Just found out I have a $36,000 tax bill for federal and California. This is with a $46,000 loss from a business I own as well. I double checked my withholding elections and everything was correct. Basically no adjustments to withholding which is what I had set up. I’m going to work out a payment plan with the IRS because I was laid off in November and we need this money to float us into our next jobs so we don’t have to dip into Fidelity. Has anyone else experienced this from their company? I used a take home pay calculator and saw that in the second half of last year I was being overpaid by $2,500 per paycheck. This is an expensive lesson learned. Happy tax season!
Yeah usually because of vesting, you needed to make sure they withholded enough
It was only my first vest so not a huge amount and my effective tax rate on those shares was 35%. I thought that might have been the issue but it doesn’t seem like it.
I have seen this from various Amazon employees here.
You have an option to have more taxes withheld on every paycheck. You may want to correct your RSU tax withholding percentage.
How could you not notice that big of a jump in your paycheck ?
It’s been like that since I joined. I joined in July 2022 and got a tax refund because I was only at that salary for half a year and my previous salary was non-FAANG. So there was no change to notice.
Double check your W2 vs last 3 months of paystubs for 2023
Unfortunately it’s correct. I did exactly that. When I compared federal tax withholding in a take home pay calculator, Amazon was withholding way less. Everything checks out they messed up from day 1 and I just didn’t do the math to figure it out because I’ve never experienced this before.
They wouldn't know about your business income. that would throw your tax liability off. For the business, have you taken depreciation on that income for stuff like it equipment, internet, home office, etc? From what I recall some rule changed this year which forces startups to split losses over 10 years. Perhaps your loss is not fully applied on income from last year.
Make your side fidelity is not screwing up with cost basis reporting.
This is why when I get my last pay stub for the year I use an online calculator to estimate my total tax bill and check against what was withheld. Mentally prepares me for what I will have to pay.
Sign-on bonus is held at 22% federal. That's probably why you ended up with a huge tax bill.
Is it really??? So is this the same thing for every Amazonian in their first two years?
Yes typically supplemental income including bonuses and RSU’s are withheld at a standard rate of 22% for everyone (37% for people among over $1 million). https://turbotax.intuit.com/tax-tips/jobs-and-career/what-is-the-federal-supplemental-tax-rate/L3GHwR4eM
Amazon withheld only what you told them to withhold. You should have known from gross monthly pay that you will get a hefty tax bill and you should have saved for that.
If you read my post to the end you would see where I said it was an expensive lesson learned. However, I have never worked a job where I have to calculate additional withholding because my employer isn’t withholding enough.
Employer can withhold a fixed rate based on your selections and by law cannot withhold more or less.
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I am the opposite. Getting 20k back in taxes for being over charged
You gave the fed 20k for a year, interest free
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