Taxes

[sammi]

Where do I go to not have taxes deducted from next paycheck by this Friday? Our team members were advised to do this for next paycheck only to receive the full $200 bonus without it being taxed.

 

[masterofalltrades]

Where do I go to not have taxes deducted from next paycheck by this Friday? Our team members were advised to do this for next paycheck only to receive the full $200 bonus without it being taxed.

I Would not do that. It will just be deducted from your return or you will owe more. Also bonuses are taxed at a higher rate. Honestly that is terrible advice to be given.

 

[Fluttervale]

Those aren't your taxes. They are withholdings. Whatever extra is taken now will come back when you do your taxes next year.

They withhold at a greater rate because when bonuses are large, they can put you into a new tax bracket. YOU ABSOLUTELY WILL GET THE DIFFERENCE BACK IN YOUR REFUND.

 

[Kvothe]

Those aren't your taxes. They are withholdings. Whatever extra is taken now will come back when you do your taxes next year.

They withhold at a greater rate because when bonuses are large, they can put you into a new tax bracket. YOU ABSOLUTELY WILL GET THE DIFFERENCE BACK IN YOUR REFUND.

$200 is large? /s

 

[redeye58]

It'll buy some groceries & maybe gas up the car or pay for a bus pass.

 

[Fluttervale]

$200 is large? /s

No. But they don't know what your tax situation looks like. Keep in mind many, many jobs issue five and six figure bonuses and there are standard ccounting practices that take that into account.

 

[masterofalltrades]

Those aren't your taxes. They are withholdings. Whatever extra is taken now will come back when you do your taxes next year.

They withhold at a greater rate because when bonuses are large, they can put you into a new tax bracket. YOU ABSOLUTELY WILL GET THE DIFFERENCE BACK IN YOUR REFUND.

Thats not why. The irs considers Bonuses ro be considered supplemental income like lottery winnings or stock dividends etc.

 

[dannyy315]

So how much are we looking at being withheld? $80 or something like that? Even if it only comes out to like an extra $120, that can pay for a lot

 

[FlowTeamChick]

I googled it and it looks like bonuses are taxed at a flat rate of 22% (unless it's over a million and then it's 37% for anything over a million - don't think we need to worry about that!). So we should see an increase of $178.
Plus there was this info: "If you are in a tax bracket lower than 22%, having your employer treat your bonus amount as a separate payment would mean paying tax on it at a higher rate. In that scenario, you might be better off if your employer includes your bonus with your regular pay so that you pay less tax." (Sorry for all the bolded words; must be part of the search engine function.)

 

[gsa4lyfe]

I Would not do that. It will just be deducted from your return or you will owe more. Also bonuses are taxed at a higher rate. Honestly that is terrible advice to be given.

Ehhh most ETLs do it every year, you just get a smaller return at the end of the year. I just change my status to married with 3 kids for that check then change it back to single after.

 

[Dcnewb4now]

I googled it and it looks like bonuses are taxed at a flat rate of 22% (unless it's over a million and then it's 37% for anything over a million - don't think we need to worry about that!). So we should see an increase of $178.
Plus there was this info: "If you are in a tax bracket lower than 22%, having your employer treat your bonus amount as a separate payment would mean paying tax on it at a higher rate. In that scenario, you might be better off if your employer includes your bonus with your regular pay so that you pay less tax." (Sorry for all the bolded words; must be part of the search engine function.)

Your math is a little off, it’s $156.

 

[FlowTeamChick]

Your math is a little off, it’s $156.

There was a reason I hated story problems in math! You are correct, thanks for catching my error.

 

[jackandcat]

Remember you'll also still get docked for 7.65% FICA payroll tax. Here's how it pencils out if there's no State or local income tax.
Gross bonus $200.00
7.65% FICA tax -15.30
22% FT witheld -44.00
NET BONUS $140.70

If you have State or City/local income tax. Most of you live in the 43 states with a state income tax, and some live in places with a City or County income tax. Assuming the state/local withholding is based on the gross bonus payment, hypothetical 5% tax rate:
Gross bonus $200.00
7.65% FICA -15.30
22% FT withholding -44.00
5% state/local WH -10.00
NET BONUS $130.70

 

[Logo]

My old company paid the taxes on bonuses or 'winnings'.......

 

[ManMythMachine]

Basically change your w4 so nothing is withheld or add a ton of exemptions. You'll get all or most of the 200 bucks. Then, at some point later in life, you'll owe like 50 bucks on it. When you send your check to the IRS for tax remittance just make it out for a dollar. Those nice folks over at the IRS will get a real kick out of it. Seriously. The IRS likes jokes. They are a light group in Panem. They'll send you some humorous correspondence about interest accruing on your owed amount if you don't pay the total now and they'll use big funny words like garnish. I had my steak garnished once. No big deal. I ignored that garnish too. At some point in the future after you return your w4 to allow withholding again, it will all work itself out and you can take solace in the safe knowledge that you got 200 bucks over on the IRS that one time and it only ended up costing you 400 bucks in interest.

The IRS is a laugh RIOT they are. Call them sometime and they'll tell you so right to your face.