I just got some of my bonus paid out and nearly 50% was withheld for taxes. Is this how it works? Anything I can do? I’m aware I can get the tax refund next April, but I’d rather not lend the government my bonus money for a year.
Yup, this is how it normally works. Your bonus is taxes as income like a regular paycheck, but since it’s more, it’s projected into a higher tax bracket. Talk to a CPA about it and see if there’s anything you can do to mitigate against it
One can't, if there was an overpayment of taxes, one gets it back as a refund next year.
Vote conservative
They are the ones that increased my taxes.
HahahahahahahahahahahahahahahahahahahahahHahahahahahahahahahahahahahah The current tax laws are literally put by conservatives 😂
Bonuses are always taxed higher! Since it “supplemental income” can’t do anything about it till next year.
☹️
This isn’t true at all. Taxes on bonuses are often withheld at 22% but you owe taxes on bonuses the same as other income. For most Blinders, the marginal rate is going to be higher than 22% which means they will owe more on any bonus at tax time.
give HR an updated W4 form to reduce paycheck withholding for rest of the year
Should be easy because you can just adjust withholding for the rest of the year, knowing approximately how much your total income will be. I usually get my bonus on the last day so there is no way to predict how much it will be.
Simulate your overall income and thus your taxes for the year. Then adjust your withholdings for the remainder of the year. Sounds like you're in CA or OR with those tax withholdings
TC? It may not be enough money to worry about.
Use the W-4 estimator https://www.irs.gov/individuals/tax-withholding-estimator
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Is this your first time receiving bonus?
Kind of. I’ve had raises before. Got a bonus at previous company but it was added to my paycheck at end of year. I filed taxes a few weeks later so got it back quickly. New company pays annual bonus on a monthly schedule through a separate check.