How much tax will be taken from my bonus in NYS?

Forum|Forum|1 year ago
November 20, 2024
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VolvoGirl

Level 15

Will it be included on your W2 or will you get a separate 1099 for it? Ask your employer how much they will take out for tax withholding. Or are you asking in your tax return? It isn’t taxed separately unless it’s a 1099. It just adds in like your regular wages. A large amount may push you into a higher tax bracket.

flutetotootAuthor

Level 2

It will be on my W-2, and lets call it $30k. I guess I'm looking for the specific %s for fed, state, etc. I seem to be coming up with somewhere between 41%-46%. Harumph!

Opus 17

Level 15

@flutetotoot wrote:

It will be on my W-2, and lets call it $30k. I guess I'm looking for the specific %s for fed, state, etc. I seem to be coming up with somewhere between 41%-46%. Harumph!

Remember that if you are over-withheld, you will get it back as part of your tax refund.

The IRS has two rules for bonuses, one is a flat rate (I think 25%) and the other is to treat it as regular income using the regular method. The problem is that puts you in a higher bracket. For example, suppose your regular wages are $10,000 per month, or $120K per year. If you are married and your spouse does not work, you should normally have 12% withholding (up to 22% if your spouse does work). If the bonus is taxed using the regular method, then that one check will look like your gross income is $40K per month or $480K per year, which puts you temporarily in the 32% bracket (plus 3.9% additional medicare tax, probably).

Unfortunately, you can ask your employer to use the flat rate method but you can't make them do it that way.

NYS charges between 6% and 6.85% withholding for income under $1 million per year, so your NYS income tax won't be affected by the calculation method, at most it will be 0.85% higher than it should be. But as before, if you are over-withheld, you will get it back as a tax refund.