raeoflyte
Senior Associate
Joined: Feb 3, 2011 15:43:53 GMT -5
Posts: 14,713
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Post by raeoflyte on Jul 26, 2012 9:01:36 GMT -5
When we switched payroll companies earlier this year, they started paying our bonus' on a separate check. I hadn't paid much attention to it, but that monthly bonus boils down to dh and I's spending money for the month and we've been pinched lately. So I pulled out the stubs and realized that they're taxing my bonus at 25%, and my regular pay is about 12%.
I totally understand why they do it this way, but its a bit of pain for me since my bonus isn't that much money considering its paid out every month. If it was a once or twice a year lump sum the higher tax rate would make more sense.
So anyway, that's my silly vent for the day. Another reminder of my first world problems that I'm grateful to have.
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Sam_2.0
Senior Associate
Joined: Dec 19, 2010 15:42:45 GMT -5
Posts: 12,350
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Post by Sam_2.0 on Jul 26, 2012 9:16:13 GMT -5
rae - if you run your numbers through the withholdings calculator, can you make some adjustments to get more $$ now? Your perspective is nice  |
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raeoflyte
Senior Associate
Joined: Feb 3, 2011 15:43:53 GMT -5
Posts: 14,713
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Post by raeoflyte on Jul 26, 2012 9:32:54 GMT -5
I probably can, but I'm hesitant to. At the start of the year I ran everything so that we'd be getting back $0. We've had some tenant issues, so I won't make as much in rental income as projected so that gives me some wiggle room in taxes too. But I really don't want under withhold and then owe money, so we'll probably just stick this out.
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taz157
Senior Associate
Joined: Dec 20, 2010 20:50:06 GMT -5
Posts: 12,826
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Post by taz157 on Jul 26, 2012 10:33:51 GMT -5
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cronewitch
Junior Associate
Joined: Dec 20, 2010 21:44:20 GMT -5
Posts: 5,974
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Post by cronewitch on Jul 26, 2012 12:28:33 GMT -5
The law is that you need to withhold 25% on bonuses. Reduce other withholding if you want but leave the bonus at 25%. The idea is that bonuses aren't a certain number of times a year like paychecks so there isn't a special withholding table for them. So a bonus of a thousand a week would be 52K a year where a bonus of 1K a year would not bring up your annual pay to a higher bracket. If they used the regular tax tables my annual bonus would combined on my semi monthly paycheck would look like I made 250K a year and much more tax would be withheld. So we do separate checks and withhold only 25%.
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