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Posted on 3/24/15 at 5:35 pm to igoringa
He will get some of it back, but the effective rate he was taxed on all year was too low because the bonus was not anticipated
So the 41% will have to make up for all the under withholding all year
He will still get a good portion back though
So the 41% will have to make up for all the under withholding all year
He will still get a good portion back though
Posted on 3/24/15 at 5:45 pm to igoringa
quote:I'm all ears. How does that work?
You will get a lot of that back - its effective rate at the end of the day wont be close to the 41% they took out
I can tell you point blank, any above-and-beyond earned income on my ledger gets hit above 41% by the feds, and well above 50%, State and Fed included.
Or are you trying to extrapolate a bonus to the individual's average tax rate?
This post was edited on 3/24/15 at 5:46 pm
Posted on 3/24/15 at 5:51 pm to NC_Tigah
quote:
How does that work?
at the end of the year all things that determine your ultimate tax liability are factored in, deductibles, exemptions, etc., it's all part of a composite
Posted on 3/24/15 at 6:25 pm to TIGRLEE
Now you need to increase your exemptions to make it level out over the year, instead of next filing season.
Posted on 3/24/15 at 6:32 pm to Dodd
quote:
Now you need to increase your exemptions to make it level out over the year, instead of next filing season.
that's not how this works, that's not how any of this works
Posted on 3/24/15 at 6:41 pm to 777Tiger
Boo. Down vote you. Up vote lee
Posted on 3/24/15 at 6:45 pm to Dodd
quote:
Boo. Down vote you. Up vote lee
can't believe this is the "money talk" board, just chased a thread over here because it was moved, all kinds of mis-info over here, I'll stay away Posted on 3/24/15 at 6:50 pm to 777Tiger
I can't imagine what people who actually know what the hell they are doing think when reading this board.
I suck at managing money FTR. Don't listen to me
I suck at managing money FTR. Don't listen to me
Posted on 3/25/15 at 5:45 am to 777Tiger
You're wrong on this. We clearly understand where you are going with your statement and just disagree with you (because your statement is not correct).
Posted on 3/25/15 at 9:22 am to NC_Tigah
quote:
I can tell you point blank, any above-and-beyond earned income on my ledger gets hit above 41% by the feds, and well above 50%, State and Fed included.
Interest NC, help me out. Are you self employed and paying both sides of payroll?
Assuming the average married with kids family (I am giving Tigerlee that benefit lol), he wouldn't even hit the incremental 39.6% bracket until $465K of taxable income, nevermind an effective rate. Note when he is 'paying' the 35%, his payroll taxes are only medicare and not SS as he passed the cap.
What makes up your federal income/payroll tax burden that pushes it over 40% effective (just curious)
Posted on 3/26/15 at 12:47 pm to southernelite
quote:
They don't " get it" either. I had to explain this to my sister, who works in a hospital, because she was trying to limit her overtime to save on taxes. She thought if she went to the next tax bracket, she was gonna get everything taxed at the rate.
Posted on 3/26/15 at 12:52 pm to TIGRLEE
That have to tax bonuses at the highest marginal of any W-2 employee of the business.
Just be happy your taxes are well paid up, citizen.
Just be happy your taxes are well paid up, citizen.
Posted on 3/26/15 at 2:17 pm to TIGRLEE
Withholding is not the same as "getting taxed".
Posted on 3/26/15 at 2:35 pm to TIGRLEE
I got hit for that much on both of my bonuses this year. Oh well...
Posted on 3/26/15 at 3:54 pm to TheWiz
Can we get an add on the sticky titled
"Calm the frick down, you aren't being taxed as high as you think on your bonus"
and link it to any one of these threads?
"Calm the frick down, you aren't being taxed as high as you think on your bonus"
and link it to any one of these threads?
Posted on 3/26/15 at 8:02 pm to TIGRLEE
I bump my deductions way up that payroll period. Then I bring it back down to normal the next pay period.
Helps some.
Helps some.
Posted on 3/27/15 at 8:55 am to tiger91
Because they withhold tax on it as if that amount is your every 2 weeks salary.
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