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Mike92ct
Returning Member

Sign-on bonus

For the tax year 2022, my wife is about to receive a $20K sign on bonus. 

 

From bonuses in the past i recognize a large amount is taken out up front. I suspect this employer will do the same.

I read they either go off of your own tax rate.. or go at a flat rate (22-35%)..

 

My question is when I file my taxes for 2022- does my "income" categorize the bonus any different or is it all just income? In other words if they take out 30% and we pay $6500- could it off set my taxes paid ratio.. and probably set us up for a refund?

 

I'm not asking will I get a refund- but does the bonus taxes withheld all go into the same "pool" for all income and tax purposes and no matter how they withhold the bonus up front- it will all get calculated the same whether it was a bonus of 20K or just more income of 20K. 

 

Thx. 

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1 Reply

Sign-on bonus

A bonus is considered ordinary income, making things pretty simple at the outset. ... Employers using the percentage method of withholding will pay employee bonuses separately from regular salaries, and those bonuses will be subject to a flat bonus tax rate.

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