I was just given a bonus of one-month's pay, and I noticed that they only withheld 7.65% as opposed to the normal 20+% that is withheld from my regular paychecks. What will this mean to me when tax season comes around?
2006-12-20 06:41:21 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
the bonus is considered wages, and is taxable. your employer only withheld the social security/medicare portion. i recommend that you look at one of your regular paychecks and see how much tax is normally withheld for federal and state. calculate the amount for a whole months pay. put this money aside or in the bank because it will be figured in with your tax return. it doesnt mean you will necessarily owe money, just that any refund you may receive will be reduced.
2006-12-20 22:52:15 · answer #1 · answered by tma 6 · 0⤊ 0⤋
Congratulations on your bonus! Don't spend it all, however, as you will have to include it in your taxable income. Your employer should have withheld income as well as FICA tax, and if you don't pay they could be on the hook. However, the fact that your employer made a mistake doesn't relieve you of your tax obligation, and the income will be included in your W-2.
2006-12-20 07:51:55 · answer #2 · answered by TaxGuru 4 · 0⤊ 0⤋
They wouldn't be withholding the 7.65% FICA tax if the bonus was not considered taxable income income. You can expect the extra pay to be included on your W-2. As far as the IRS is concerned it is regular income.
2006-12-20 10:22:53 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
Bonuses are fully taxable income. They should be included on your W-2.
2016-03-29 01:39:39 · answer #4 · answered by Anonymous · 0⤊ 0⤋
it means you will have to pay taxes on it as normal income, and you will probably end up owing money.
2006-12-20 06:43:03 · answer #5 · answered by Kutekymmee 6 · 3⤊ 1⤋