I am curious what kind of tax return I will get on all the overtime I will have worked this year. I file single and claim 0 and usually get a decent return, but this year is different in that I have a salary then on top of that I am paid overtime which I am charged roughly 40% to taxes.
Also, why tax overtime pay more than salaried pay?
2007-06-21 08:10:26 · 2 answers · asked by ehad46 2 in Business & Finance ➔ Taxes ➔ United States
The government taxes overtime pay at the same rate as regular pay. If you have a lot of overtime on a check, the withholding is high because the calculation of withholding for each check is done as if you made that same amount every pay period all year.
When you file your tax return, you'll show your total income, figure the tax on it, then compare that to the total withheld. If too much was withheld, it will be refunded to you.
2007-06-21 10:32:16 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
Its not that overtime (OT) is specifically taxed at a higher rate, but what occurs, especially with larger amounts of OT generally can throw you into a higher tax bracket than you regularly see your pay taxed. Therefore, more taxes come out due to the higher bracket. Since these increased amounts are being removed, you should see a semi proportional amount of pay removed ensuring (one hopes) that you will owe no additional tax, and you may see a small to medium increase in what your return is (if your regularly receive one).
2007-06-21 15:20:12 · answer #2 · answered by lyricshade2003 3 · 1⤊ 0⤋