I’m in.
Talk to an accountant. I’m not in America but they probably didn’t factor in prior contributions/deductions from your prior job