How can they take this much taxes from my bonus!!!!?

Question

Ok, so where I work every single quarter we get a bonus, it depends upon how well the company does etc etc, anyways this is the first time they actually gave us our bonus on a separate check they always used to add it with our normal paycheck, It was "supposed" to be $580.00 and when I opened it it was only $390.00!!!! Thats almost $200 out of a bonus! Do I get to file this on my taxes next year? Was that right? I feel like that was WAY to much taxes to take from one bonus check.

Answer 1

Yes, you'll file it on your return next year - it will be included on your W-2.  There are special rules for withholding for bonus checks, 25% for federal income tax plus the 7.65% for social security and medicare, plus any state and local taxes, but at the end of the year it's treated like any other income.  If too much was withheld, the extra will be refunded.

Answer 2

Be glad they did, as you won't owe on it when you file. . . .

Is the bonus W-2 wages or 1099 income?  Probably treated as wages since there was withholding

Answer 3

Look at it this way, it's a forced savings plan. any over deduction will come back to you when you file your taxes.

It may not be that far off though. If you add the different taxes together you're usually talking 25%-40% for regular income, depending on your tax bracket. Yep, it's a lot of money.

I never realized when I worked for someone else and they deducted a contribution every paycheck. when I became self employed I was floored to realize how much I'd been paying in taxes every year. Try to be thankful they took something to set aside toward your tax debt, you could have wound up with a tax bill next year.

Answer 4

When you file your taxes, your refund is the difference between the total that was withheld and the tax on the total that you made during the year.  Every additional $ withheld (on the same income) is one additional $ you get later or one less $ you pay later.  For example, you will get $10 more, or pay $10 less, on April 15 than if the check had been $400.

Answer 5

Adding to the other answers... whoever took out the withholding is basing it on as if you consistently make that amount on every check. Since this is a bonus and not the regular gross amount, have your employer withhold less the next time to make up the difference. It's often hard to get it exactly right.You good do a sample return anytime during the year to see what your estimated annual earnings would be and the correct tax. You can raise or lower your exemption allowances to adjust for this if your employer will allow. In practice afew hundred here or there in withholding may concern you , but not most employers.

For more free information, see my site at http://www.taxproblem.org

Answer 6

Congratulations on your bonus -- and on your soon-to-arrive baby boy!

When paid in a separate check, bonuses are subject to federal withholding at a flat 25% rate -- plus 7.65% for Social Security (and perhaps more for state income tax, depending on where you work).  That comes to $189 on a $580 bonus -- just what happened to you.  Next April, when you file your income taxes, you will be eligible to get back some of the federal income tax withheld, if it turns out that it was too much based on your total income (including salary and bonuses combined).