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Deductions & credits
$2,000 in additional withholding on $4,400 of additional income does seem high if that is all federal income tax withholding. Excessive withholding can sometimes happen when adding additional/imputed income because the withholding is calculated based on if you were earning that income regularly.
If that is all federal income tax withholding, when you file your tax return you can recoup some of the extra withholding as a refund (assuming you don't have other income that you owe tax on). Since the additional income was a one-time event, your tax rate on your actual tax return may not be as high as the tax rate used for your withholding.
‎February 1, 2025
6:19 AM