I was overpaid this week, and TAXED for it. How to reclaim taxes?

Question

I got an extra bonus on my check (by mistake) that I know will be taken back. I was taxed on that extra money.What can I do to get the extra taxes back? (fyi: it was a signing bonus to transfer jobs, but I didn't transfer, so the $ has to be paid back).I was taxed an extra $200!

Answer 1

The smaller next paycheck will show a smaller tax withholding than normal -- it will essentially be a wash, unless the extra pushed you into a higher marginal tax bracket for that pay period (probably not much), in which it will be a partial wash.

If it is only a partial wash, it will all be adjusted when you file and pay your taxes (or receive a refund), since the $200 bonus minus the $200 reverse adjustment will result in no extra income.

Regarding the higher bracket -- people believe that you pay more on all your income when you move into a higher bracket.  That is not true -- you only pay the higher rate on the marginal income (income that is above the last bracket).

I wouldn't sweat it too much.

Answer 2

The more u make the more tax you pay I was making 1000.00 a week and they took 350.00 out of my check.

Answer 3

Make them handle it, its their fault not yours.

Answer 4

Theoretically, your companies payroll department should be making adjustments to your pay history for the tax on the recalled bonus check. Basically, you should only be being asked to reimburse the company for your "NET" pay; that's pay after taxes. You should be able to verify that your earnings reflect the adjustments as many companies include your total earnings and withholding on the pay stub.

If by chance your company does not adjust your pay history, then the additional tax payment should be reflected in your W-2 statement which will affect your 2008 tax liability in a positive manner. Watch your pay stubs for the adjustments.

Answer 5

Your personnel office needs to handle this.     They shouldve taken the money back off a future check, and the taxes wouldve adjusted automatically.    Tell them, to do it right.