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I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

The new job pays me 100,000 annually, and I am head of household, with a stay at home husband and 2 children. 

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6 Replies

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

Doe your employer even offer you a choice?  I see you are asking from TT Home and Business. Are you also self-employed?

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

Also, you cannot file HOH if your husband lives with you.  If you have done so, you must file amended returns.

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

Head of Household is for unmarried persons (or considered unmarried if not living together any time during last 6 months of the year).    You should be filing Married Jointly, even if only one spouse has income.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
bwa
Alumni
Alumni

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

There is no difference in your total tax in reporting it one way or the other.  There may be a difference in the amount withheld, but that will have an opposite effect on any balance due or refund when you file your return.  In short, you can pay the IRS now, or pay them later.

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

Also consider your state taxes, especially if your state has graduated tax rates and/or deductions/credits that go away at a certain income level.
dmertz
Level 15

I am getting a retention bonus of $15,000. What is the best way to ask for this bonus, as part of my paycheck, or as an individual one time bonus check?

When included with your regular pay, your employer will withhold at the rate that applies based on the gross amount of your pay for the pay period and your filing status and number of withholding exemptions that you told your employer on Form W-4.  Paid separately, your employer must withhold 25% for federal taxes.  (I'm not sure what state withholding is required when paid separately.)

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