Hi,
Last year (2020), I got a supplemental income of $2000 by working on 2 holidays (Dec 24th and 25th). But that income is included in the Box 1 of my W-2 form. How can I report is separately so that I have to pay less tax on this supplemental income than my current bracket. As the supplemental income is taxed at a flat rate of 22 % which is less than my current tax bracket.
you misunderstand about supplemental income. you pay taxes on it at whatever tax brackets it falls into. it's the employer that can withhold at a flat 22% rate. report the w-2 as is.
Mike,
1)
My employer withheld taxes on the supplemental income at a higher rate than my current bracket. Does it mean that they used the what is called "The aggregate method"?
2)
In case if they had withheld the taxes at 22 % and my tax bracket was higher, then did I need to pay the rest of the taxes while filing the tax returns ?