[jm962011]

I received a $3,000 sign on bonus. They took taxes out of it. Is that right? I guess I am just questioning it because I’ve received a sign on bonus in the past that didn’t have the taxes taken out. For example, I received a $3,000 sign on bonus at my last job and I literally got a check for $3,000.

Note, I am not saying it isn’t taxable, I just thought I would receive $3,000 right now. And then it would be recognized for taxes on my 2016 W2. So then my refund would be less (or I’d owe…). I also realize that bonuses you receive throughout the year at taxed at a higher rate than your every day wages.

[NotAnother74]

Yes it is right. I mean the employer could have grossed up the amount to where you'd receive 3k after tax. However, in big 4 and in my current job there were about 30% taken out in taxes. The employer still gets to say we paid you 3k even though you won't likely see some of it after tax.

F AR - 76
B EC - 82
A UD - 77 (lost credit)/Retake 2/25
R EG - 80

[LongShot]

Yes, that's right. My employer gave me $5k when I started and a huge chunk was taken out. Just got my biggest refund ever that year. It sucks, but it is what it is.

FAR - 75
AUD - 72; 87
REG - 64; 74; 84
BEC - 88

Done!!

[Missy]

Yes almost all employers take taxes out of bonus checks. You can tell them to take more or less out beforehand, but FICA will always come out either way. Also just fyi, if you participate in a 401(K) and are expecting a bonus the % you've got allocated will come out of a bonus unless you request payroll handle it differently. This is where folks run into trouble losing hundreds of employer matching funds, because they hit the max that they're allowed to contribute for the year if its a particularly good bonus.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

talk to payroll dept about changing your w-4. write in a really high number or put exempt. be prepared to pay IRS underpayment penalties if you dont cover prior year's tax liability come filing season

[Pandarama]

What if the first employer was trying to consider it as a reimbursement and that's why the taxes weren't taken out? lol Kind of like an employer reimbursing people for their tax prep software fees.

BEC - 80
AUD - 64, 75 - credit lost, 90!!
REG - 73, 74, 83
FAR - 61, 72, 85

Feels good finishing on my best note. Time to watch the mailbox.

[Jdn9201]

Yes, that is right. I get a bonus where I work and the tax rate withheld is always higher. I adjust my W2 withholding to make up for it for the rest of the year. I hate tax refunds because I see it as loaning the government my money at no interest.

BEC - 88 8/29/15
REG - 82 11/14/15
AUD - 83 1/8/16
FAR - 80 2/29/16

[Author]

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