Amazon’s first 2 years have high signing bonus cash component For federal, is this taxed at regular tax rate ? Or is there a separate fix bucket ?
The Percentage Method: The IRS specifies a flat “supplemental rate” of 25%, meaning that any supplemental wages (including bonuses) should be taxed in that amount. If you receive a $5,000 bonus, under this rule, $1,250 (25% of $5,000) goes straight to the IRS.
From turbotax blog
Amazon withheld ~30% of mine in Seattle.
Amazon or IRS?
The amount they direct deposited had 30% missing.
Amazon may have deducted 30% but eventually you will pay effective tax rate based on your overall earning hence you may get some refund if your overall tax date is lower than 30%. I don’t think that there is a different rate for signing bonus.
It'll get withheld at the supplemental rate, just like any other bonus, but you get taxed on the money just like you would if you received it as usual cash salary.
No it will be withheld at the supplemental rate, it is taxed at your regular marginal rate
Got it , thanks for the responses. So to offset the high withholding , I can just increase my W4 allowances. Don’t want to IRS to keep my money for 12 months before getting it back in refunds
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I didn't get a bonus for singing :(
Corrected , thanks 😂