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beachgirl
LIF Adult
Member since 7/05 7967 total posts
Name:
sara
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Bonus Check - taxes question.
Looking for some assistance here...I have received a bonus...payroll company asked me how much taxes I wanted taking out..
1) Same as usual ie. same tax bracket as my normal paycheck is computed from
2) More taxes - ie set amount of NYS and federal taxes that I choose for them to take out
3) No taxes
While I would love to opt for number 3, I think number 1 is the way to go...my accountant is on vacation so cannot ask her so that is why I am asking you guys.
Thanks so much
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Posted 1/3/13 10:39 AM  |
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Peaches77
LIF Adult
Member since 1/10 993 total posts
Name:
Me
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Bonus Check - taxes question.
I would definitely not choose option 3.
As for the bonus, if it sends you into the next bracket (after adding it into your normal income) then I would go with option 2.
Otherwise, option 1 is always the way to go.
FM if you have more questions. I'm a CPA.
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| Posted 1/3/13 10:49 AM |
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beachgirl
LIF Adult
Member since 7/05 7967 total posts
Name:
sara
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Re: Bonus Check - taxes question.
Thank you SO much...I am going to check to see if this puts me in another tax bracket - doubt it will but checking and if not then going with my regular payroll taxes. Thanks again
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| Posted 1/3/13 1:23 PM |
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summertime
LIF Adolescent
Member since 9/10 852 total posts
Name:
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Re: Bonus Check - taxes question.
Definitely not #3. Bonuses are considered supplemental income, so the federal tax is higher at 25%, so it will not be taxed as usual.
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| Posted 1/3/13 2:24 PM |
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Xelindrya
Mommy's little YouTube Star!
Member since 8/05 14470 total posts
Name:
Veronica
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Re: Bonus Check - taxes question.
I always choose #2.
Its a bonus so its more than I had and its an 'extra' so I figure Uncle Sam can take what he wants, I get something out of it no matter what.
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| Posted 1/3/13 2:41 PM |
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Re: Bonus Check - taxes question.
At work right now, they automatically do #1 for me.
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| Posted 1/3/13 2:49 PM |
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Gdesq
LIF Adult
Member since 5/05 1314 total posts
Name:
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Re: Bonus Check - taxes question.
Posted by MrsC2009
I would definitely not choose option 3.
As for the bonus, if it sends you into the next bracket (after adding it into your normal income) then I would go with option 2.
Otherwise, option 1 is always the way to go.
FM if you have more questions. I'm a CPA.
This is what my accountant said to me
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| Posted 1/3/13 3:18 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Bonus Check - taxes question.
Posted by summertime
Definitely not #3. Bonuses are considered supplemental income, so the federal tax is higher at 25%, so it will not be taxed as usual.
Supplemental income only based on what they decide to take out in tax. Not that you really owe in tax for that bonus money.
Employers tend to deduct more taxes from bonus money becase they figure this money would send you into another tax bracket.
But when it comes to end of year, bonus money is taxed no different than regular earnings.
Link
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| Posted 1/3/13 6:20 PM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Bonus Check - taxes question.
I have no choice - my extra pay is added onto my regular salary, so it looks like I am making double and they take out an enormous amount of taxes.
I don't have a choice, so I just hope that it all evens out in April.
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| Posted 1/3/13 8:37 PM |
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CSK
LIF Adolescent
Member since 9/11 892 total posts
Name:
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Re: Bonus Check - taxes question.
Posted by ave1024
Posted by summertime
Definitely not #3. Bonuses are considered supplemental income, so the federal tax is higher at 25%, so it will not be taxed as usual.
Supplemental income only based on what they decide to take out in tax. Not that you really owe in tax for that bonus money.
Employers tend to deduct more taxes from bonus money becase they figure this money would send you into another tax bracket.
But when it comes to end of year, bonus money is taxed no different than regular earnings.
Link
This is correct.
Not to get too technical ehre, but your income is taxed at a graduated rates, the numbers if you are single are
the first 8700 you make at 10%
the amount from 8700-36000 15%
from 36000-86000 at 25% and amounts from 85-178K at 28%
so if you make 100K here, your average tax rate is about 17% on your money and technically you should be withholding at 17%
your bonus is incremental income (above what you currently make) and will be added onto it and thus would be taxed at your incremental tax rate. so if you make 100K and recieved a bonus, it would be taxed at a 28% rate
http://www.moneychimp.com/features/tax_brackets.htm
so basically if you take out what your normally do, which might be 17%, you'll be short at tax time
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| Posted 1/4/13 12:20 PM |
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jerrysgirl
I love my hot dog!!
Member since 6/06 5357 total posts
Name:
E & J
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Re: Bonus Check - taxes question.
my old company used to do option 3. they would give me a check with no taxes. then the following paycheck would have the taxes from the bonus deducted from it. it was to make the bonus check look nice.
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| Posted 1/4/13 12:30 PM |
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